Starting a business

[MyAusJourneyIB]

Hi everybody, I have tried to search the forum for a similar topic but no luck.

My husband wants to know what it is like to open your own business in Aus and if anyone has been more successful in Aus than they where here in SA. Granted different businesses will have different successes but just in general how has it been to start up in Aus. Your feedback would be greatly appreciated.

[Renny]

Don't have any words of wisdom for you but would like to get some feedback on this as well. I am also planning on starting my own business when there...a small start up!

I subscribe to this mailing list and get very valuable information regarding the Aussie start up market. Check out this site and subscribe to their newsletter!

www.startupsmart.com.au

[chzaau]

I think you might have to give a bit more info to get an answer. What type of business or what area are you going to play in?

[AndreaL]

Over the years there have been a few people start their own business.

I think it is generally tougher, because the market and way of doing business here is tougher, and with a high minimum wage, running costs can be high.

I can recall South Africans that ran a restaurant, but I think was difficult and I may be wrong here, but it might be Mrs Mupersan and hubby that run business, and there may be another couple who run a parts business either in Melbourne or Canberra, hopefully they will see this post and give some insight.

[Guest May]

Hi LL,

I see that you are from my neck of the woods, I would suggest you get here and then decide because I had a friend last night throw some ideas at me but we already gone through all of those on our own. As she has yet to arrive she doesnt know the Aussie market

I know there is Spur out here, there is Honey Jewellery out as well. Some ppl have bought over a pump business, the locals didnt want to do business with Saffers but because there was no competition they had to. That was a family in Perth and then a family in Brisbane did generators and pumps, did very well with floods.

Also you will see Perth WA is different to East Coast in their needs. You really would be very brave to go in blind and get here and start up without scouting the market first.

We have also had friends buy Subway and coffee shops/ not sure how the coffee shop keeps afloat but the Subway is opposite BHP Billiton in Perth CBD if you can pay the franchise fee. The concept of a Subway marvels because as a mum I just gooi all leftovers on to stale bread or french bread with cheese and here someone has made it into a franchise. Sorry I just think there are too many restrictions. I was meant to be the distributor in East Coast for Honey but they were so pedantic about importing from China to SA to Aus without evens knowing the demographics of the country.

So it depends if its food or service or more specialised. And if you need to hire people to work for you, that overhead along with rental.

These are just observations from our own experience. If anyone out there is keen on a business I am in the market for a small start up. Corporate world sucks with people with agendas.

[joweni]

My husband bought a franchise-hydraulic hoses and fittings and we have never looked back. Even when he had to take a three month break for open heart surgery (and we were thinking that we would have to sell-thank goodness we didn't!!!) the business just kept going and when he got back into the swing of things it was as if he had never been away. The franchise concept can be really good as a lot of the legalities are already sorted out but I know buying in can be very expensive. Another thing in our favour we don't employ anybody-it is a one man set-up. It has been the a good career move for my husband as he was already over 50 when we arrived in Oz and he had been a farmer all his life.

[Guest May]

Sigh I wish we could find something like that. What an awesome journey.

[MyAusJourneyIB]

Thanks for all replies, I think we get the idea that we will need to do our homework. I am so grateful for this forum!!!

[ottg]

If I read the question correctly then you want a new start-up, meaning no existing client base and no proven business model. If you purchase a franchise or a successful existing business then usually you execute an existing proven business model. That is what you pay for.

There are ample information on starting a business however everyone leads with the though to write a Business Plan.

More than 60% of start-ups fail within three years: http://www.innovation.gov.au/smallbusiness/keyfacts/Documents/AustralianSmallBusinessKeyStatisticsAndAnalysis.pdf

I believe that:
Many start-up businesses fail due to the lack of sales - not structure or lack of knowledge or skills.
Most start-ups develop a Business Plan which is fundamental flawed; as start-ups should first search for a workable and sustainable business model in a sustainable market.
Searching for a workable business model means finding a workable value proposition and a tight product/service market fit by experimentation and learning.
How? Through customer discovery, development and growth. It should focus on how to get, keep and grow customers.
Start-ups measure Profit & Loss and Balance sheet figures from day one (before there are sales) while they should focus on conversion rates, customer acquisition cost, customer value and customer lifetime value etc

Hope it helps?

Edited February 7, 2014 by ottg

[rozellem]

I would suggest you initially gain some experience by working for someone else, before going at it alone. The market is very different here, so if you dont get it right from the start, the staff wages will kill you.

I run a small business from home, but dont ever want to pay staff or hire a shop. Good luck.

