Road to Entrepreneurship

Options to consider and pursue Road Maps

Presented by: Lynda Chachaty Senior Consultant Lee Hecht Harrison

The Road to Entrepreneurship

Road Maps

Becoming a Consultant
Buying a Franchise
Buying a Business
Starting a Business
Becoming an Independent Contractor

The Road to Entrepreneurship

Agenda
Why Entrepreneurship?
Statistics of success and failure
Importance of the Business Plan
A focus on Consulting
Structures
Some important resources / web-sites
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The Road to Entrepreneurship

Is Entrepreneurship right for you?

Are you going into your own business for the right reasons?

Do you understand the business which you have in mind?

Do you have the overall management experience?

Do you have the right skills?

The Acid Test

Can I do it?

Can I adjust?
Am I able to work on
my own?

Do I have the passion,

the desire and the
commitment?

If yes to the 3 circles, then you have a good Chance of succeeding!

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The Road to Entrepreneurship

(2,011,770 Businesses in Australia)
After 5 years,
the success rate is
maintained at a
very high level

1.93 million employed less than

20 people small business

60% of these
were one-operator
businesses
(1.2 million)
68% were male
and
32% were female

Excluding Franchises, more than

80% of new small businesses fail
in the first 2 years, that rate progressively
decreasing
through to the 5th year.

Small Business
Statistics
as @ 2007

Majority (33.5%) of small businesses

have been in operation for 1 to 5 years.
15.5% have operated for less than one year,
19.2% from 5 to 10 years,
and 31.8% for more
than 10 years

9% were less than

30 years old, 58% between
30 and 50, and 33%
were older than 50

67% of business operators worked

35 hours plus per week,
33% less than 35 hours per week

The biggest single reason for failure is what?

The Road to Entrepreneurship

What is a business plan

Every business needs a plan
It is the blueprint for a business operations
Structured and logical
Anticipates growth and development of the business
Provides the strategies for how the business will meet their
goals

The Road to Entrepreneurship

Business plan
Helps to determine:
What to do
Why it is being done
How to do it
When to do it
Who will do it
What resources are required
Where you will be
Where are you NOW
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The Road to Entrepreneurship

Business Plan
The Operating
Plan

The Finance
Plan

The Marketing
Plan

Includes issues such as:

Issues such as:

Includes:

Structure
Location
Brochures, materials,
equipment etc
Insurances
Regulatory requirements
Memberships, Industry
Associations etc

How am I intending to
finance my business
Taxation, accounting
responsibilities
Financial projections - why
are they important
Budgeting

Range of products or
services
Market Research and
analysis
SWOT Analysis
Who, when, where and
how
Reality Check
See next slide for the
Marketing Plan
Strategy

The Road to Entrepreneurship

Marketing Plan Strategy
IDEA
VISION

DRAFT
BUSINESS
CHARTER

MARKET

MARKET

RESEARCH

ANALYSIS

REFINE
BUSINESS
CHARTER

MARKET
STRATEGY

BUSINESS
PLAN

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The Road to Entrepreneurship

Business plan
Key Elements to also consider
Internet Marketing Strategy
Exit Strategy
Contingency
Customer Service Plan
Human Resources / Management Plan

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The Road to Entrepreneurship

Research

Websites: govt, business and industry

Journals / magazines
Industry associations
Online and Phone Surveys
Online Forums and Blogs
Observational
Businesses with similar customer base
Approach competitors as a customer
Suppliers
Potential customers : focus groups / concept testing
Specialist advisors
Landlords / real estate agents (where premises required)
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The Road to Entrepreneurship

Small Business Structures
What is the best structure for my business?
There are 4 main types of business structure commonly used by
small business in Australia

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The Road to Entrepreneurship

Sole Trader
Advantages:
Easy and cost effective to establish
All profits to the owner
Owner has full control
Can offset losses against other income
Disadvantages:
Reliant on owners funds and capital
Owner is personally liable for debts
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The Road to Entrepreneurship

Partnership
Advantages:
Tax liability can be split
Easy and cost effective to set up
Shared responsibility
Disadvantages:
Unlimited liability of each partner
Decision making can become deadlocked
Personality problems may arise
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The Road to Entrepreneurship

Pty Ltd Company
Advantages:
separate legal entity
shareholders liability is limited
can be formed by one or more persons
not terminated by death or bankruptcy of a shareholder
shareholders can include minors
Disadvantages:
higher establishment costs and on-going costs
company structure is more complicated
liable for company tax
dissolution can be complex/costly
Directors have substantial obligations under Corporations
Law

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The Road to Entrepreneurship

Business Name Registration
Is required if trading under a name other than own / registered
company name
Application from Office of Fair Trading
Check availability in all states
Is domain name available?

