2. 2 Employee vs Employers Probability Employees Greater certainty in income Lower possible extremes Lower uncertainty with quality of life Start your own business Can make or lose a lot of money Average and standard deviation determined by education, experience, personality and ability Extremes in quality of life |$80,000 Average income
3. 3 Starting your own business Certain factors will: increase your expected earnings (middle of bell curve) decrease the standard deviation of earnings (spread of bell curve) … these include … Experience in the industry Education – especially an MBA UNSW’s AGSM MBA is top ranked in Australia DELIs enterprise control, managing people & relationships Marketing satisfying clear customer need in a specific segment
4. 4 Strong business planning – strategy and implementation Evolutionary and not revolutionary business idea Accounting – good control of cash flow Exit strategy – potential interest of buyers in 10 years Buying a franchise – a lot is done for you Buying another business already successful (but can be expensive) Strong emotional support from spouse and family Strong personal financial position (esp no debt!)
5. 5 Some tips from Andrew First work in the industry for 3+ years as employee Do a part-time MBA with AGSM while you are working Save hard and build up your capital to invest in business Avoid raising capital from anyone else too early Work out ways to be cash flow positive from day one This may involve the business doing something easy first! Avoid going into business with other people (esp friends) Don’t plan on drawing an income for the first three years Use your spouse’s income to cover cost of living Get a casual job teaching, night-shifts ... to supplement income