[pastapete]

Hi Guys. I own a Spur and Panarottis in Sydney.

Let me state the good first. I don't work hard and I live well. However both stores require about $ 1 mil each unless you can get a major contribution from the land lord.

Having a business in Aus is not easy. There are a maze of laws and by laws that you need to comply with. I spend most of my time working with labour laws (105 employees) O H&S and of course Food safety. Your staff can literally make any mistake and the responsibility will fall on your shoulders. The previous labor govt made the business owner responsible for everything. If one waitress messes the floor and another slips, its my problem. Workmans comp will pay her and push my fees up. Trying to keep this short, but happy to do a one on one with anyone. Why did I buy the Pannos and Spur? I was given excellent advice when i got here to settle my family first and then worry about a business. I was also advised to be a tourist for one year, enjoy my new home before i buy anything( if you can afford it do it). You need to find your bearings and get your head thinking in dollars before you commit your capital. if you live frugally for a year you could get away with less than 50 k in expenses, but if you jump into a business you could lose everything. I waited 6 months and then i started looking. Saw some fabulous businesses with seriously hidden flaws. Had a good accountant who exposed the greatest sport in Aus. Hiding turn over, paying cash wages under the table and stealing GST. He eventually advised me to start my own business and I made contact with Spur Australia. There are many other good franchises as well but i was comfortable with my SA connection. Beware of small businesses that need you to be there. you are only buying a job and will need to work 7 days to make a living. Look for a bigger business that can afford managers that you can choose your hrs. If you can't do this rather get a job working 40 hrs a week and enjoy your time off. Salaries in Ozz are very livable if you plan your lifestyle around your income. Forget the big SA homes and fancy overpriced suburbs. Don't be afraid to live like 95 %of the population. Too many Saffers or saussies have frozen memory of S.Africa and try and live the same luxury lives they had there. Chill and enjoy this beautiful country. One more thing. throw away that Springbok jersey and buy a Wallaby one. I promise you, unless you become an aussie 100% you will never settle and will always be torn with your loyalties. We are all immigrants so keep your culture, teach your kids your language and culture and be an aussie. Bless you all who read this and forgive me if I have offended you.

[SurferMan]

Pastapete,

Exactly! I bought an Aussie jersey (Wallaby) and when I wear it the guys ask, "What are you doing?" With my usual slick mouth, my reply is "I make this look good baby!" The Aussies see the humour and laugh with me, the Saffers, some of them anyways, shake their heads. They cant get that I like all 3 countries rugby. (NZ, AU and SA)

My upcoming business model is simple, flog bodies at clients. So in my parlance, a body shop. I know my industry well, and I can get good resources, so its a viable model for me.

[Bronwyn&Co]

Yes Pastapete, I agree with everything you said except for the bit about the Springbok jersey.

Especially beware the business/franchise advertised as a 'husband & wife opportunuity'.

Translate this as "You will each work a 50 hour week for a total income of $60k p.a and you won't be able to afford a real bookkeeper or any other staff".

[Renny]

https://ablis.business.gov.au/Pages/home.aspx

Check out this link, this is really great help. You need to fill in a couple of yes and no questions and it compiles a list of rules and regulations that you need to comply with in your industry and state to start the business you want. It even guides you to where you need to look for trade marks and where to register an ABN

[JK in Brissie]

I started a one man engineering consultancy 6 years ago and have never looked back. It was dead easy from a set up and operating point of view (and I had never done this before) but of course getting a client base is the harder aspect. I was warned: "You can't afford to employ an Australian nor can you afford to pay rent" so I stayed one man work from home - perfect (no traffic too).

A small business accountant will guide you with the initial set and do your tax stuff.

[Bob]

My son finished his apprenticeship as a motor mechanic at a local dealership (Mitsubishi and Hyundai)

He went from a 4th year apprentice wage of A$14.50 an hour to a fully qualified tradesman's motor mechanic wage of A$16.70 an hour . . . . . a $2.20 increase.

That was in the October.

He intended to get married later on and said to me that he couldn't live off $16.70 an hour (x 38 hours a week = $634 a week gross, or $33 000 a year, before tax.

He resigned after Christmas, looked around for a workshop and found one with two vehicle hoists behind a service station. The workshop was in a country town in the Adelaide hills.

Three years later, he has an equivalent income of around A$100 000 a year, has an apprentice for four years and is thinking of buying another business in the Adelaide hills region, possibly selling tyres or a service station selling fuel and oils.