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The Road to Entrepreneurship

Taxation Requirements
TFN: tax file number
ABN: Australian business number
GST registration
PAYG withholding
BAS lodgement quarterly / monthly

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The Road to Entrepreneurship

Licences, Regulations and Permits
Does your business require a licence?
What regulations do you need to abide by?
Do you need a permit?

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The Road to Entrepreneurship

Other Permits

From home local council

On roadsides (stall holders) local council
Public walkways (eg. Caf) local council
Outdoor signage local council
Child care local council / state govt authority
Trade waste waste authority / EPA
Special machinery: EPA / workplace authority
Dangerous goods handling : EPA / workplace authority
Gaming business (incl. competitions) State gaming authority
Playing recorded music (radio/cds) Copyright laws
Factory premises local workplace authority
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The Road to Entrepreneurship

Insurance Requirements
Workers compensation

Home based (house / contents)

Public liability

Assets / revenue protection

Personal accident / illness

Professional indemnity

Product liability

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The Road to Entrepreneurship

Tips for Success
Know the business

Know the product/service mix

Differentiation

Competitive Advantage

Personal discipline
Time
Money
People
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The Road to Entrepreneurship

Summary

Personal readiness

Legal requirements and business structure

Planningplanning.planning

Communication.communication.communication

Measures of success

Work ON the business rather than IN the business

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The Road to
Entrepreneurship
STARTING A CONSULTING BUSINESS

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Starting A Consulting Business

Module 1

Introduction

Module 2

Consulting Process Model

Module 3

A Consultant Profile

Module 4

Fee Structure

Module 5

Marketing Consultancy Services

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The Road to Entrepreneurship

Module 1

Introduction

The consultant has the opportunity to bring

his/her intellect to the systematic
unraveling of the clients problems and
then to apply
creativity to the formulation of a
sound solution.

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The Road to Entrepreneurship

Introduction cont

Module 1

The World of the Self-Employed - A Continuum of Skill Complexity

Pr

io n
s
s
ofe

al

Content of Job
cal
i
n
h
Tec

r ic a
e
l
C

Temporary

Sub-contractor

Contractor

Consultant
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The Road to Entrepreneurship

Module 1

Introduction cont

Why do Organizations use Consultants?

Provide Independence and unbiased judgement
Present new ideas and a fresh approach
Possess the ability to diagnose problems and evaluate solutions
Perform tasks with technical skills infrequently needed
Supplement present skills of staff and management
Implement systems and train employees
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The Road to Entrepreneurship

Module 2

Consulting Process Model

Stage 1

29

The Road to Entrepreneurship

Module 2

Consulting Process Modelcont

First contacts with Client

Preliminary problem diagnosis
Assignment Planning
Assignment proposals to client
Consulting contract

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The Road to Entrepreneurship

Module 2

Consulting Process Modelcont

Fact Finding
Fact Analysis
Detailed problem examination
Preliminary recommendations

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The Road to Entrepreneurship

Module 2

Consulting Process Modelcont

Developing solutions
Evaluating alternatives
Proposals to client
Detailed recommendations/
proposal to Client

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The Road to Entrepreneurship

Module 2

Consulting Process Modelcont

Monitoring / tracking
Adjusting with implementation
Adjusting proposals
Training

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The Road to Entrepreneurship

Module 2

Consulting Process Modelcont

Evaluation
Final report
Setting commitments
Plans for follow-up
Withdrawal

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The Road to Entrepreneurship

Module 3

A Consultant Profile

What do you need to be a consultant? We will look at

Topic
Core Competency profile
The 12 Main Characteristics of Successful Consultants
The 12 Main Characteristics Contributing to Failure
Considering the Pros and Cons to determine if consulting is a business for you:

Advantages

Disadvantages

Adjustment Factors

The 7 Main Problems Experienced by newcomers to Consulting

Developing Consulting Skills

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The Road to Entrepreneurship

Module 3

A Consultant Profilecont

Core Competency Profile

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Module 3

A Consultant Profilecont

The Twelve Main Characteristics of:

SUCCESSFUL CONSULTANTS
1.
Knowledge of the business
environment, and industry trends
2.
Self-motivation
3.
The ability to make decisions
4.
Willingness to work long hours
5.
The ability to be a good listener
6.
A high level of tolerance
7.
Objectivity
8.
Gut feel
9.
The ability to probe for information
10. The ability to talk the clients language
11. Attention to detail
12. The capacity to deliver

CONTRIBUTORS OF FAILURE
1.

Over committing time

2.
3.
4.

Failure to recognize technical skill limitations

Excessive fees
Undercharging

5.
6.
7.

Exceeding quotes
Attitude
Charging senior staff rates for junior or
inexperienced staff

8.
9.
10.
11.

