7 Steps to Business Success

A guide to help you assess whether your business will be a success

Welcome to the Queensland Government’s ‘7 steps to business success’.
Starting a business can be both rewarding and challenging. However, poor planning and lack of preparation contribute to many business failures. By following the 7 steps outlined in this guide you will increase your chances of business success.

Will your business let you achieve your goals?
 Make a list of all of your goals (business, lifestyle, family, health, social, spiritual and financial). Which goals will your business help you achieve? Identify areas of potential conflict. How can you eliminate or reduce conflict between your goals? What goals are absolute priorities? What goals are you willing to compromise?

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What are the 7 steps to business success?
        Step 1 - Consider your suitability Step 2 - Consider your idea Step 3 - Consider your market Step 4 - Consider your competition Step 5 - Consider the environment Step 6 - Consider your finances Step 7 - Consider your start-up Attachments and worksheets:  Skills checklist  Customer profile chart  Market actions worksheet  Competitor profile  Financial figures worksheet  Pricing worksheet  Locations chart Useful contacts Further support and assistance

Do you have the right skills and knowledge to run a successful business?
 Review and assess your skill strengths and weaknesses. Used the attached Skills checklist as a guide. Research the skills and knowledge that other people have in the industry. Make a list of the training or development you may need. Be sure to include managerial and business training if required.

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Do you have the motivation, time and energy to operate a business?
 Ask family and friends if they support your decision to go into business. Ask their opinion. Do they believe you have the necessary personal qualities to run a business? Think about what motivates you. How will you stay motivated through difficult and busy times? Consider how much time you can realistically devote to the business. Are you in general good health? Long hours and stress can affect your energy and motivation. Do you have someone who will help you stay motivated? Are your family and friends supportive?

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Step 1 - consider your suitability
Before starting a business, you must consider your suitability. You need to question if you have the time, skills, knowledge and energy to operate a business.

suppliers or businesses interstate who are not your direct competitors. franchising or starting from scratch.business. be sure to conduct market research to determine the level of demand and its feasibility.au. What do you plan to offer? Would they purchase it? Why or why not? Start conducting some market research. Unsure of what market research is or need some assistance in conducting your research? Contact the Business Support Centre on 13 25 23 or visit www.au. Contact relevant industry associations to obtain information from experienced and helpful people in your industry. If it is a new idea. Step 2 – consider your idea Once you have considered your suitability.   Step 3 – consider the market It is important that you understand and indentify the market (your potential customers) that will purchase your products and/or services. Market research will help you assess whether there will be adequate demand for your product or service. What will their buying behaviour be? Where are the majority of these people located? Be sure to complete the ‘Customer profit chart’ attached to this guide.yellowpages.com. Learn from and motivate each other. Talk to people doing similar things to you.  Consider observing other similar businesses to determine the level of demand and observe customers to find out the average sale value per customer.gov.au) to find out if there are any businesses for sale that may interest you.qld. Contact business brokers in the Yellow Pages (www.business. For more information contact the Business Support Centre on 13 25 23.qld. such as buying a business. Visit a newsagent or library for franchise/business opportunity directories and journals. Use demographic information to find out the characteristics and size of your target market in your chosen business location. it is time start thinking about your idea. but if not.gov. Monitor the businesses for sale section within local newspapers.  What type of people will buy from you and who will you target?  Make a list of the characteristics of the people who will buy your product or service.  Have you consider a range of business options?  Start thinking about the advantages and disadvantages associated with different options.      Is there enough potential demand for you product or service offering?  Ask people working in this industry to provide an indication of the level of demand. try talking to Have you thought about how you will attract your target market?  Have you thought about your marketing strategy? . Establish networks. Those customers who are most likely to buy your product or service are referred to as your target market. Is it feasible? Will people in interested in what you are offering? What type of business will you have?   Will people be interested in what you are offering?  Seek feedback from a wide range of people. You will also need to determine how you are will attract this target market and what marketing activities will you undertake. For further information on your industry or for a list of industry associations contact the Business Support Centre on 13 25 23 or visit www. Sometimes people in similar businesses are willing to help.

