The Small Business Survival SeriesEpisode 1 – Preparation
Trent shares his insights on how aspiring entrepreneurs like you can get your business off the ground, lay the groundwork for growth, and successfully thrive to beat the odds.
Hello and thanks for joining us for our first podcast in the Alltel Australia Small Business Series. I’m Melanie Slade and I’m joined by Alltel’s General Manager, Trent Brinsley, who’s designed this series to help businesses not only survive but thrive. So Trent, just start by telling us why you’re doing this.
It’s just to help people getting into business, to know what steps they need to take, and understand what road they’ve got ahead of them.
There are a lot of businesses out there that are poorly executed. They seem to be the ones that fail. The good businesses are well-executed, are the ones that thrive and survive.
Some startling figures out there about just how many businesses survive, particularly in their first year. What’s caught your eye?
That is the case. According to ASIC, 44% of businesses suffered from poor strategic management, 40 % had inadequate cash flow or high cash use, and the rest went in because of trading losses. So it’s certainly a worry when it comes to starting small businesses. Certainly the cases being small businesses are more likely to cease trading over time than larger firms. 56% of solo businesses are likely to fail with no employees 76% businesses employing between 5 and 19 employees are likely to survive past 3 years…Read more >>
How long have you been in business?
We’ve been in business for 10 years now. I can tell you certainly that the first 12 months is the hardest.
Over that time, what have you learned and why do you think so many small businesses fail?
A lot of small businesses from what I’ve seen, it’s all around cash flow and their finances. You really need to do your sums, you need to understand how much money you need to earn to create an income. You need to look at your profit margins, you need to look at your turnover. I think these are things that people overlook. So looking over your cash flow is number one.
So if there are people out there who are in a 9-to-5 job, potentially disliking their current position, and I have a business idea—what are some of the things that they need to put in place before they take the plunge?
If executed right, any business idea is a good idea. I certainly think they need to have a checklist and go through the things that they are likely to come across in the next 12 months.
Certainly, number one is – How much did you earn in your previous role and how much do you want to earn in your business? How many hours will you work?
I think people underestimate. It’s not a 9-to-5 job. When you have your own business, you don’t turn off. You don’t have that downtime. You’re always thinking, so it certainly does cut into your personal and family life.
To give you an example, if you wanted to go in with a $100,000 AUD, you really need to be looking in turning over $150,000 AUD. By the time you pay taxes, your supplier invoices, your electricity, your water, and your gas bills—it’s cut into a large part of your turnover already.
If you’re on the verge of going into business, what are the top three things that you need to do?
Understand your profit margins, understand how many products you need to sell by the day, by the hour. Know what your time is worth, know what your hourly rate needs to be to make an income.
And one of my favorite sayings is, ‘Do what you do best, pay someone else to do the rest’. So don’t be your own bookkeeper if that’s not what you’re good at. You should be out there selling products or services instead of getting out invoices to customers.
You and I are gonna sit down quite regularly to have these kind of conversations. What are we gonna talk about next?
We’ll talk about ideas about marketing. How to use free channels to get your product out there. Smart ways to grow and clever ways to grow. It’s all about working smarter, not harder. And hopefully, teach businesses some tips that—one or two may sink in, the rest of it they might be doing already.
In this day and age, there are some free, very powerful tools to help small businesses get that start that they really need to be successful.
And we would love for this to be very interactive. We’d love to hear from you. So you can send us your questions and comments.
Join the conversation on the Alltel Australia Facebook page or send us your comments on Twitter. Or you can visit the website at alltel.com.au, 1300 ALLTEL or call 1300 255 835.
And we hope you can join us next time.
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