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Transcript of Busines Steps
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Welcome to theQueenslandGovernments 7 steps tobusiness success.
Starting a business can be both rewarding and
challenging. However, poor planning and lack of
preparation contribute to many business failures.
By following the 7 steps outlined in this guide you
will increase your chances of business success.
What are the 7 steps tobusiness success? Step 1 - Consider your suitabilit y
Step 2 - Consider your idea
Step 3 - Consider your market
Step 4 - Consider your competition
Step 5 - Consider the environment
Step 6 - Consider your finances
Step 7 - Consider your start-up
At tachments and worksheets:
Skills checklist
Customer profile chart
Market actions worksheet
Competitor profile
Financial figures worksheet
Pricing worksheet
Locations chart
Useful contacts
Further support and assis tance
Step 1 - consider yoursuitabilityBefore starting a business, you must consider
your suitability. You need to question if you have
the time, skills, knowledge and energy to operate
a business.
7 Steps to Business SuccessA guide to help you assess whether your business will be a success
Will your business let youachieve your goals? Make a list of all of your goals (business,
lifestyle, family, health, social, spiritual and
financial).
Which goals will your business help you
achieve?
Identify areas of potential conflict. How can
you eliminate or reduce conflict between your
goals? What goals are absolute priorities? What
goals are you willing to compromise?
Do you have the right skills andknowledge to run a successfulbusiness? Review and assess your skill strengths and
weaknesses. Used the attached Skills
checklist as a guide.
Research the skills and knowledge that otherpeople have in the industry.
Make a list of the training or development you
may need. Be sure to include managerial and
business training if required.
Do you have the mot ivation, timeand energy to operate abusiness? Ask family and friends if they support your
decision to go into business. Ask their opinion.
Do they believe you have the necessarypersonal qualities to run a business?
Think about what motivates you. How will you
stay motivated through difficult and busy
times?
Consider how much time you can realistically
devote to the business. Are you in general
good health? Long hours and stress can affect
your energy and motivation.
Do you have someone who will help you stay
motivated? Are your family and friends
supportive?
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Establish networks. Talk to people doing
similar things to you. Learn from and motivate
each other.
Step 2 consider yourideaOnce you have considered your suitability, it is
time start thinking about your idea. Is it feasible?
Will people in interested in what you are offering?
What type of business will you have?
Will people be interested in whatyou are offering? Seek feedback from a wide range of people.
What do you plan to offer? Would theypurchase it? Why or why not?
Start conducting some market research.
Market research will help you assess whether
there will be adequate demand for your
product or service.
Unsure of what market research is or need
some assistance in conducting your research?
Contact the Business Support Centre on 13
25 23 or visit www.business.qld.gov.au.
Have you consider a range ofbusiness options? Start thinking about the advantages and
disadvantages associated with different
options, such as buying a business,
franchising or starting from scratch.
Contact business brokers in the Yellow Pages
(www.yellowpages.com.au) to find out if there
are any businesses for sale that may interest
you.
Visit a newsagent or library for
franchise/business opportunity directories andjournals.
Monitor the businesses for sale section within
local newspapers.
Is there enough potentialdemand for you product orservice offering? Ask people working in this industry to provide
an indication of the level of demand.
Sometimes people in similar businesses arewilling to help, but if not, try talking to
suppliers or businesses interstate who are not
your direct competitors.
Consider observing other similar businessesto determine the level of demand and observecustomers to find out the average sale valueper customer.
If it is a new idea, be sure to conduct marketresearch to determine the level of demandand its feasibility.
Contact relevant industry associations to
obtain information from experienced and
helpful people in your industry.
For further information on your industry or for
a list of industry associations contact the
Business Support Centre on 13 25 23 or visit
www.business.qld.gov.au.
Step 3 consider themarketIt is important that you understand and indentify
the market (your potential customers) that will
purchase your products and/or services. Those
customers who are most likely to buy your product
or service are referred to as your target market.
You will also need to determine how you are will
attract this target market and what marketingactivities will you undertake.
What type of people will buy fromyou and who will you target? Make a list of the characteristics of the people
who will buy your product or service. What will
their buying behaviour be?
Where are the majority of these people
located?
