Thinking about starting your very own business in Sydney? If you think you have the product or service that could disrupt the market then guess what? You aren't alone. All entrepreneurs think they're going to take their industry by storm but very few end up prevailing as true unicorns.
In fact, New South Wales business conditions were down 10 points in the National Australia Bank's August 2017 confidence survey. While NSW business confidence remains up, the barriers to success remain – and businesses that don't identify these challenges with the help of professional business advisers will struggle to overcome them.
Demand for commercial leases in Sydney
While discussion of Sydney's property market tends to fixate on residential real estate, the commercial landscape is just as difficult for first-time entrants.
Analysis from Knight Frank shows that in the CBD in particular, demand is extremely high. Businesses that want a central office or retail space have to be fast and, in most cases, cashed up. However, this can put your cash flow at risk from the outset. Overpaying for a prime location doesn't guarantee you'll generate more business to make up the money.
Finding commercial space in outer ring growth areas (like Parramatta or Newcastle) can be one way forward, but those set on CBD real estate must use a professional business advisory service to help them make the right financial decisions.
Poor connectivity and infrastructure
As our lives become increasingly digital-focused, businesses need infrastructure to keep up. Online retail, remote employment arrangements and cloud-based accounting or bookkeeping services all rely on strong, stable internet connectivity.
However, recent NSW Business Chamber research indicates that local businesses are struggling on this front. 39 per cent of NSW small businesses surveyed had to wait more than a month for an NBN connection, 34 per cent found their internet disruptive, and on average businesses spent $9,000 dealing with NBN-related issues.
If you're starting a business in Sydney, you have to factor in these infrastructural problems and account for them before you open. It can halt your cash flow, put a strain on your working relationships and have a significant impact on your bottom line.
If you want to make running a business less of a challenge, contact our expert team in Sydney's Accountants Australia branch today.