In order to minimise his tax on that sort of income, he has set up an "investment trust" and nominates just about any income figure he chooses and pays the income tax on that set amount. He can shift income into paying for things which are tax deductible, such as buying more tools, machinery. A person outside in the workforce would need an income of around $100 000 a year to equal what my son is taking home nowadays.

If the local community see you as an honest member, giving good service without cheating them ("Yes, madam, you need a new flux capacitor in your engine"), then they will keep coming back time and again.

He trades on his reputation.

Edited February 22, 2014 by Bob

[MrsMupersan]

We closed our successful audio visual (AV) business in Cape Town to move to Australia on a 457 work visa. It was a bit of a shock to the system to go back to working for someone else again after being our own boss. But it was a means to an end for us. We also figured that it would give us four years to learn the industry in Australia and also learn how business is done, what clients are like, what they expect, etc.

Opening your own business is scary enough in South Africa - a lot of people need a push to do it. We were both retrenched and didn't even consider alternate employment - it was the push we'd been needing. So after 5 and a half years in Aus, that's what happened to us. We'd been in Canberra for three years and were dreaming of moving back to the ocean. Both of us looking for work in Sydney, Coffs Harbour and on the GC. And then Mr Mupersan was retrenched. Best thing that could EVER have happened! We waited for our citizenship ceremony which was a special one - on Australian Citizenship Day conducted by Quenton Bryce. The rationale behind this being that we then qualified for the New Start allowance with Centrelink if things got hairy. We packed up a little Thrifty truck and moved to Sawtell - a little seaside village just south of Coffs Harbour. We camped in a tent until the rental apartment we found was available - about a month. With all his fibre experience, Mr Mupes was snapped up for work on the NBN as a contractor. So we found an accountant who advised us to form a Pty Ltd so that we could incorporate the NBN work with growing the audio visual stuff on the side. Finding a great accountant was really key - she's tech-savvy and immediately "got" us and our business. How the NBN internal installation could tie in with audio visual - everyone else we spoke to needed an explanation. She's also a firm believer in the KISS principal, so isn't trying to steer us into forced growth before we're ready.

One of the main issues I have though with opening a business here in Aus is the cost of staffing. We have both made a conscious decision that we won't be hiring anyone. If we need extra hands on board for a project, we will use a labour hire company and build the cost into the quote.

We also have plans to start a second business which I will actively run. So essentially, the first business is finding it's feet & will then fund the second. Once both are up and running, we'll be smiling. We'll be working the hours that suit us too.

A couple of things we've learned...

- Aussies are bloody tight and what everything at mates rates or cheaper. Make sure to compensate for this negotiation in your initial quotes so that the client feels they're getting a good deal. It's almost like a given amongst tradies here. And I get it now - if you don't have room to 'discount' on your quote, you'll lose business to the next guy who will. It's almost like going to the markets in India where you are expected to haggle!

- Depending on the type of business, be really careful about jumping into a franchise agreement. I have a mate who bought into a garden service franchise on the GC. They kicked themselves afterwards because they said there was absolutely nothing that they couldn't have done and afforded to do on their own to set it all up. Their rates were set and they were locked into an agreement. They eventually sold up and moved to north Qld where they started up for themselves. They charge way more than the franchise and are still turning business away. If you're going to look at a franchise, do your homework and make sure that there is value in it for you. And that it's suited to the type of business. A franchise isn't just a license to print money. A franchise is just another business model - there are companies here that will take ANY business and turn it into a franchise. Yip, any business. There are thousands out there. One of the really good ones I believe is Zaraffas (coffee shops) - very much a family oriented, hands on outfit. I've only ever heard great things about them.

[JenniferRobinson]

Hi, I am a small business accountant (Chartered Accountant) and can offer advice in how to get you started, what structure to use, etc. etc. (you can mail me directly) We purchased a RAMS Home Loans franchise when we first arrived and now I have started an accounting business, however it hasn't all been easy. The franchise is a good model in the sense that so many things are done for you that your don't have to worry about, keeping you updated with changing legislation is possibly the biggest value add as Aus has many, many rules and regulations. If you can afford to the best would be to travel before you settle and try and find employment in the line of work you intend starting (as bizarre as it sounds even if you feel you are volunteering your time the experience you gain will be worth it in the end). The main things you need are sales and customers, all the other set-up can be done with assistance but the clientele is obviously what is going to make the business a success and believe it or not that accent can be off putting to many Aussies. So try and familiarise yourself first at someone else's expense and when you're confident you believe you can do a better job and add more value and understand what the market wants - go on your own as the flexibility of one's own business is fantastic. Good-luck!