Owning your own business can free you from the nine-to-five grind, help you fulfil your passion, create financial opportunities and give you more control over your life. It can also keep you awake at night. Just ask the two million or so Australians running small businesses¹.

So what are some of the traps and trials of running your own show and what can you do to replace the stress with success and a better night’s sleep?

Keeping enough money coming in to cover everything that needs to be paid out is probably the chief sleep depriver for small business owners. Many make the mistake of not having enough funds behind them to start with, putting unnecessary pressure on turnover from the outset.

The other error is not reflecting your true operating costs in what you charge for your products or services. All ventures, no matter how small or what business they are in, have costs – rent, wages, supplies, equipment, electricity, freight and travel, to name a few. Under-estimating the full cost of operating your business is one of the surest ways to strangle your cashflow. You might win work or sell lots of product based on your prices but if revenue doesn’t ultimately outstrip expenses, you won’t be in business for long.

How to remedy

• Start with sufficient funds under your belt to cover running costs while you are building your business.
• Consider a small business loan or overdraft to help get you started and manage initial cashflow. I can help point you in the right direction to find the right finance solution, so you can get on with doing what you do best – managing and growing your business.
• Create an accurate pricing model that factors in all your running costs and how much profit you need to make.
• If offering a professional service, ask for part payment up front.

You might have more flexibility with work hours when self-employed but many small business owners find themselves spending more time toiling than ever before, blurring the line between their professional and personal lives. Our 24/7 digital world doesn’t help, making it easy to check emails from the couch or take a business call while driving the kids to school. Not only are long work hours taxing on you, the business owner, they can take a dramatic toll on your family and other important relationships, compounding your stress levels.

How to remedy

• Set boundaries and be disciplined with your work hours. While it’s important to be responsive to customers and spend time on your enterprise, you are ultimately in charge of your time outside of business hours. Find a routine that works for you and your family.
• Eat well and find time to exercise to help manage your fitness and stress levels.
• Make time for the most important people in your life. Maximise your flexibility to attend school events, read to your kids at bedtime, make a point of eating breakfast or dinner as a family, set a regular date night, steal a weekend away and catch up regularly with friends.

It’s a catch 22 and major source of stress for many small business owners – the need to wear multiple hats but insufficient funds, or lack of revenue certainty, to take on extra help. Most small business operators find themselves working in and on their businesses, straddling everything from book-keeper and financial controller to human resources and marketing. Inevitably, something has to give.

There are plenty of ways to access business support for start-ups if you are prepared to be resourceful.

How to remedy

• You might be eligible for a grant to support expansion. The Department of Industry, Innovation and Science offers a wealth of online resources to support small businesses, including information on available grants, plus free business advisory services and workshops. Visit
  www.business.gov.au/assistance
• Tap into extensive skills and knowledge without the burden of full-time wages by employing experienced part-timers, such as parents who are looking to keep their professional skills up but don’t want to work full-time.
• Talk to TAFEs and universities about internships or part-time employment opportunities for promising students. New talent can require extra supervision but the right hires can also bring energy, enthusiasm and fresh thinking.
• Find a trusted mentor who understands your challenges and can help you navigate growth. Many business people are willing to lend an hour of their time on a regular basis to impart their learnings and wisdom.

Between Business Activity Statements (BAS), tax, insurance, superannuation, public liability, payroll, workers compensation and leave entitlements, small businesses face a stack of red tape, rules and forms.
Compliance is a certain trigger for midnight tossing and turning. This is one area small business owners should not try to navigate solo.

There are plenty of ways to access business support for start-ups if you are prepared to be resourceful.

How to remedy

• Get a good tax adviser who can not only help with your accounting but can make sure your business complies with the latest rules. Ask other business owners for their recommendations.
• The Australian Competition and Consumer Commission churns out regular updates for small business owners, including compliance requirements and also information on your rights. Explore the many online resources and sign up to the Commission’s newsletters at www.accc.gov.au/about-us/information-for/small-business
• Employment laws can be a mine field. The Australian Institute of Human Resources portal (www.ahri.com.au/assist) has free resources to help you understand your responsibilities as an employer and be a better boss.

Small business lending is set for a shake-up that will make terms fairer for the little guys if recommendations by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) are introduced.

The Carnell Report, released in February following an inquiry into bank lending for small-to-medium enterprises, has made 15 recommendations designed to address regulatory gaps and shortfalls in lending practices that disadvantage business borrowers.
Bank loans remain the most readily available source of funding for businesses, so are often the first port of call. They come with a repayment plan attached to an interest rate, with lenders requiring some form of collateral, which they can confiscate and sell if payments are not made on time.
The problem, according to the Carnell Report, is that rules have traditionally been stacked in favour of lenders. While the report conceded many defaults on commercial loans were a result of poor business decisions, it found operators were also often unfairly hampered by one-sided contracts that allowed lenders to move the goal posts with no, or minimal, recourse for customers.
The report found small businesses were vulnerable when faced with:

• Insufficient timeframes around key loan milestones.
• Misleading and conflicting information between bank sales staff and credit risk staff.
• A lack of transparency and potential conflict of interest around dealings with third parties, such as valuers, investigative accountants and receivers.
• No recourse other than the court system, which led to borrowers with few resources taking on banks with deep coffers and considerable legal clout.
• To address the imbalance, the inquiry recommended longer notice periods of changes to loan terms and clearer, more concise explanations of clauses and covenants.

Perhaps the most significant recommendation is for a new external dispute resolution (EDR) service for small business borrowers. The Federal Government has agreed to set up a one-stop-shop for consumer complaints to provide faster access to justice, make binding determinations and provide compensation.

Regardless of which way you turn, you should have a sound business plan to demonstrate revenue and, importantly, cash flow. If already in business, your previous three years’ financials will also be helpful. The more the funder knows about your business, the more likely they are to say “yes”.

It’s hard to go past free money, with various private sector and government grants up for grabs. Applications often take time and require significant information, but the windfall can be worth it.
Keep in mind competition is fierce, so be prepared to go the extra mile to promote your enterprise’s vision and worth.
Use the Federal Government Grant Finder to locate funds for a range of initiatives – from start-ups to exports and research and development – across various industries, including digital technology, agribusiness, science and many more.
Many companies and individuals also offer a leg-up for small businesses. The Business Aid Centre is a good starting point with helpful hints and listings by industry and grant dates.

Many mortgage brokers are leveraging their relationships with residential mortgage lenders to offer commercial finance. The benefit of borrowing through your broker is they know your financial situation and can explore your most suitable options.
The right finance can help you fuel growth and help build a strong and successful business. Get it wrong and the debt can often have the opposite effect. In business, the right finance is so much more than just finding the lowest interest rate and reducing fees. Not only do you need the right type of finance, you need to be able to choose from the widest range of options and the right structure. Needless to say, there are a lot of complexities. It can be a difficult area to navigate, and to have the confidence to know you’ve made the right choice.
With help from your broker you have the peace of mind knowing your business has the right funding in place, and leaving you to get on with doing what you do best – growing your business.