In this eBook JPAbusiness managing director James Price asks 'are you the right person to go into business for yourself?' The eBook includes a personal story of transitioning from employment to self-employment, the JPAbusiness Business Owner's Checklist, plus 5 first steps for those ready to buy or start a business.

1. Pros and cons
of owning your
own business
Tips for transitioning from a job to a business

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Table
of
Contents
Introduction
...........................................................................................................
3
Chapter
1:
Employment
versus
business
ownership
...............................................
4
Positives of business ownership
..........................................................................................................................
4
Negatives of business ownership
.......................................................................................................................
4
Self-motivation key predictor of success
.........................................................................................................
5
Who is right for business ownership?
..............................................................................................................
6
A note on franchising
............................................................................................................................................
7
Chapter
2:
How
to
use
the
JPAbusiness
Business
Owner’s
Checklist
.......................
9
Chapter
3:
Lessons
from
a
start-­‐up
.......................................................................
13
Chapter
4:
Buying
or
starting
your
own
business
–
the
first
steps
.........................
17
1) Write down your reasons for wanting to go into business
...............................................................
17
2) Make sure you’re passionate about the opportunity
..........................................................................
18
3) Assess your relevant skills and capabilities
............................................................................................
18
4) Make sure you can afford the business opportunity
...........................................................................
19
5) Ensure there is a good return for the risk
..............................................................................................
20
Disclaimer: The information contained in this eBook is general in nature and should not
be taken as personal, professional advice. Readers should make their own inquiries and
obtain independent advice before making any decisions or taking any action.

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Introduction
Comments by James Price
JPAbusiness Pty Ltd
here is a myth that when you’re in the employed
workforce you should aspire to something more –
owning your own business.
Many people have this aspiration, but is owning a business actually any
‘better’ than being in an employed environment? I don’t think so.
Business ownership is only the right environment for some people, and for
many of those it’s only the right environment at the right time.
Before you spend months trawling through business advertising sites on the
internet, trying to decide which business would best suit you, first consider
whether you would suit business: are you the right person to go into
business for yourself?
It may sound obvious, but there are many people who’ve ventured into
business ownership who really shouldn’t have – they simply didn’t have the
right mix of skills, motivation, temperament and support.
In this eBook we’ve highlighted many of the attributes we consider important
predictors of future success for those who both buy and establish businesses.
We've also created the JPAbusiness Business Owner’s Checklist which is
a list of the 10 common attributes we regularly observe among successful
business owners.
Once you’ve assessed yourself against those attributes, or ingredients, you
can start thinking about which business is right for you.
To help with this process we’ve also included some first steps for those
ready to buy or start a business.
T

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Chapter 1: Employment versus business
ownership
Comments by James Price
JPAbusiness Pty Ltd
Positives of business ownership
Running your own business provides a range of opportunities, from actual to
perceived, including:
• a chance to share in the risk and rewards from earnings achieved
from a business enterprise, over and above a straightforward market
base salary;
• a chance to pursue ‘your passion’ to the ultimate conclusion;
• additional control and influence over what you do each day, and
• the ability to extend yourself and explore ideas in less constrained
ways than in an employed environment, where you operate according
to the business plans and objectives of a particular entity.
Negatives of
business ownership
Risk! As a business owner
you take on extra risk,
including:
• the risk of funding
your operation,
• compliance and
regulatory risks, and
• the risk of how the
market will value
your product or
service.

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Those risks need to have compensating rewards or returns to make going
into business for yourself a good deal.
Owning a business also means that, especially in the early days, you don’t get
much of a break – even when you’re not working, the business is never far
from your mind.
Similarly, owning a business is not like owning some real estate or a share in
a publicly listed company. It may not be as liquid an investment as these, and
it is not necessarily regularly traded or have a predictable earnings and risk
profile.
Self-motivation key predictor of success
If I look at all of our clients who are in successful businesses – small, medium
and large, family and joint shareholder, private businesses – the most
important common attribute among them is that they wake up every
morning with their engine
running.
In other words, they’re
internally motivated and
driven to do the things they
do in their business.
You could sit back and say
that business is simply
about how to effectively
manage labour, materials,
capital and information, to
produce something that is
valued by a consumer. But
it’s actually a lot more than
that.
There are a lot of soft skills involved in running a business that make the
difference between a successful business and others.

