The pitfalls of small business

WHAT’S the old saying? Don’t turn your hobby into a chore? It seems many Australians aren’t listening — and they’re making it work.

The pitfalls of small business

WHAT’S the old saying? Don’t turn your hobby into a chore? It seems many Australians aren’t listening — and they’re making it work.

New research from Optus has revealed that 57 per cent of Australian workers have dreamt of starting an entrepreneurial exploit off the back of their hobby.

It found 43 per cent were looking to start an online business, with those living in rural areas (46 per cent) and men (47 per cent) expressing the most interest.

Youngsters are leading the charge, with 69 per cent of 18 to 24-year-olds and 67 per cent of 25 to 34-year-olds wanting to turn their hobby into profit. More than half (53 per cent) of baby boomers indicated an interest.

The hospitality and tourism industry was the biggest drawcard (54 per cent), followed by arts and crafts (21 per cent) and cafes (20 per cent).

Damian Cerini is one Australian who’s taken the leap. The former tourism marketing executive has spent the past two years turning his dual hobbies of cycling and wine tasting into a cycling tour business, Tour de Vines, which has quickly grown from a part-time occupation to a now-international operation set to launch in France, Italy, Chile and Argentina.

Mr Cerini says he wasn’t prepared for the reality of running his own business. “It’s kind of been a series of rolling mistakes — learning and correcting,” he says.

“Mainly they were around processes. The thing about working for an employer is that the business model is already set, it’s about the execution of the idea, whereas a new business is about testing the idea first and developing the systems.”

He says once you’re able to deliver a consistent customer experience and almost let it “run itself”, then you can look at growth.

“That’s the point I’m at the moment — adding French tours, Italy is coming online in the next few weeks, we’re doing tours down in South America. I’m at the point now where I’m looking at putting on an operations person in Sydney,” he says.

Reid Meldrum, head of small and medium business at Optus, says the key mistake is underestimating the amount of time it takes to think through how the business will actually operate.

“Often people are passionate about their hobby but they might not have all the skills to start up a small business,” he says. “Do you actually understand the business economics and the cashflow, for example?

“The most important thing is to do your research. There is so much great information out there, there’s community support, chambers of commerce, business mentoring clubs.”

So how much money do you need to start a business? Clearly it varies widely depending on the type of business you want to start.

The fact that so many younger people are looking to give it a go, however, indicates how much the barriers to entry have decreased.

“It’s particularly the case if you’re looking at a digital business,” Mr Meldrum says. “But secondly the younger generation has a different attitude — it’s that ‘fail fast’, tech start-up attitude of, I’m going to have a go, and if it doesn’t work I’ll morph it into something else.”

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