Pitfalls Of Running My Own Business & How I Overcame Them

I have been running my own small consultancy business for the past 17 years and it has certainly not been all plain sailing.  

In the early days, I got a bit carried away when I saw my bank account growing with what seemed like a nice flow of income (certainly more than in my days of being employed by somebody else!). As good as it seemed, it didn't measure up well against my spending patterns. It was only after a few months that I realised my cash flow was weak and debts were starting to pile up. I had to kick myself as, in a previous life, I'd worked in the risk management space. I clearly wasn't practicing what I once preached, namely to control your business within a sphere of both current and projected business trends'.

I needed a plan. Nothing complex, just a simple budget that plotted what my expected income would look like over the next 12 months, particularly highlighting those months where the jobs are likely to be limited, such as over the Christmas period. Once I'd done that, I needed to look at my expenses on a month by month basis. There would be the regular things like rent, utilities, phones and certain consumables. Then there would be the items that might hit you just once or twice a year such as vehicle registration and maintenance, bulk supplies of materials etc. Finally I had to preserve monies for GST and other tax liabilities. I found that a simple budget gave me:

  • A disciplined framework in which to manage my business 
  • A 'helicopter view' as to both its present and future viability
  • A better understanding of where my priorities should be, the opportunities available and even jobs that I should try and avoid!'

My experience is not unusual and I thoroughly recommend that, if small businesses are not working with a proper budget, they should do so immediately! 

There are many suggested approaches available and a good starting point is by applying some of the tools on offer by the Dept. of Industry.

Ted Beecher
BLA Director



How BLA helped Arnel

Life was in a state of confusion and he felt like his world had come crashing down. This was  the sad day he had to shut the doors on his automotive business which he had put so much into over the years . Arnel can relate how exhausted he felt knowing that the whole family, particularly his wife who was also a director of their company,  were affected. Compounding things was the fact that their daughter had health problems at the time. 

Arnel  got on to Business Life Australia. He speaks of how they were able to be there for him by, at first, simply listening attentively to the his story. From then on he says they were able to bring hope to what he thought was a hopeless situation .  Arnel speaks of the value of just being able to talk to someone who is independent and in no way judgemental. This was despite the fact that the options appeared to be  very limited based on the state of the business and the amount of debt owing at the time. Under BLA's guidance Arnel completed a review of the business, its budget and what, if any, opportunities lie ahead for the future. He soon concluded that there was little chance of turning the business around and that insolvency was probably the only answer. Indeed this turned out to be precisely the case.

Arnel says 'You are always thinking about it and it's always preying on your mind.  However, once you start forgiving yourself as well others, things gradually start to get better. This becomes no more obvious than when you rebuild your relationship with your wife and your family. It's then that you feel you're truly getting your life back together again'.

With life as business owners now well behind them and once the formalities of closure were completed, both Arnel and his wife secured good jobs with other employers.  Arnel's experience and respected  standing in the motor industry clearly made this possible.  As a couple, they sat down and established some long term goals such as eventually getting into the real estate market. However, in the meantime, they made a decision to enjoy the many things they had not done before such as taking a holiday!

'This is not the end as it can turn around even though it seems like the end at the time', says Arnel. 'Just talk to the right people who can give you guidance based on their knowledge and experience and watch your life return to something truly beautiful!'

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