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Who is right for business ownership?
• Risk takers: Being a business owner is right for people who are
prepared to take calculated risks, who are prepared to live outside
the predictable, at least for a period of time.
• Strategic thinkers with an eye for detail: It’s right for people who
are good at identifying and monitoring detail, but who are also good at
having a broader, longer term, strategic perspective on what they’re
doing. This attribute is really interesting because not many people are
good at both of those things.
• Effective resource managers: Running a business is, as we said
before, about resource management, whether it is capital, labour,
materials or information, or intangible resources like relationships,
networks and brands. So running a business is for people who are
good at influencing and managing those things to deliver a planned or
desired outcome. The best business people are conductors of an
orchestra of resources, not the trumpet players.
• Leaders: Running a business is right for people who are leaders.
These people can identify a direction, an aim or goal, and put the flesh
around those plans in order to convince people – staff, customers,
suppliers, bankers, funders, regulatory authorities – to follow them on
a journey and value the product they’re delivering.

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It’s important to note that a number of these attributes can be seen in
corporate managers, but it’s possible to be a manager and not be a leader.
So if you’re thinking about going into business and you’re coming from an
employed corporate environment (you may be in logistics, finance or fast-
moving consumer goods), first consider whether you’re someone who
likes predictability; whether you manage well within a set of pre-determined
parameters and other known factors.
In this case you may be a good ‘deliverer’, but unless you have the ability to
see outside that set of parameters, see the full context of what the business is
trying to achieve, and be able to influence people outside your direct line
management, you may find running a business challenging and you may
struggle.
A note on franchising
If you want to go into business, but you’re not comfortable with the
unpredictability of self-employment, or the lack of support in a small business,
there is an industry called ‘franchising’.
Franchising has been around for many years and it’s whole reason for
being is to create predictability.
Franchising provides a system that creates consistency around the
delivery of a product and the running of a business.
A franchisee doesn’t have to be particularly entrepreneurial and they don’t
have to have the next bright idea.
Instead a franchisee needs to be:
• a good manager, and
• able to follow the system and deliver.

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Franchise or ‘free range’?
When exploring whether you want to go into business, you need to consider
whether you’re right for the franchise model, which is essentially a template
model, or whether you would prefer to operate in a more ‘free range’
environment.
Each model is right or wrong for different people.
Ultimately, franchising can’t protect against the downsides of a lack of self-
motivation, but the system of franchising provides a framework which
might make an individual more comfortable in dealing with the
uncertainty of the business ownership environment.

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Chapter 2: How to use the JPAbusiness
Business Owner’s Checklist
Comments by James Price
JPAbusiness Pty Ltd
n this chapter we’ve included the JPAbusiness Business Owner’s
Checklist.
The checklist is a useful first step for anyone considering moving from the
employed workforce to self-employment.
It consists of a list of 10 common attributes the JPAbusiness team tends to
find in people who successfully build and run businesses.
If you don’t have all these attributes when first embarking on self-employment,
we recommend you find a way to get them. You could seek professional
business advice and/or partner with people who can complement your skills
and attributes.
The checklist can also be accessed as a free download on our website.
I

