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Entrepreneur shares top tips on how to run a start-up business

Start-up chief entrepreneur Mark Sowerby with Rockhampton gym owner Simon Price
Entrepreneur Mark Sowerby met with Rockhampton gym owner Simon Price this week.

ABC News: Isabella Higgins

Figures show the majority of new businesses in Queensland are based in the state's south-east, but there is a push to encourage entrepreneurs in regional towns to try to tackle the high unemployment rates.

Mark Sowerby founded a successful funds management firm that is now one of Australia's top-listed companies.

He was then appointed by the Queensland Government as its first chief entrepreneur.

Mr Sowerby visited 11 regional towns across the state this week to promote "start-up" culture in regions.

During his regional blitz, Mr Sowerby shared his top tips on how to run a successful start-up and the pitfalls to avoid.

Top tips:

1. Do what you like

"If you don't have that base motivation, then I think you're setting yourself up for failure. It needs to, in a way, be a lifestyle choice and a chance to express yourself," he said.

"What's the point of doing something we don't like? I really worked out in my mid-30s that I liked building businesses.

"People are told to start a business that solves a problem, but you need to like what you're doing."

2. Be good at it

"Know what you're doing, and be able to do it well, and then bring people into your business," he said.

"If you know it, then you'll know if the people you've brought in [to your business] are doing their job well.

"You need to build your skills in the area you're working - train, practice and be as good as you can in your field."

3. Spend smart

"I raised $3 million pre-IPO and I reckon I wasted a third of it on silly frivolous things ... I didn't mean to do it but I spent it on things I thought I should now that I had money," he said.

"You've got to spend money well. Every one [business] I invested in I think they spent a third of their money on frivolous things that don't get them to your goal."

4. Know your motivation

"It has to be a lifestyle choice, where you're choosing to control your own destiny and using that business to express yourself. It's your platform to take on the world, or change the life of your family," he said.

"You need to know your motivation and let that be the base of all your decision. It is relentless and hard and you want to go into work and enjoy it. You can build a business where you're surrounded by people you like."

Mistakes:

1. Expecting to get rich quickly

"If you're doing it because you think you're going to get rich, or take a punt with someone else's money, or you think it looks sexy, you're setting yourself up for failure," Mr Sowerby said.

"Starting a business is your opportunity to express yourself."

2. Spending other people's money

"Don't raise money until you've exhausted all your own capital," he said.

"I do think the first money you raise should be from people you love, because you will be very careful with their money.

"It's money that's not going to give you validation or an ego, they're backing you because they love you and want you to do well.

"You're not going to waste their money the way you would equity holders.

"You want to bootstrap for as long as you can ... for every shareholder you introduce you double your risk."

3. Not doing something you're good at

"I do think successful people are pretty good at most things, but you need to have the one key skill. If you don't have a skill you can go out and build your skill," Mr Sowerby said.

"In the software space you can go from being a pretty average programmer to a pretty good one in six months.

"If you're a marketing manager, do it, do it for ages, know it inside out and then bring people into your business."

4. Not starting at all

"So many people don't just make the leap and start so many people think they need this amazing idea, that's going to change the world and perfect business plan," he said.

"I think everyone gets caught up on all the hurdles. I think people are scared of taking risks. You just have to take the leap."