Failure to allocate sufficient time to marketing

Poorly written and presented proposals
Failure to bill clients on time
Using a clients name without permission

12.

Lack of credit control

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The Road to Entrepreneurship

Module 3

A Consultant Profilecont

Consider the pros and cons to determine if consulting is a business for you:
ADVANTAGES

Offers a chance to work for yourself

Eliminates getting bogged down in

company politics, red tape, bosses and
bureaucracy

Requires minimal capital investment

(assuming that you can run it from
home)

Allows you to control your time, both in

terms of amount of work and schedule

Provides an opportunity for variety

Carries no mandatory or customary

retirement age

Offers potential for high annual income

DISADVANTAGES

Intense competition, particularly in fields
hard hit by corporate layoffs

No built-in support system

Lack of organizational authority to
implement your solutions or ensure
that your recommendations will be
carried out as intended

No set schedule or routine

Blurred line between work and leisure
time

Irregular cash flow

Sporadic work flow

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The Road to Entrepreneurship

Module 3

A Consultant Profilecont

Adjustment Factors

Time
Accountability
Risk
Security
Feedback Loop
Sociability
Level of Support
Identity
Lifestyle
Other

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The Road to Entrepreneurship

Module 3

A Consultant Profilecont

The Seven Main

Problems
Experienced by
Newcomers to
Consulting

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The Road to Entrepreneurship

Module 3

A Consultant Profilecont

Developing Consulting Skills

Start consulting now
Address the core competencies
Develop a Business Plan
Join associations
Training courses
Read
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The Road to Entrepreneurship

Module 4

Fee Structure

Two Most Common Mistakes

Failing to Calculate fee appropriate to Individual needs
Undercharging

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The Road to Entrepreneurship

Module 4

Fee Structurecont

Calculating Saleable Time

Total Available Weeks
Less: Annual Leave
Public Holidays
Sick Leave
Av ailable Weeks

52
4
2
1
45

Hours Applied to constantly

Billable t ime per week (hours)

40

Available Billable hours

45 x 40 = 1800 hours per year

1800

Productive hours
75% of 1800 hours

1350
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The Road to Entrepreneurship

Module 4

Fee Structurecont

Calculating Hourly Time

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The Road to Entrepreneurship

Module 4

Fee Structurecont

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The Road to Entrepreneurship

Module 4

Fee Structurecont

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The Road to Entrepreneurship

Module 4

Fee Structurecont

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The Road to Entrepreneurship

Module 4

Fee Structurecont

Other Costs
Secretarial Charges
Out of Pocket Expenses
Traveling Time

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The Road to Entrepreneurship

Module 5

Marketing Consultancy Services

Feast or Famine Cycle

The cause of the problem
Breaking the Cycle
Allocate/dedicate marketing hours, despite workload

Need to extend project completion times to facilitate

Weekend/late night work on current projects to

accommodate

Effective time management and careful work scheduling

No Excuses No Shortcuts!
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The Road to Entrepreneurship

Module 5

WHO

Marketing Consultancy Servicescont

WHAT

HOW

Three Major Marketing Considerations

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The Road to Entrepreneurship

Module 5

Marketing Consultancy Servicescont

Marketing Strategies Used By Participating Consultants in Shenson Study1.

Percent of Respondents Making Use of Identified Marketing Strategy.
Marketing Strategy

All Professionals

Pre-Tax Income* Greater

than $100,000

Pre-Tax Income* Less than

$55,000

Cold Calls

58.5

14.4

70.7

Direct mail brochures/sales letter to cold lists

70.6

20.8

71.3

Provision of no-charge diagnostic services to prequalified leads

42.7

19.8

58.1

Promotion to similar clients on basis of referrals, or

names obtained from clients

60.5

71.6

22.9

Lectures to civic, trade, and professional

audiences

17.8

40.1

9.6

Writing articles, books, newsletters for trade,

professional and civic audiences

18.2

37.6

8.3

*Income equals personal pre-tax Income after business expenses.

1The

Economics of the Consulting, Training, and Advisory Professionals, 20th Study: 1999, The Professional Consultant.
Howard Shenson, CMC Woodland Hills, CA, 1999.

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The Road to Entrepreneurship

Resources
Resource

Document / Template

Small Business Web Sites

>>Insert Doco<<

Business Plan for Start Up Business

Microsoft Office
Word 97 - 2003 Document

Tactical Marketing Plan

Microsoft Office
Word 97 - 2003 Document

Business Plan for an Established Business

Microsoft Office
Word 97 - 2003 Document

Web Site Creation Strategy

Microsoft Office
Word 97 - 2003 Document

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Success is not final, failure is

not fatal: it is the courage to
continue that counts.

Winston Churchill
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