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©"2015"JPAbusiness"Pty"Ltd" This"work"is"licensed"under"the"Creative"Commons"Attribution"4.0"International"License.""
ABN"62"150"534"099" To"view"a"copy"of"this"licence,"visit"http://creativecommons.org/licenses/by/4.0/."
JPAbusiness"Business"Owner’s"Checklist"
10#attributes#of#successful#business#owners#
hen considering whether to buy or start your own business, or remain in the employed
workforce, it may help to consider the following list of personal attributes.
These attributes are the common ‘ingredients’ the JPAbusiness team tends to find in people who
successfully build and run businesses.
If you don’t have all these attributes when first embarking on self-employment, we recommend you
find a way to get them. You could seek some professional business advice and/or partner with
people who can complement your skills and attributes.
One of the most important attributes is ‘self-awareness’, so make sure you’re honest with yourself in
your assessment of your abilities and personal attributes.
W
10#common#attributes#of#successful#business#owners"""""""""""""""""""""""""Sounds"like"you?"
1. Persistent You need to be someone who won’t take ‘no’ for an
answer. While you need to be realistic, willing to take
advice and objectively consider that advice, you also
need an element of doggedness in pursuing the
outcomes you require.
!
2. Capable of dealing
with uncertainty,
including extreme
lows and highs
For this attribute you need dual strengths: the ability to
keep sight of your long-term business objectives, while
simultaneously finding your way through short-term
turbulence. The turbulence may be due to great
successes or great disappointments, but it’s a matter of
navigating through while keeping the end goal in sight.
!
3. Self-driven,
self-motivated
You need to be someone who has their ‘engine’ running
when they get up each day. You need to be self-
motivated and internally driven – not reactive. Your
internal drive needs to ensure you remain consistent in
the way you think about and interact with your team,
customers and suppliers.
!

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4. Strategic,
big-picture thinker,
with an eye for detail
This requires the combination of visionary, strategic
thinking skills with an ability to monitor detail. For
example, you may have a well-developed strategic plan
for your business’ expansion over the next three years,
but unless you successfully manage your debtors and
cashflow today, that plan can never succeed.
!
5. Leader and
influencer
This attribute requires a degree of charisma, or ‘x’ factor,
that allows you to influence the way people think about
your value proposition, whether they be staff, customers,
suppliers, financiers etc. There is an element of ‘sales’
quality to this attribute, but in a very credible way.
!
6. Self-confident and
self-aware, but not
arrogant
You need to know yourself very well, both your strengths
and your areas of vulnerability. You need to spot
weaknesses and monitor them before anyone else and
also be willing to seek support to compensate for them.
!
7. Problem solver
and delivery person
You must be a practical person – a ‘doer’ – because you
need to bring a collection of resources together to deliver
a consistent offering. Being very busy, but not achieving
or creating anything, won't put dollars in your pocket in
terms of product sales.
!
8. Sharer Real business success means sharing your vision and
objectives with the market, staff and partners, and
engendering their interest and involvement in your
proposition. Once you have a team sharing your vision it
means you’ve moved from a sole operating environment
to a business that’s no longer just dependant on you, and
that adds to your business value.
!

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If you would like to learn more about the business advisory and broking services
offered by JPAbusiness, please contact the team by visiting
www.jpabusiness.com.au/contact-jpabusiness
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9. Ideas person,
with an eye to
commercialisation
and reality
I regularly come across inventors who are very innovative
and have great ideas. But an idea is not a business. In
business you have to lead with ideas and ensure you’re
constantly innovating, but you also have to understand
which ideas are right to commercialise and which strings
to pull to get them commercialised.
!
10. Someone who
can trust others
You can’t do everything, so you need to be able to
identify people you can trust to assist you where
necessary. These people may include advisors or
specialists, mentors, and other business people and
partners in a range of different fields. Your trust shouldn’t
be unconditional, but given in a way that’s conducive to
marshalling expertise that will benefit the business.
!

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Chapter 3: Lessons from a start-up
Comments by James Price
JPAbusiness Pty Ltd
started JPAbusiness about 14 years ago, after spending 10 years in the
employed workforce.
I was strongly motivated to create something of my own because I’d
spent my employed career gaining experience in different business aspects
and I had clear goals of what I wanted to achieve, in converting that
experience into a ‘home-grown and customer-focused’ business advisory firm.
However, it certainly wasn’t plain sailing, especially at the beginning.
The following are five things I felt in the first six to 12 months of starting
JPAbusiness. I’ve included them in this eBook to illustrate that even if you
are ‘the right fit’ for business ownership, you shouldn’t expect it to be easy.
1. Alone – I felt really alone. I was embarking on a course to develop
something and I felt it was all up to me to deliver and make it happen.
At the time I had just come out of a corporate environment where I had
managed business units with 800-plus staff.
In my own business I had myself and my business partner, my wife. It was a
very different, and quite isolating, feeling.
2. Confronted – I felt confronted by the challenge. In the corporate
environment I had staff and systems to do almost everything I needed.
If I needed some research done, a supplier called, a negotiation on a price,
some marketing done, or an employment contract written, I had someone to
do each of those things. I could tap into that network.
I