Once you have done this research it is important to identify why customers will buy from you and not your competitors. price lists and any other material from your competitors.au/. global. Successful businesses know who their competitors are. What external factors may have an impact on your business?  Are you able to identify any trends or impacts that could affect your industry? These factors may have a positive or negative outlook. Complete the ‘Marketing actions worksheet’ attached to this guide. Have you examined how the impacts of climate change could affect your business? Think about other types of risks associated with operating a business. Consider purchasing from your competitors to assess their product/service. technological. What are your competitors currently offering? How are they delivering it? What can you do better?  Step 5 – consider the environment By having a good understanding of your environment.   Step 4 – consider your competition Conducting research on your competitors is very important.yellowpages. what they are doing and how their customers view them. climate change is an important environmental issue. Do you have enough time and money to devote to your marketing activities?    Consider how many people you need to reach to achieve your expected levels of sales. the industry along with internal and external factors that may have affect you business will enhance your chances of business success. Consider the cost and time needed for each promotional campaign.  What marketing tools will you use to reach your target market and draw them to your business? Will your marketing activities give your customers a reason to contact you and buy from you?    Find out what all your competitors provide and for what price.com. For example. For example. Visit www. what will be the potential impact of a natural disaster or increased energy costs on your business? What will be the possible flow-on effects? How will your business deal with      What do your competitors offer?  Collect flyers. How are they marketing themselves? Are there similarities or differences in what they are offering? Complete the ‘Competitor profile chart’ attached to this guide. Think about political. Have you researched the level of competition for the product/service you will be offering?  Assess the level of competition for your product/service in your chosen business location. How does your competitors’ staff interact with customers? Can you indentify any special customer service specialties? Compare advertisements and any street signage used by your competitors. What will give you the leading edge? What can your business offer that is better than your competitors?  Consider what features and benefits customers are looking for and what is not currently provided by your competitors. social and environmental issues. . Does the level of competition mean that you should consider a few different locations? Are there benefits to being located near your competitors? Use online resources such as Yellow Pages Online to determine the number and type of competitors in and around your potential business location.

For more information on benchmarking visit www. Go to www.business.gov.gov.gov.au or contact the Business Support Centre on 13 25 23.qld.au for further information. Use financial industry benchmarks to understand what some of your potential costs  . If you are uncertain of how to calculate these terms. rather than underestimate. understanding finances is an area where many small business owners come unstuck. demographics for your location and a range of industry specific information. For more information call the Business Support Centre on 13 25 23.these various types of risks? For more information on risk management and business continuity go to www. establishing procedures and ensuring you have adequate start up and operational funds are imperative in ensuring the success of your business.   What are the features of your location and how might this impact on your success? The Business Support Centre can provide you with regional profiles. What will your start up costs be?  Start listing and estimating your establishment costs.qld.business. You can participate in a webinar or financial workshop in your region. Contact the Business Support Centre on 13 25 23 or visit www.business.    Step 6 – consider your finances Understanding your finances.qld.qld. Remember. visit an accountant or under take financial training. may be – this will help you with you cash flow forecast.business.au for more information on market and industry research. gross profit and net profit.qld.gov. What level of profitability can you expect? If you decide you will need to approach a financial institute for additional funding – you will have to develop a business plan. Calculate key figures such as breakeven point.business.gov. Is your industry predicted to experience growth or will it decline? How will this impact your business? Contact the Business Support on 13 25 23 or visit www. This will help you estimate the level of sales you need to cover costs and make a profit. Think about how you will finance these startup costs. Can you make enough income to cover your costs and eventually make money?  Complete the ‘Financial figures worksheet’ attached to this guide. What internal factors may have an impact on your business?   What will be the strengths and weaknesses of you and your business? How will you use your strengths to your full advantage? What strategies can you put in places to address the weaknesses? Do you require more skills to effectively run your business?  What is the future outlook for your industry?  Having a good understanding of your industry will allow you to indentify potential opportunities and plan for future growth.au or call the Business Support Centre on 13 25 23 for more information.au. which will increase your understanding of you business environment. It is recommended that you over estimate.

