Figures released this week by the Australian Bureau of Statistics illustrate what many budding entrepreneurs have long suspected – conditions aren’t all rosy for new businesses.
The last financial year saw the lowest number of new businesses established since records began, with growth dropping from 3.6% in 2009-10 to just 0.4% in 2010-11.
So, is it currently a good time to start-up, or should you keep your powder dry until conditions improve?
Below are five great reasons why now is the perfect time to start a business, along with five cautionary points as to why you should drop and think before taking the plunge. Whatever you do, good luck!
Granted, some start-ups are still finding it near-impossible to obtain funding from their banks, but on many other measures, you’ve never had it so good.
The past year has seen a flurry of start-up incubators (Startmate, PushStart and AngelCube to name just a few) and various co-working spaces ( such as The Hub in Melbourne and Fishburners in Sydney) establish themselves.
Australia is gradually building a start-up ecosystem that is collaborative, innovative and mentor-driven. Best of all, it’s being driven by entrepreneurs themselves, rather than the government.
That said, the public sector has pitched in now and then. Witness, for example, the establishment of the small business helpline and Commercialisation Australia’s vastly more attractive funding grants.
Throw in a growing number of start-up meet-ups and countless sources of online information and you shouldn’t lack a helping hand.
To glance at the mainstream media, you’d be convinced that Australia was a country containing one booming industry – mining – while a few near-monopolies – such as Coles, Woolworths and Gerry Harvey – dominate a rather stilted non-resources sector.
While elements of this are true, it only takes the faintest scratch beneath the surface to realise that Australian business success stories don’t entirely revolve around digging stuff up from the ground and flogging it to the Chinese.
A raft of innovative tech start-ups have received Silicon Valley funding in recent times with one, WeTeachMe, even pitching for $2 million just six months after the founders met.
Aussie start-ups are seen as nimble and overseas investors respect their strong work ethic. Whether it’s 99designs receiving $35 million or Grabble being acquired by Wal-Mart before their first birthday, it’s clear that innovation is alive and well in Australia. And, best of all, the world is sitting up and taking notice.
Barriers are crashing down when it comes to starting up. According to The World Bank, Australia is the second easiest place in the world to start a business, but global trends are also playing a part.
Falling technology costs are allowing budding entrepreneurs to get a website and start selling within hours. Meanwhile, increasingly flexible working practices have given impetus to countless home-based businesses, operated by stay-at-home parents or even full-time workers who decide to run start-ups on the side.
Australia’s remoteness to the rest of the world is also becoming less of an issue. Who would’ve thought, just a few years ago, that Adelaide could play host to one of the world’s most prestigious start-up incubators?
Or that a young woman with no business experience could convince a UK innovator to provide her with a system that would allow her to sell single-serve portions of wine to Aussie consumers?
And if it all goes wrong, failure doesn’t have to mean the end. While the recent closure of Nikki Durkin’s 99dresses caused much wailing and gnashing of teeth among commentators, Durkin herself is sanguine.
If you start lean (as the now ubiquitous Eric Ries book states) you have a decent chance of revamping your business if things go badly, or simply walk away, without breaking the bank.
StartupSmart’s two flagship awards from last year demonstrate that neither age nor gender are major impediments, if you have a great business idea.
Jo Burston of Job Capital and Larissa Robertson of SCO Recruitment were the stand-outs at the StartupSmart Awards, with both women overcoming seemingly huge odds to build successful, sustainable businesses.
Meanwhile, our inaugural Future Makers list highlighted Australia’s leading entrepreneurs aged under 25.
Ranging from Nathan Murphy, who overcame homelessness to launch his innovative teaching aid business, to Chanel Costabir, who flew to France to talk a dozen of the world’s leading lingerie designers into stocking her yet-to-launch retail site, age is increasingly irrelevant for investors, suppliers and customers.
Sure, you could stay in your current job, clocking up the years to retirement while wondering what could’ve been if you launched your own business.
Unfortunately, you’ll probably end up hating yourself and everyone around you. A survey of 3,500 Australian managers and employees by Leadership Management Australasia last year found that 16% of staff “hate” their jobs, while half have a “ho-hum” attitude to work.
If you are not doing what you’re passionate about, or simply despise your boss, there is another option to silently seething. Why not take the plunge and start-up?