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If I needed to measure how the business was performing, we had reports for
that – they were already set up.
If I needed to check the direction to
see if I was going the right way, we
had a business plan and a
strategic plan to follow.
We had a framework, a business
culture, that was all created by
others and we operated within it.
So, in some respects, it was
reasonably easy. There were rules
to follow.
I had come from an environment
that was already created and
found myself in a situation where I
had to create everything myself. I
thought ‘where do I start on this
elephant?’ (As an aside, I focused
first on customers because I was
thinking about my back pocket –
without them I didn’t have
anything!)
3. Educated – I soon found that being in business was the ultimate learning
experience.
For the first three or four years, I felt the power of learning because suddenly,
no matter how experienced I was in an employed environment, I was
learning to do things I hadn’t previously had access to, even when I had
been running quite large business units.
I know it sounds like a cliché, but having to do all the things I previously had
staff to do was the ultimate learning experience, and I was certainly motivated
to learn.

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We’ve talked in previous eBooks about providing professional development
opportunities for staff and it’s very important to ensure there is governance,
structure and process to ensure that happens, but I can tell you now there is
nothing like learning on the job when you’re the boss.
Developing your skills becomes even more important when you’re taking all
the risk and it’s up to you whether the business happens or not – there’s
nowhere to hide!
When you choose to go into business only the successful people will let
that learning experience happen.
4. Challenged – Business ownership really tests your fortitude and makes
you question everything:
• Do I believe in the value proposition I’m trying to create here, or is it
all too hard?
• Can I actually do something that hasn’t been done before or, if it
has, can I do it better than the other players in this market?
• What’s going to get me out of bed every morning to make sure I do
that?
In Chapter 1 I said successful business owners are usually those that wake
up in the morning with their ‘engine running’ – they’re internally motivated,
driven and resilient.
You can debate whether drive and self-motivation are genetic traits or learned
skills, but regardless of the answer, I believe there is a strong correlation
between that internal motivation and success in business.
In business, just as in life, you can get highs and lows within an hour every
day and you need those traits to ride them out.
Now you also get these challenges thrown at you in an employed environment,
but in that situation you have a safety net. Yes, redundancies happen, yes
GFCs happen, but providing you’re doing your job reasonably well, you can
operate within a fairly predictable environment.

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When you’re starting your own business – for the first few years – the only
things you can predict are that the sun will come up and go down each day.
In order to manage the depressing times and even the highs, you need to
create your own structure, or framework, that will give a consistent
approach to building your business, despite the bumps, and also ensure you
have a developed support base.
Fortitude and self-motivation will help you achieve that.
5. Confident – Despite some of the negative emotions I felt starting out in
business, it was critical that I had confidence that I ‘knew my stuff’.
Equally important was having the confidence to acknowledge what I didn’t
know.
When you’re starting
out in business there is
no room for
arrogance –
acknowledging what
you’re not good at will
help you build a good
support network
sooner rather than
later.
Accept your
limitations, do what
you do well, and seek
help with the rest.
Pretend you can do it
all yourself and you will
set yourself up for a fall.

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Chapter 4: Buying or starting your own
business – the first steps
Comments by James Price
JPAbusiness Pty Ltd
ou’ve decided you want to go into business. Here are five first steps, or
considerations, to get you started.
1) Write down your reasons for wanting to go into
business
Sometimes in the business assessment
process you can lose sight of your
objectives regarding what you want to
achieve. Those objectives may include:
• You’re seeking a work/life
balance.
• You’ve designed an innovative
product and you want to
commercialise it.
• You want to take the experience
you’ve gained in an employed
environment and try it for yourself in a business environment.
There is often a financial objective, as well.
For example, we’ve had clients say: ‘We’ve gone through a family succession
issue. We’ve been employed by the family company for years, but now we
want to get out and buy a business for ourselves. We need to earn a net
$3000 a week after paying all bills and our wages because we have
commitments we need to cover.’
Y