It is also important that you speak with a solicitor.    Have you considered what legal and regulatory requirements your business may need?  Have you considered what business structure you will use (sole trader.business. You will also need to think about the potential location of your business as well as the resources you will need to start operating. Fill in the Pricing worksheet attached to this guide. partnership or company)? You may need to get professional . Have you considered the type and cost of insurance? This is very important. contract or agreement.   Do you have the necessary resources to get your business started?    What equipment will you need? Will you buy or lease the equipment? What stock do you need and how much? Where will you store your stock and how will you keep track of it? Who will be you supplier/s? They need to be reliable and have competitive prices. Talk to an insurance broker.gov. will you have the ability to earn income from other sources and repay debts?         Do you have the best location you can afford?  When you are selecting you business location you need to determine where you customers are located.qld.au. Use the Locations chart attached to this guide.advice to help you decide.business. For more information on pricing your product or service visit www.business.au. If the business is unsuccessful.au for extensive information on employing staff. What is the worst case scenario?  Estimate how long you can survive without making any money from your business. state and federal level. the prices offered by your competitors and your target market.qld.business. do you research. make sure you know your rights.gov. Contact the Business Support Centre on 13 25 23 or visit www.gov.gov. More information is available at www. Get an accountant to help you prepare cash flow forecasts and develop your recordkeeping system. Before signing a lease. Visit www.au. When you are deciding your price with will need to consider your existing costs. Choosing the right start is very important. Is your chosen location practical and affordable for you to operate your business and does it meet your my needs? It is a good idea to consider a number of potential business locations and assess the advantages and disadvantages of each.    See a solicitor before buying a business or signing any contracts. will the location suite their needs and is it convenient to them. What will you charge for your product or service?  Setting the right prices for your products or services with help you maximize profits while maintaining a good relationship with your customers. What if interest rates rise or fall? What if finance is not available to the extent you need? Develop a household budget to manage your money until the business starts earning income. You may need to employ staff to assist you with operations. The Business Support Centre can provide a full list of relevant licences and regulatory requirements on a local. Step 7 – consider your startup You need to start thinking about how you will structure your business and what licences and regulatory requirements will be applicable to you.qld.qld.

Attachment 1 – business skills list Which of these skills are important in your business and which do you have? Financial skills Profit planning and budgeting Bookkeeping Purchasing Costing and pricing Payroll Financial forecasting Credit management Cash flow management Cost analysis and control Tax planning Marketing skills Written and presentation skills Selling Customer analysis Promotion Graphic design Negotiation Competitor analysis Product development Merchandising Market research Product testing Advertising Management skills Coordination and planning Communication Delegation Interpersonal Recruitment Supervision Business skills checklist 1 Training and development Problem solving Stock control Decision making Leadership Time management .

career orientated.g.g.g. usage rate. tertiary) Cultural background (e. distance from your business.g. Asian) Applies? Yes/no My customers Where are they? Location (e. suburbs) Distance (e. low. non traditional. conveniences. size. risk. primary.g. service.g. economical. pride) Buying patterns (e. seasonal. rural. introvert) Buying behaviour (e.g. Caucasian.g. teenager. middle.g.g. labourer. technical. frequency of purchase) Lifestyle (e. young. high) Education (e.g. African. extended) Gender (male. influence) Customer profile checklist 1 . female) Occupation (e. inner city. status conscious.g. health conscious.g. secondary. medium. professional) Income level (e. middle aged. or high density housing) Customer characteristics Personality (e. lower. leader. retired) Family (e. locality preference) Residence (e. outgoing.g. family orientated.Attachment 2 – customer profile chart Who are they? Age (e. child. quality. comfort. community active) Expectations (e. suburban.

Advertisement with body building photo in local sports newspaper Predicted effectiveness 200 brochures distributed with 2 percent conversion rate equals 4 new clients. Readership of 2000 with conversion rate of 1.Attachment 3 – marketing actions worksheet Customer characteristics Example: gym. inner city locations Market segments Corporate females interested in stress management Marketing strategy Brochures distributed in mainly female workplaces with specials for Pilates classes. health conscious. males and females. Potential costs $50.00 Marketing actions worksheet 1 .00 Young males interested in body building $250.5 percent equals 30 new clients. all ages. mid-high income.

website. other businesses) How many customers do they have in a particular time period? (e.g. traffic flow. parking.g. exposure.Attachment 4 – competitor profile Answer the following questions for each of your competitors Company name What is their location? How would you rank their location and why? (e.g. access. social media)? What is their competitive advantage? Competitor profile 1 . you could observe the office or store) How many employees do they have? How effective are their employees at doing their job? What is their pricing and refund policy? What customers are they targeting? How do they advertise or market themselves? What is their online presence (e.

