Six Tips for Running a Successful Business

Entrepreneurship is thriving in Australia, with over 400,000 new businesses registered each year. However, not all start-ups succeed. Running a profitable business that achieves significant growth requires planning, strategy, and financial management. If you focus on effective planning, monitor cash flow, and adapt to market conditions, you can increase your chances of success.

Here are six key tips for running a successful business.

1. Have a Strong Business Plan

Creating a business plan when launching your start-up and continuously reviewing it as your business grows will help you achieve success.
A business plan acts as a benchmark for your company’s performance and should include:

• A description of your product or service
• The gap in the market your business is filling
• Your unique selling points
• Business goals for the first year and beyond
• Market research and target customer analysis
• Competitor analysis
• Marketing and sales strategy
• Profit and cash flow forecasts
• Management team and personnel details

TaxAssist Accountants can help you create a credible business plan, which is particularly important when seeking funding. Regularly updating your business plan ensures you stay on track and adapt to changing market conditions.

2. Effective Pricing

Pricing is crucial in determining profitability and business success.
Before launching, conduct research to understand your target customers’ attitudes toward your product and how much they are willing to pay. Consider:

• Direct costs: Costs directly related to producing a product or service, such as raw materials and shipping.
• Indirect costs: Business expenses like utilities, office supplies, insurance, and marketing.
• Competitor pricing: Understanding market rates helps position your pricing effectively. If charging more than competitors, ensure your value proposition is clearly communicated.

Strategies like upselling and cross-selling can also help increase revenue from loyal customers.

3. Monitor Costs and Cash Flow

The saying "cash is king" is especially true for small businesses. Managing cash flow effectively ensures business stability and growth.

• Track expenses to identify cost-saving opportunities.
• Use online accounting software to monitor cash flow in real-time.
• Plan for seasonal fluctuations in revenue.

Without cash flow management, even profitable businesses can struggle to stay afloat.

4. Access Funding

While some businesses can be launched with minimal investment, growth often requires external finance. You may need funding for hiring employees, launching new products, purchasing equipment, or moving to new premises.
Options for business funding in Australia include:

• Government grants and incentives (e.g., R&D Tax Incentive, Export Market Development Grant)
• Bank loans and business lines of credit
• Venture capital and angel investors
• Crowdfunding platforms

Understanding your funding options and preparing a solid business plan can increase your chances of securing financial support.

5. Understand Tax and Accounting Obligations

Understanding your tax obligations is crucial for business success in Australia. Your business structure determines your tax responsibilities. For example:

• Sole traders must lodge personal tax returns, including business income.
• Companies must lodge company tax returns and pay corporate tax.
• Trusts require specific tax reporting.

Additional considerations include:

• Goods and Services Tax (GST): If your turnover exceeds $75,000, you must register for GST and lodge Business Activity Statements (BAS).
• Payroll Tax: Applicable if your wages exceed the state-based threshold.
• Superannuation Guarantee (SG) Contributions: Employers must contribute at least 11% of employee wages to superannuation (increasing to 12% by July 2025).

TaxAssist Accountant can help manage tax obligations and ensure compliance with Australian Taxation Office (ATO) regulations.

6. Embrace Management Accounts

Management accounts provide real-time financial insights and are a powerful tool for business growth.
Benefits of using management accounts include:

• Monitoring and adjusting costs
• Improving tax planning
• Enhancing cash flow management
• Securing funding with accurate financial reporting

Using management accounts allows business owners to make informed strategic decisions and stay ahead in a competitive market.

How TaxAssist Accountants Can Help

TaxAssist Accountants can assist with financial planning, tax compliance, and business growth strategies. To book a free consultation, call 1300 052 555 or complete our online enquiry form.

 

Date published 27 Feb 2025 | Last updated 27 Feb 2025

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.