Be sure to complete the Customer profit
chart attached to this guide.
Use demographic information to find out the
characteristics and size of your target market
in your chosen business location. For more
information contact the Business Support
Centre on 13 25 23.
Have you thought about how youwill attract your target market?
Have you thought about your marketingstrategy?
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What marketing tools will you use to reach
your target market and draw them to your
business?
Will your marketing activities give your
customers a reason to contact you and buy
from you?
Do you have enough time andmoney to devote to yourmarketing activities? Consider how many people you need to reach
to achieve your expected levels of sales.
Consider the cost and time needed for each
promotional campaign.
Complete the Marketing actions worksheet
attached to this guide.
Step 4 consider yourcompetitionConducting research on your competitors is very
important. Successful businesses know who their
competitors are, what they are doing and how
their customers view them. Once you have done
this research it is important to identify why
customers will buy from you and not yourcompetitors. What will give you the leading edge?
Have you researched the level ofcompetition for theproduct/service you wi ll beoffering? Assess the level of competition for your
product/service in your chosen businesslocation.
Does the level of competition mean that youshould consider a few different locations?
Are there benefits to being located near your
competitors?
Use online resources such as Yellow Pages
Online to determine the number and type of
competitors in and around your potential
business location. Visit
www.yellowpages.com.au/ .
What do your competitors offer? Collect flyers, price lists and any other
material from your competitors.
Find out what all your competitors provide
and for what price.
Consider purchasing from your competitors toassess their product/service.
How does your competitors staff interact withcustomers? Can you indentify any specialcustomer service specialties?
Compare advertisements and any streetsignage used by your competitors. How arethey marketing themselves? Are theresimilarities or differences in what they areoffering?
Complete the Competitor profile chartattached to this guide.
What can your business offerthat is better than yourcompetitors? Consider what features and benefits
customers are looking for and what is notcurrently provided by your competitors.
What are your competitors currently offering?How are they delivering it? What can you dobetter?
Step 5 consider theenvironmentBy having a good understanding of your
environment, the industry along with internal and
external factors that may have affect you business
will enhance your chances of business success.
What external factors may havean impact on your business? Are you able to identify any trends or impacts
that could affect your industry? These factorsmay have a positive or negative outlook.
Think about political, global, technological,social and environmental issues. Forexample, climate change is an importantenvironmental issue. Have you examined howthe impacts of climate change could affectyour business?
Think about other types of risks associatedwith operating a business. For example, whatwill be the potential impact of a naturaldisaster or increased energy costs on your
business? What will be the possible flow-oneffects? How will your business deal with
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these various types of risks? For moreinformation on risk management and businesscontinuity go to www.business.qld.gov.au.
What are the features of your location andhow might this impact on your success?
The Business Support Centre can provide youwith regional profiles, demographics for yourlocation and a range of industry specificinformation, which will increase yourunderstanding of you business environment.For more information call the Business SupportCentre on 13 25 23.
What internal factors may havean impact on your business? What will be the strengths and weaknesses of
you and your business? How will you use yourstrengths to your full advantage?
What strategies can you put in places toaddress the weaknesses? Do you requiremore skills to effectively run your business?
What is the future outlook foryour industry? Having a good understanding of your industry
will allow you to indentify potential
opportunities and plan for future growth. Is your industry predicted to experience
growth or will it decline? How will this impact
your business?
Contact the Business Support on 13 25 23 or
visit www.business.qld.gov.aufor more
information on market and industry research.
Step 6 consider yourfinances
Understanding your finances, establishingprocedures and ensuring you have adequate start
up and operational funds are imperative in
ensuring the success of your business.
What will your start up costs be? Start listing and estimating your establishment
costs. It is recommended that you over
estimate, rather than underestimate. Think
about how you will finance these startup
costs.
Use financial industry benchmarks tounderstand what some of your potential costs
may be this will help you with you cash flow
forecast. For more information on
benchmarking visit www.business.qld.gov.au
or contact the Business Support Centre on 13
25 23.
Can you make enough income tocover your costs and eventuallymake money? Complete the Financial figures worksheet
attached to this guide. Calculate key figuressuch as breakeven point, gross profit and net
profit.This will help you estimate the level of
sales you need tocover costs and make aprofit. If you are uncertain of how to calculatethese terms, visit an accountant or under takefinancial training.