Observe your competitors. What do you think their daily or weekly turnover would be? Financial figures worksheet 1 . Find out the turnover for your industry. Market potential/market share. Alternatively. contact the Business Support Centre on 13 25 23 or visit www.business.gov.au for more information on benchmarking. This is the sort of turnover you should be aiming for. are you prepared to forego this additional income to be your own boss with the prospects of more substantial profit/income in future years? How to estimate sales Try approaching your relevant Industry Association or other organisation to obtain benchmarking data. how much do they spend? Observe at different times of the day and week. How many competing businesses are there? Divide the turnover by the number of businesses to work out the market share for each business.qld.Attachment 5 – financial figures worksheet Income How much income do you desire? Are you prepared to potentially earn less income in the initial stages of your business? What minimum income do you require? What financial investment will be required for your business? How much could you earn by investing this money? (A) How much could you earn by working for someone else? (B) Add the amounts in A and B. If the income is greater than what you can realistically expect from your business. How many customers do they have.

although it can be a more time. Skimming pricing: For new products where initial price is set high to attract people who most The higher the price want it and who are the lower your willing to pay (e. Discount pricing: This method is aimed at the budget end of the market where consumers are willing to forgo some quality or service for a lower price. Competitor A Competitor B Competitor C Competitor D Average Step 2 – what is your pricing strategy? Elasticity pricing: When demand for a product is sensitive to the price (e. Use a costing method How? Calculate all your fixed overheads. Penetration pricing: Aims for high sales through a lower price. such as luxury goods. if you are using penetration pricing you would use a lower mark-up than competitors. Add this to the cost of sales. Remember It is easy to overestimate the number of hours and days you have available to work. Step 3 – a few methods to help you determine your prices Use a simple ‘mark-up’ method How? Take the cost price and add a certain proportion to all the items. For example. demand. For products/services that would not attract an initial elite market. 2. Talk to your suppliers.g. When? Useful when you have multiple products at different price points and the costing method is too complex. technology). When? When you are delivering a service rather than a product. 3. Remember to adjust the mark-up depending on your strategy. competitors or associations to find an industry norm or standard. Low profit margin. Remember if you use this method you really need to have excellent record-keeping skills so you are aware of all of your costs. When? This is the best method to use to make sure you are maximising your profit. Use a charge per hour method How? Refer to the next table for a step by step guide. Image pricing: The perceived image of the product outweighs the actual price. 4. grocer y items).consuming and labour intensive method.Attachment 6 – pricing worksheet A Step 1 – what are your competitors charging? Product/service 1.g. Pricing worksheet A 1 .

g. $35. Calculate maximum number of hours available 2.g. 38) B Number of weeks per year (e.000 turnover) (E + F)/H Total turnover divided by total chargeable hours (e.g.31 per hour) C Public holidays and annual leave (e.000 — calculate this using your financial figures worksheet) F What profit would you like to earn per year? (e. 30 day x 8 hours = 240 hours) D Sick Leave and Misc (e. Deduct time off A Number of hours per week (e. $32. $67.000 + $35.000 = $67. 1.g.416 = $47.g.000) H Total chargeable hours (e.Attachment 7 – pricing worksheet B Step 4 – how to calculate a charge per hour for services 1. Calculate total turnover required per year E Estimated Overheads per year (e. 1. 40 days x 8 hrs = 320 hrs) 3.g.000/1. 52) AxB Number of hours per year (e. 38 x 52 = 1.416 hrs) E+F Total turnover needed per year (e.g. $32.976) (A x B) – C–D Total chargeable hours (e.g.416) 4.976 hrs – 240 hrs – 320 hrs = 1.g.g. Calculate charge per hour Pricing worksheet B 1 .g.