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Another example may be that you have some funds to invest and you like the
idea of owning a business. You plan to put the business under management,
along with some personal involvement, and you want a return on investment
of 30% after tax.
2) Make sure you’re passionate about the opportunity
Before you start focusing on what it costs, whether you can pay for it, whether
you should buy it or start it up
yourself, set aside the money
issue and think: ‘Am I
passionate about this? If I
were here in five years’ time
would I still have a passion to
do this?’
Really test yourself on that
because this is a critical issue:
unless you have the passion
for it, you should be very
careful about stepping into a
business purchase.
3) Assess your relevant skills and capabilities
People often come to us with business opportunities they’ve found on the
internet, in newspapers, from talking to business brokers and advisors,
business owners and so on.
For example, they may be currently employed in the financial services sector
in a metropolitan area and they come with an opportunity to purchase a
regional hardware business.
They say: ‘We want to buy this hardware business because we would like a
tree change to a regional area. We also want to buy a business our teenage
children can work in.’

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Our response is: ‘That’s fine but what have you got in your capability, in your
kit bag of experience now, that is strongly transferable into this business?’
There is a big jump between financial services and hardware!
(In our fictitious example it just so happens the client was a builder by trade
before going into financial services – a happy ending!)
The point is, make sure you go into a business environment where you
can leverage some of your skills and capabilities.
It’s no different to getting a new job – you need to start from somewhere.
There’s a much higher risk if you swap from one sector to another with no
experience.
4) Make sure you can afford the business opportunity
What’s the business worth and have I got sufficient funds to invest?
Going into business is not like funding a new house purchase. Banks will
typically lend no more than 30-40% of business value and even less on
some businesses, depending on the
strength of the particular business and
its operations and loan-servicing ability.
Banks will lend against both commercial
and residential security but ultimately
banks want to be sure the business
has a strong business maintainable
earnings (BME – also known as
sustainable earnings).
Initially, before you get into a detailed
assessment about whether the business
stacks up for you, get some advice
about whether the asking price is reasonable based on the business’s
performance and calibrate that against the funds you have available to invest.
Those need to stack up, otherwise you’re just kicking tyres.

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5) Ensure there is a good return for the risk
Buying or creating a business means you can be buying a volatile revenue
stream that is highly dependent on yourself, the size and shape of the market,
external factors and trends.
For this reason you need to be sure you’re getting an adequate financial
return for your risk.
A common mistake is for people moving from an employed environment to a
business to think: ‘If the business can match my current wages, I’ve earned
enough from the business.’
Going into business is more than buying yourself a job.
If you’re working full time in the business you’ve bought, you need to be paid
a market salary for the
work you do. But you
also need a return
from the business
over and above that
salary to account for
the risk you’re taking.
So make sure, in
talking to your advisor
and analysing the
business opportunity,
the return is there.
Otherwise you’re really
just going into a lawn-
mowing business with one mower and one person pushing it – you – and no
real opportunity for a dividend premium.
…but be realistic about that return
The reverse of what I’ve just discussed is that many people coming from an
employed environment evaluate a business based on whether it will pay
them the same salary they’re on now.

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For instance, we’ve had people come to us from relatively senior management
roles where they’ve earned $250,000. They’ve looked at a business and said:
‘Right, it needs to pay me $250,000 a year plus a return.’
I can understand that desire because people tend to have financial
commitments in line with their salary.
However, when considering a business purchase, the better test is to look
at what your role in this business would be worth in the market.
So if you’re coming from a high-priced role in another industry, you’ll find it
very difficult to make the jump into a business environment if you stick hard
and fast to that salary without looking at comparable wages for the new role
in the sector you’re moving into.
Instead, you need to take into account the broader forms of reward.
Remember the earnings from owning a business are not just the salary or
drawings you might have, but can come in the form of additional payments or
dividends if the business performs well.
If you would like to learn more about the business broking and advisory
services offered by JPAbusiness, you can contact the team by visiting
www.jpabusiness.com.au/contact-jpabusiness