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Start-up veterans share their insights

BizCover

A WORD of warning to anyone planning to start a new business - you better be prepared to give it everything you've got.

Anything less than total commitment and a laser focus on what is required to get the business onto a sound footing will more than likely see the venture run aground.

The statistics for start-up success don't make pretty reading. Various sources point to one-fifth or more businesses failing in their first year and 50 per cent gone after four years.

But although the risks are high and the effort required to nurture a start-up into good health is all-consuming, the rewards are worth it.

All start-ups, whether in cities or regional areas, face many of the same challenges.

These include identifying a market, raising capital, attracting and retaining skilled staff, and staying motivated in the development stage.

While the challenges may be the same in theory, start-ups in regional centres often find those stumbling blocks are amplified because of their locations.

Cities are attractive places to work for young graduates and skilled trades people - and not just Australia's cities. Other countries are also on the hunt for smart workers and welcome talent from abroad.

Starting a business is scary. But, the rewards are well worth the risk.
Starting a business is scary. But, the rewards are well worth the risk. Contributed

Capital likes congregating in cities too, particularly since banks started closing country branches and centralising their operations. Few budding entrepreneurs in a regional centre have a relationship with a bank manager anymore, because there aren't any.

In a nation as vast as Australia, access to world-class internet and communications technology is an issue, although the rollout of the National Broadband Network is rectifying some of that deficit.

And of course there's access to customers to consider. Australia's population for the most part resides in urban hubs, so a regional start-up has to consider how it will get its product or service to where the demand for it is most likely to be.

 

People who start a new business need to know it will be all-consuming.

DAVID HEWITT, FOUNDER CLIPCHAMP

 

On the bright side, being a start-up in a regional centre does have its advantages.

High-speed internet, enhanced phone coverage, video-conferencing advancements and virtual reality tools are making the distance from anywhere irrelevant, as has the rise of e-commerce and e-retail.

This allows regional start-ups to use their big weapon - lifestyle choice - to attract talented workers.

All of those potential restraints on the success of a regional start-up can be overcome … if you get the fundamentals right.

David Hewitt is a founder of Clipchamp, a Queensland-based start-up that has developed a video-editing platform called Create that makes it easy for everyone to make exciting and impactful videos.

While Clipchamp is now making its mark both in Australia and internationally, the road hasn't been easy.

Regional businesses looking to recruit staff should highlight their best asset - lifestyle.
Regional businesses looking to recruit staff should highlight their best asset - lifestyle. Contributed

"People who start a new business need to know it will be all-consuming," said Mr Hewitt.

"You have to be prepared to invest a large part of your waking hours to getting your business off the ground.

"Typically, passion about your idea will make this easier. If you cannot make this sort of commitment, then starting your own business might not be the best idea."

Mr Hewitt said the biggest mistake people make when launching a start-up is building a product or service without keeping the customer in mind.

"Customer-centricity is the most important ingredient to any new business - too many times you see people build a business on what they think is important, instead of testing the market and finding out what is important to their customers," he said.

This is a point echoed by Michael Gottlieb, the co-founder and CEO of BizCover, a company that specialises in providing choice and easy access to insurance for small business.

BizCover CEO Michael Gottlieb.
BizCover CEO Michael Gottlieb. Contributed

Mr Gottlieb is a veteran of several start-ups, and he agrees that focusing on what your customer wants is crucial to success.

"You have to be a customer fanatic," he said.

"It is very simple to give good customer service. Return a phone call, acknowledge an email. Don't make people wait. Meet people's expectations.

"I find it interesting how few businesses are able to do that.

"There's a saying, 'Under-promise and over-deliver'. I don't agree with that. You should promise, then deliver. Say what you are going to do and then do it."

Welcome to our Business Class series.
Welcome to our Business Class series. News Corp

Another challenge facing start-ups is having insufficient time and resources to do what needs to get done.

"As a small business owner you are responsible for everything and often have very little if any support or finances to outsource," said Mr Gottlieb.

"If you do make it through the initial couple of years, businesses often face growing pains.

"Start-ups are about hustling, making things work, saying yes. The service to the customer is more important than the back-end systems that allow you to scale a business.

"However, as you grow you get to a position where you have a significant number of clients, and possibly staff with very few internal systems and processes.

"This can create a chaotic environment and add significant risk to a business. It is important to ensure your systems and processes are only slightly behind your growth curve."

For more start-up advice, head HERE