Picking the right venture
But for those entrepreneurs that choose to start a business simply for the challenge, it can be quite overwhelming deciding which path to choose.
Vito Russo faced this hurdle when he was setting up his business, Expanda Van Homes. With no concrete idea to go off, Russo spent some time deliberating over which industry to enter.
"I was looking for a business venture which supplied a product that customers needed... I felt a business with a product that was needed by consumers, rather than just wanted, would make it more recession-proof," he says.
"The business had to service a growth market and be able to be easily expanded by multiplication. I also had to enjoy what I was doing."
Russo initially considered the building industry, inspired by his passion for the sector, before deciding it was too volatile. However, he soon had a change of heart.
"There has been a housing shortage in Australia for as long as I remember, and the shortage of new homes built is getting to a crisis stage. This made me look closer at the building industry," he says.
"I concluded that while the housing industry booms and busts, the affordable housing market is more steady."
"When there is a housing boom, prices of homes increase and that makes the affordability out of reach for more people, making the affordable housing market bigger."
"When there is a downturn, and people have to downsize their home because they cannot afford it any longer, this increases the number of people looking at affordable housing, again making the affordable housing market bigger."
This led Russo to the conclusion that affordable housing solutions represented a viable business venture that would weather the storm in the event of a downturn.
Expanda Van Homes was founded in 2008 and recorded revenue of $600,000 in the previous financial year. But before it could make its mark in the industry, Russo had to deal with the various legalities associated with building the homes.
According to Russo, familiarising himself with manufacturing processes proved to the most challenging part of starting the business.
"Document everything you learn so it is easier to teach others. Having something to refer back to makes it easy for the next person to do the same procedure," he says.
Expanda Van Homes manufactures a housing patent solution, which looks and feels like a mobile home but has the legal status of a caravan, making it a unique product in the market.
"The patent design of our home allows it to be registered as a caravan. With the legal status of a caravan, it does not have to comply with red tape associated with conventional building," Russo says.
"This allows them to be used in more situations and they can be easily relocated."
Russo says the homes appeal to a broad array of consumers as a result of their high mobility, which wouldn't have been achieved had he not secured this particular patent design.
"With an increasing ageing population, one of Australia's fastest-growing markets is aged living. Our homes are ideally suited to cater for this market," he says.
"The fact that our homes are easily relocate-able also makes them attractive for other applications such as mining camps, remote housing and disaster relief housing."
"[The best part of starting a business] is seeing improvements in the process we use, and seeing the business grow 100% in less than three years."