What level of profitability can you expect? Ifyou decide you will need to approach afinancial institute for additional funding youwill have to develop a business plan. Contactthe Business Support Centre on 13 25 23 orvisit www.business.qld.gov.aufor furtherinformation.
Remember, understanding finances is an areawhere many small business owners comeunstuck. You can participate in a webinar or
financial workshop in your region. Go towww.business.qld.gov.auor call the BusinessSupport Centre on 13 25 23 for more information.
http://www.business.qld.gov.au/http://www.business.qld.gov.au/http://www.business.qld.gov.au/http://www.business.qld.gov.au/http://www.business.qld.gov.au/http://www.business.qld.gov.au/http://www.business.qld.gov.au/http://www.business.qld.gov.au/ -
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What will you charge for yourproduct or service? Setting the right prices for your products or
services with help you maximize profits whilemaintaining a good relationship with yourcustomers.
When you are deciding your price with willneed to consider your existing costs, theprices offered by your competitors and yourtarget market.
Fill in the Pricing worksheet attached to thisguide.
For more information on pricing your productor service visit www.business.qld.gov.au.
What is the worst case scenario?
Estimate how long you can survive withoutmaking any money from your business. Whatif interest rates rise or fall? What if finance isnot available to the extent you need?
Develop a household budget to manage yourmoney until the business starts earningincome.
Get an accountant to help you prepare cashflow forecasts and develop your
recordkeeping system. If the business is unsuccessful, will you have
the ability to earn income from other sourcesand repay debts?
Step 7 consider yourstartupYou need to start thinking about how you will
structure your business and what licences and
regulatory requirements will be applicable to you.
You will also need to think about the potential
location of your business as well as the resources
you will need to start operating.
Have you considered what legaland regulatory requirementsyour business may need? Have you considered what business structure
you will use (sole trader, partnership orcompany)? You may need to get professional
advice to help you decide.
See a solicitor before buying a business orsigning any contracts.
The Business Support Centre can provide afull list of relevant licences and regulatory
requirements on a local, state and federallevel. Contact the Business Support Centre on13 25 23 or visit www.business.qld.gov.au.
Do you have the necessaryresources to get your businessstarted? What equipment will you need? Will you buy
or lease the equipment?
What stock do you need and how much?Where will you store your stock and how will
you keep track of it? Who will be you supplier/s? They need to be
reliable and have competitive prices, do youresearch.
Have you considered the type and cost ofinsurance? This is very important. Talk to aninsurance broker.
You may need to employ staff to assist youwith operations. Choosing the right start isvery important.
Visit www.business.qld.gov.au for extensiveinformation on employing staff.
Do you have the best locationyou can afford? When you are selecting you business location
you need to determine where you customersare located, will the location suite their needsand is it convenient to them.
Is your chosen location practical andaffordable for you to operate your businessand does it meet your my needs?
It is a good idea to consider a number of
potential business locations and assess theadvantages and disadvantages of each. Usethe Locations chart attached to this guide.
Before signing a lease, contract oragreement, make sure you know your rights.More information is available atwww.business.qld.gov.au. It is also importantthat you speak with a solicitor.
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Attachment 1 business skills list
Which of these skills are important in your business and which do youhave?
Financial skills Profit planning and budgeting Financial forecasting
Bookkeeping Credit management
Purchasing Cash flow management
Costing and pricing Cost analysis and control
Payroll Tax planning
Marketing skills Written and presentation skills Competitor analysis
Selling Product development
Customer analysis Merchandising
Promotion Market research
Graphic design Product testing
Negotiation Advertising
Management skills Coordination and planning Training and development
Communication Problem solving
Delegation Stock control
Interpersonal
Decision making
Recruitment Leadership
Supervision Time management
Business skills checklist 1
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Attachment 2 customer profile chart
Who are they?Applies?
