Table of Contents

Introduction 1


About This Book 1


Foolish Assumptions 2


Icons Used in This Book 2


Where to Go from Here 3


Part 1: First Steps 5


Chapter 1: Is Small Business for You? 7


Working for Yourself — A Dream Come True? 8


Doing what you love to do 8


Earning pots of money (here’s hoping) 8


Being your own boss 9


Staying home 10


Working for Yourself — Reality Strikes 11


Teetering on the edge 12


Working night and day for little pay 12


Weathering feast and famine 13


Getting the Timing Right 13


Timing it right for your idea 14


Timing it right for you 15


Timing it right for the economy 16


Staying Safe or Inventing the Wheel? 17


Playing it safe 17


Finding your own niche 18


Going out on a limb 18


Getting the Government to Help You 19


Chapter 2: Buying a Business 23


Weighing Up the Good and the Bad 24


Buying an existing business — the upside 24


Buying an existing business — the downside 25


Asking the Right Questions 26


Finding out who owns the intellectual property 27


Analysing sales trends, profit and break-even 27


Clarifying what the purchase price includes 28


Building a Relationship with the Seller 30


Dotting Your I’s, Crossing Your T’s 31


Part 2: Jump In, Get Wet 35


Chapter 3: Planning for Success 37


Getting Started with Your Plan 38


Hunting for online resources 39


Using specialised planning software 40


Assessing the Environment 40


Analysing outside influences 41


Testing the waters (don’t get too wet) 43


Defining your customers 44


Checking out the competition 44


Declaring Your Battle Plan 46


Looking at your strengths and weaknesses 46


Choosing a strategy 48


Expressing your competitive advantage 49


Building your online business strategy 51


Developing your marketing plan 52


Creating a team 53


Charting a True Course 53


Setting off on your mission 53


Saying what you’re about 54


Matching goals to your mission 55


Presenting Financials 56


Balancing dreams against reality 56


Building on history to create a picture of the future 57


Staying real with benchmarks 58


Chapter 4: Getting the Legals Right 61


Picking a Business Structure 62


Independent and single 63


Tea for two 64


We’ve got company 65


Matching the Name to the Game 65


Using your own name 67


Making sure you’re not on someone else’s patch 67


Registering your business name (Australia only) 70


Avoiding trouble (Australia only) 71


Protecting Your Ideas and Your Name 71


Registering with the Powers That Be 73


Getting that baby’s number 73


Signing up for taxes (unavoidable, I’m afraid) 74


Checking out what else you need 75


Chapter 5: Creating Your Marketing Plan 77


Laying Down the Elements of Your Plan 78


Writing a decent introduction 79


Identifying what it is that makes you different 79


Defining Your Target Market 80


Analysing your customers 81


Researching the market 81


Analysing Your Competitors 82


Setting Sales Targets 84


Slicing goals into bite-sized chunks 84


Expressing goals in other ways 85


Creating Strategies to Support Your Targets 87


Building a brand that people want 87


Getting the products and the price right 88


Planning an advertising strategy 90


Working your networks 91


Part 3: The Nitty-Gritty 95


Chapter 6: Becoming an Employer 97


Becoming an Employer: The First Steps 98


Getting employees to fulfil their part of the deal 98


Covering employees for accidents 100


Subscribing to super (Australia only) 101


Paying KiwiSaver (New Zealand only) 104


Meeting Minimum Pay and Conditions 106


Understanding what laws apply (Australia only) 107


Creating employment agreements (New Zealand only) 108


Choosing between part-time, full-time or casual 110


Playing Safe and Playing Fair 111


Being practical, not pedantic 111


Blonde jokes are over 112


Chapter 7: Cooking the Books 115


Setting Off on the Right Track 115


Understanding how cloud accounting works 116


Addressing privacy concerns 117


Figuring out what’s important 119


Creating a Bookkeeping System 121


Keeping track of bills, receipts and invoices 122


Organising your information 124


Nitpicking over petty cash 126


Tracking How Much You Owe 127


Chapter 8: Understanding Financial Statements 129


Telling a Story with Your Profit & Loss Report 130


Understanding how it all works 130


Looking at sales 131


Counting the costs 132


Weighing up your expenses 134


Taking a Snapshot with Your Balance Sheet 134


Understanding the fine print 136


Building documentation to support each figure 137


Appreciating your net worth (someone has to, after all) 137


Why Profit Doesn’t Always Mean Cash 138


Gazing into the deep, black hole 139


Looking through rose-coloured spectacles 139


Doing the sums for sustainable growth 140


Budgeting As If You Mean It 141


Creating your first budget 142


Recognising relationships 144


Understanding the psychology of budgets 145


Developing your budget in tune with your business plan 146


Chapter 9: Calculating Margins and Ratios 149


Understanding Profit Margins 150


Differentiating between variable costs and fixed expenses 150


Understanding gross and net profit 151


Figuring gross and net profit margins 152


Looking at gross profit margins over time 153


Appreciating how margins and sales connect 154


Analysing Margins for Your Own Business 155


Calculating margins when you sell products 155


Calculating margins when you charge by the hour 156


Calculating margins if you do big projects 157


Understanding why gross profit is such a big deal 158


Calculating your net profit margin 159


Estimating Your Break-Even Point 161


Analysing how to make sales match expenses 162


Looking at things from a cash perspective 163


Factoring your personal expenses into the equation 164


Part 4: The Part of Tens 167


Chapter 10: Ten Things to Do If You Hit Hard Times 169


Work Out How Bad Things Really Are 170


Get Breathing Space 171


Innovate! 172


Slash Those Expenses 172


Pull Back Personal Spending 173


Get Rid of Dead Weight 174


Chase Up Overdue Accounts 175


Run Special Offers 175


Re-Jig Your Margins 176


Don’t Be a Shag on a Rock 177


Index 179

About the Author

Veechi Curtis is a qualified accountant and consultant who specialises in small business finance, marketing and technology. She is the author of several business titles, including Small Business For Dummies, 5th Edition, MYOB(R) Software For Dummies, 8th Edition and Creating a Business Plan For Dummies.