Attachment 8 – locations chart Location 1 What is the passing traffic like? Location 2 Location 3 Location 4 Is it near an intersection? Does it prevent access? Is there ample parking? What fittings are included and what quality are they? What is the general appearance of the building? How much space is there? Is there adequate space? Are you located near your clients? What is the cost? Locations chart 1 .

com.com.au GS1 Australia Barcodes 1300 366 033 or visit www.ausregistry.au Australian Securities & Investments Commission (ASIC) Company registration and business name searches 1300 300 630 or visit www.au Australian Taxation Office Telephone 13 28 66 or visit www.com.grantslink.au/ Australian Made/Australian Grown (Australian Made logo / stickers) Telephone 1800 350 520 or visit www.aim. 1800 026 222 or visit www.gov. with links to state/local government and non government/commercial sites.Useful contacts AusRegistry Pty Ltd Domain name registration 03 9866 3710 or visit www.australianmade.au Franchise Council of Australia Franchise information 03 9508 0888 or visit www.au GrantsLink Information on Commonwealth grants programmes.au Australian Copyright Council (ACC) Copyright 02 8815 9777 or visit www.gov.com.org.copyright.org .cpaaustralia.cciq.au Australian Institute of Management Development of management and leadership 1300 882 895 or visit www.asic.au CPA Australia Accountants 1300 137 322 or visit www.com.au Chamber of Commerce and Industry Queensland 07 3842 2244 or visit www.ato.org.gs1au.franchise.gov.

com.gov. trademarks and designs.com Workcover Queensland Workers’ Compensation Insurance 1300 362 128 or visit www.gov.au The Australian Institute for Commercialisation (AIC) New product commercialisation and development assistance 1300 364 739 or visit www.IP Australia IP Australia is the Australian Government agency responsible for granting rights in patents.ausicom.fairtrading.gov.qld.workplacerights.workcoverqld.needabroker. 1300 651 010 or visit www.ipaustralia.au Workplace Health and Safety 1300 369 915 or visit www.au/workplace/index.deir.htm .com.gov.au Office of Fair Trading 13 74 68 or visit www.au Queensland Workplace Rights Ombudsman Independent advice and information on industrial relations and work related matters 1300 737 841 or visit www.qld.qld.au National Insurance Brokers Association of Australia Need a Broker Service 02 9964 9400 or visit www.

Available business support includes workshops and seminars.Further assistance Business planning For more information about any of the following tools and services please contact us on 13 25 23. We provide a range of webinar topics to help you plan for and continually improve your business. Government Business Information Service (GOBiS) GOBiS connects business with local. $16. both of which will give your business a strong foundation. $44. payment and process on the most common licenses and business name registrations.50 (inc GST) PlanSMART Kit Whether you're starting a business or investigating new opportunities. a PlanSMART kit provides you with essential market. The personalised service allows for lodgement. Grow. Webinars Web-based seminars are an ideal way for you to improve your business skills without having to leave your desk.50 (inc GST) Think. Easy Plan The Easy Plan CD template and guide saves you time by helping you write your business plan. market and industry research and more. calculate your business’s cash flow and forecast potential profits. financial spreadsheets and a presentation template. . Plan.00 (inc GST) SmartLicence SmartLicence provides access to information on local. marketing and financial for both for business intenders and owners. $38. The interactive Think Plan Grow CD is a complete business planning and monitoring suite which includes sample business plans. state and federal government services and programs. industry and research information that is tailored to your specific business type and location. state and federal government business licensing permits and registrations. The information in a PlanSMART kit is crucial to your business planning as it gives you a clear picture of the factors currently affecting the potential success of your business. A PlanSMART kit may help you to identify unexpected opportunities or prevent costly mistakes. a detailed planning guide. financial and export assistance. Workshops and seminars We provide a series of workshops and seminars covering business planning.

qld. diagnostics. Digital channels The Business and Industry website (www.business. networking events and mentoring.Trade and export Trade and Investment Queensland (www. Our social media channels deliver updates.export. start.gov.gov. tools and resources to assist people.youtube.com/BusinessQldGov .qld.au) hosts over 200 learning guides.au) helps Queensland companies earn more export dollars through individualised and targeted services such as workshops. run and grow their business.facebook.com/businessqldgov http://www. For more information visit: https://www. seminars.com/businessqldgov http://twitter. provide links to useful information and assistance and broadcasts informative case study videos to the business community.