Yes/noMy customers
Age (e.g. child, teenager, young,
middle aged, retired)Family (e.g. size, non traditional,
extended)
Gender (male, female)
Occupation (e.g. labourer, technical,
professional)
Income level (e.g. lower, middle,
high)
Education (e.g. primary, secondary,
tertiary)
Cultural background (e.g. Caucasian,African, Asian)
Where are they?
Location (e.g. inner city, suburban,
rural, suburbs)
Distance (e.g. distance from your
business, locality preference)
Residence (e.g. low, medium, or high
density housing)
Customer characteristicsPersonality (e.g. leader, status
conscious, outgoing, introvert)
Buying behaviour (e.g. comfort,
conveniences, economical, pride)
Buying patterns (e.g. seasonal,
usage rate, frequency of purchase)
Lifestyle (e.g. health conscious,
family orientated, career orientated,
community active)
Expectations (e.g. service, quality,
risk, influence)
Customer profile checklist 1
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Attachment 3 marketing actions worksheet
Customercharacteristics
Marketsegments
Marketingstrategy
Predictedeffectiveness
Potentialcosts
Corporate females
interested in stress
management
Brochures
distributed in
mainly female
workplaces with
specials for Pilates
classes.
200 brochures
distributed with 2
percent conversion
rate equals 4 new
clients.
$50.00Example: gym, males
and females, health
conscious, mid-high
income, all ages,
inner city locations
Young males
interested in body
building
Advertisement with
body building
photo in local
sports newspaper
Readership of 2000
with conversion
rate of 1.5 percent
equals 30 new
clients.
$250.00
Marketing actions worksheet 1
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Attachment 4 competitor profile
Answer the fol lowing questions for each of your compet itors
Company name
What is their location?
How would you rank their locationand why? (e.g. exposure, trafficflow, access, parking, otherbusinesses)
How many customers do theyhave in a particular time period?(e.g. you could observe the officeor store)
How many employees do theyhave?
How effective are theiremployees at doing their job?
What is their pricing and refundpolicy?
What customers are theytargeting?
How do they advertise or marketthemselves?
What is their online presence(e.g. website, social media)?
What is their competitiveadvantage?
Competitor profile 1
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Attachment 5 financial figures worksheet
Income
How much income do you desire?
Are you prepared to potentially earn less income in the initial stages of
your business?
What minimum income do you require?
What financial investment will be required for your business?
How much could you earn by investing this money? (A)
How much could you earn by working for someone else? (B)
Add the amounts in A and B. If the income is greater than what you can realistically expect from yourbusiness, are you prepared to forego this additional income to be your own boss with the prospects of moresubstantial profit/income in future years?
How to estimate sales
Try approaching your relevant Industry Association or other organisation to obtain benchmarking data.Alternatively, contact the Business Support Centre on 13 25 23 or visit www.business.qld.gov.au for moreinformation on benchmarking.
Market potential/market share. Find out the turnover for your industry. How many competing businesses arethere? Divide the turnover by the number of businesses to work out the market share for each business.This is the sort of turnover you should be aiming for.
Observe your competitors. How many customers do they have, how much do they spend? Observe atdifferent times of the day and week. What do you think their daily or weekly turnover would be?
Financial figu res worksheet 1
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Attachment 6 pricing worksheet A
Step 1 what are your competitors charging?
Product/service
Competitor
A
Competitor
B
Competitor
C
Competitor
D Average
1.
2.
3.
4.
Step 2 what is your pricing strategy?
Elasticity pricing :When demand for aproduct is sensitiveto the price (e.g.grocer y items).
The higher the pricethe lower yourdemand.
Skimming
pricing : For newproducts whereinitial price is sethigh to attractpeople who mostwant it and who arewilling to pay (e.g.technology).
Penetration
pricing :Aims forhigh sales througha lower price. Forproducts/servicesthat would notattract an initialelite market. Lowprofit margin.
Image pricing:The perceivedimage of theproduct outweighsthe actual price,such as luxurygoods.
Discount pricing :
This method isaimed at thebudget end of themarket whereconsumers arewilling to forgosome quality orservice for a lower
price.
Step 3 a few methods to help you determine your pr ices
Use a simple mark-up method
How? Take the cost price and adda certain proportion to all theitems. Talk to your suppliers,competitors or associations to findan industry norm or standard.
