Confidence is a must for starting a new business, but needs to be partnered with a healthy dose of reality according to a banker with access to the numbers for 775,000 enterprises across the country. Rebecca Warren, who heads up the Commonwealth Bank’s small business division - customers with less than $3 million revenue and loans of less than $1 million - knows small business is not for the faint-hearted. Businesses relying on discretionary spending are experiencing tougher times than others.
Credit: Jessica Wyld “I don’t mind saying I don’t think I’ve got the guts to do it,” she said. “You don’t get the same paycheck every week, you get paid after your landlord, your staff, the government, everyone else.” When talking to a customer wanting to start a business Warren looks for four things she thinks increases the likelihood of success.
“Without breaking their spirit I like to ask them ‘Can you talk me through your downside planning?’” “If they answer that really solidly and efficiently I get a lot of peace of mind.” Not having thought through the implications of losing a key employee or a competitor opening up next door are warning signs. The second check for Warren is that there is more than gut feeling behind the business idea and the customer has direct experience of the relevant industry or location, or has sought counsel from those that do.
The 20-plus years banking veteran also probes whether the business aspirant understands the time comm.