When? Useful when you havemultiple products at different pricepoints and the costing method istoo complex.
Remember to adjust the mark-updepending on your strategy. Forexample, if you are usingpenetration pricing you would usea lower mark-up than competitors.
Use a costing methodHow? Calculate all your fixedoverheads. Add this to the cost ofsales.
When? This is the best method touse to make sure you aremaximising your profit, althoughit can be a more time- consumingand labour intensive method.
Remember if you use thismethod you really need to haveexcellent record-keeping skills soyou are aware of all of yourcosts.
Use a charge per hour method
How? Refer to the next table fora step by step guide.
When? When you are deliveringa service rather than a product.
Remember It is easy to over-estimate the number of hoursand days you have available to
work.Pricing worksheet A 1
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Attachment 7 pricing worksheet B
Step 4 how to calculate a charge per hour for services
1. Calcu latemaximumnumber of hours
available
ANumber of hours per
week (e.g. 38)
BNumber of weeks per
year (e.g. 52)
A x BNumber of hours peryear (e.g. 38 x 52 =
1,976)
2. Deduct time off CPublic holidays and
annual leave (e.g. 30 dayx 8 hours = 240 hours)
D
Sick Leave and Misc(e.g. 40 days x 8 hrs
= 320 hrs)
(A x B) C D
Total chargeablehours (e.g. 1,976hrs 240 hrs
320 hrs = 1,416 hrs)3. Calculate totalturnover requiredper year
E
Estimated Overheadsper year (e.g. $32,000
calculate thisusing your financialfigures worksheet)
F
What profit would youlike to earn per year?
(e.g.$35,000)
E + F
Total turnoverneeded per year
(e.g. $32,000 +$35,000 = $67,000
turnover)4. Calcu latecharge per hour
H
Total chargeable hours(e.g. 1,416)
(E + F)/H
Total turnover dividedby total chargeable
hours (e.g.$67,000/1,416 =$47.31 per hour)
Pricing worksheet B 1
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Attachment 8 locations chart
Location 1 Location 2 Location 3 Location 4
What is thepassing trafficlike?
Is it near anintersection?Does it preventaccess?
Is there ampleparking?
What fittings areincluded andwhat quality arethey?
What is thegeneralappearance ofthe building?
How much spaceis there? Is thereadequate space?
Are you locatednear yourclients?
What is the cost?
Locations chart 1
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Useful contactsAusRegistry Pty LtdDomain name registration
03 9866 3710 or visit www.ausregistry.com.au
Austral ian Copyright Council (ACC) Copyright
02 8815 9777 or visit www.copyright.org.au
Aust ralian Insti tu te of ManagementDevelopment of management and leadership
1300 882 895 or visit www.aim.com.au/
Austral ian Made/Austral ian Grown(Australian Made logo / stickers)
Telephone 1800 350 520 or visit www.australianmade.com.au
Austral ian Securi ties & Investments Commiss ion(ASIC)
Company registration and business name searches
1300 300 630 or visit www.asic.gov.au
Austral ian Taxation Office
Telephone 13 28 66 or visit www.ato.gov.au
Chamber of Commerce and Industry Queensland
07 3842 2244 or visit www.cciq.com.au
CPA Australia
Accountants
1300 137 322 or visit www.cpaaustralia.com.au
Franchise Council of Australia
Franchise information
03 9508 0888 or visit www.franchise.org.au
GrantsLink
Information on Commonwealth grants programmes, with links to state/local government and
non government/commercial sites.
1800 026 222 or visit www.grantslink.gov.au
GS1 Aust ralia
Barcodes
1300 366 033 or visit www.gs1au.org
http://www.ausregistry.com.au/http://www.ausregistry.com.au/http://www.copyright.org.au/http://www.copyright.org.au/http://www.aim.com.au/http://www.australianmade.com.au/http://www.australianmade.com.au/http://www.asic.gov.au/http://www.asic.gov.au/http://www.ato.gov.au/http://www.ato.gov.au/http://www.cciq.com.au/http://www.cciq.com.au/http://www.cpaaustralia.com.au/http://www.cpaaustralia.com.au/http://www.franchise.org.au/http://www.franchise.org.au/http://www.grantslink.gov.au/http://www.grantslink.gov.au/http://www.gs1au.org/http://www.gs1au.org/http://www.gs1au.org/http://www.grantslink.gov.au/http://www.franchise.org.au/http://www.cpaaustralia.com.au/http://www.cciq.com.au/http://www.ato.gov.au/http://www.asic.gov.au/http://www.australianmade.com.au/http://www.aim.com.au/http://www.copyright.org.au/http://www.ausregistry.com.au/ -
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IP Australia
IP Australia is the Australian Government agency responsible for granting rights in patents,
trademarks and designs.
1300 651 010 or visit www.ipaustralia.gov.au
National Insurance Brokers Association o f Aust ralia
Need a Broker Service
02 9964 9400 or visit www.needabroker.com.au
Office of Fair Trading
13 74 68 or visit www.fairtrading.qld.gov.au
Queensland Workplace Rights Ombudsman
Independent advice and information on industrial relations and work related matters
1300 737 841 or visit www.workplacerights.qld.gov.au
The Australian Institute for Commercialisation (AIC)
New product commercialisation and development assistance
1300 364 739 or visit www.ausicom.com
Workcover Queensland
Workers Compensation Insurance
1300 362 128 or visit www.workcoverqld.com.au
Workplace Health and Safety
1300 369 915or visit www.deir.qld.gov.au/workplace/index.htm
http://www.ipaustralia.gov.au/http://www.ipaustralia.gov.au/http://www.needabroker.com.au/http://www.needabroker.com.au/http://www.fairtrading.qld.gov.au/http://www.workplacerights.qld.gov.au/http://www.workplacerights.qld.gov.au/http://www.ausicom.com/http://www.ausicom.com/http://www.workcoverqld.com.au/http://www.deir.qld.gov.au/workplace/index.htmhttp://www.deir.qld.gov.au/workplace/index.htmhttp://www.workcoverqld.com.au/http://www.ausicom.com/http://www.workplacerights.qld.gov.au/http://www.fairtrading.qld.gov.au/http://www.needabroker.com.au/http://www.ipaustralia.gov.au/ -
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Further assistance
Business planningFor more information about any of the following tools and services please contact us on 13 25
23.
Easy Plan
The Easy Plan CD template and guide saves you time by helping you write your business
plan, calculate your businesss cash flow and forecast potential profits. $16.50 (inc GST)
Think. Plan. Grow.
The interactive Think Plan Grow CD is a complete business planning and monitoring suite
which includes sample business plans, a detailed planning guide, financial spreadsheets and
a presentation template. $38.50 (inc GST)
PlanSMARTKit
Whether you're starting a business or investigating new opportunities, a PlanSMARTkitprovides you with essential market, industry and research information that is tailored to yourspecific business type and location.
The information in a PlanSMARTkit is crucial to your business planning as it gives you aclear picture of the factors currently affecting the potential success of your business.
A PlanSMARTkit may help you to identify unexpected opportunities or prevent costlymistakes, both of which will give your business a strong foundation. $44.00 (inc GST)
SmartLicence
SmartLicence provides access to information on local, state and federal government businesslicensing permits and registrations. The personalised service allows for lodgement, payment
and process on the most common licenses and business name registrations.
Government Business Information Service (GOBiS)GOBiS connects business with local, state and federal government services and programs.
Available business support includes workshops and seminars, financial and export
assistance, market and industry research and more.
Workshops and seminarsWe provide a series of workshops and seminars covering business planning, marketing and
financial for both for business intenders and owners.
WebinarsWeb-based seminars are an ideal way for you to improve your business skills without having
to leave your desk. We provide a range of webinar topics to help you plan for and continually
improve your business.
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Trade and exportTrade and Investment Queensland (www.export.qld.gov.au) helps Queensland companies
earn more export dollars through individualised and targeted services such as workshops,
seminars, networking events and mentoring.
Digital channelsThe Business and Industry website (www.business.qld.gov.au) hosts over 200 learning
guides, diagnostics, tools and resources to assist people, start, run and grow their business.
Our social media channels deliver updates; provide links to useful information and assistance
and broadcasts informative case study videos to the business community.
For more information visit:
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