Warning: Redrawing Investment Loans
ATO Focus on Investment Loan Redraws: Ensure Accurate Tax Reporting and Navigate Interest Claims with Expert Advice.
ATO Focus on Investment Loan Redraws: Ensure Accurate Tax Reporting and Navigate Interest Claims with Expert Advice.
PPSR explained: A key tool for safeguarding your interests in personal property and gaining an edge in insolvency situations.
Understanding GST on Foods: Chobani’s AAT Case Highlights the Complexities in Taxable and GST-Free Items.
Empower your organisation with a strong workplace culture. Essential for talent retention, employee engagement, and success in the competitive market.
Navigate small business complexities with expert partners. Essential support for establishing, growing, and safeguarding your business.
Your guide to strategic business planning: crafting a path, setting precise goals, and ensuring progress for entrepreneurial triumph.
Deciding to launch a new business is an exciting time for any business owner. However, it can also be quite a challenging time as you navigate the many considerations and requirements in starting a business to ensure that you do not run into preventable difficulties now and in the future. Preparation is key. In this blog, we will run you through important steps to follow in order to be prepared for what lies ahead.
Before you start it is important to recognise that starting up a business is not for everyone. There is a lot of work involved and you should be able to critically evaluate yourself and your idea first. Ask yourself questions such as: do you have the right skills? Do you have the capacity Have you got enough start-up capital put aside? Whilst you might have the skills of your trade, becoming a business owner will require you to adopt a wider range of skills such as business acumen and interpersonal skills to drive the business to be successful. You will need to consider leaving or partially leaving the security of your current employment to cope with the demands of the business. Make sure that you are in a comfortable financial position to cover not only the initial start-up costs such as registration and accounting fees but also the running costs of the business as it may be some time before it becomes profitable. Once you are confident you have a good business idea, and the timing is right then it is time to make some key business decisions.
The first key decision you’ll make when you start a business is its structure. Below are the four main structures to choose from and a brief outline of each:
| Structure | Pros | Cons |
| Sole Trader – individual business owner and operator. | Easy to set up, full control and low in cost. | Unlimited liability so personal assets are at risk and doesn’t allow for income splitting so you will be liable for tax on income earned. |
| Partnership – made up of two or more people who share income and losses. | Income will be shared between partners, moderately simple and inexpensive to set up with low reporting requirements. | Liability to each of the partners is unlimited and shared control so risk of disagreements with management. |
| Trust – a trustee conducts the business for the benefit of its beneficiaries. | Assets are protected and there is flexibility in distributing income to beneficiaries. | Can be complex and costly to set up and maintain, may create issues when borrowing. |
| Company – registered separate legal entity. | Limited liability. | Slightly more complex and costly to set up and maintain with greater reporting requirements. |
As you can see, the business structure you decide to operate under can impact on reporting obligations, taxes, personal liability, and ongoing costs. It is possible to change your business structure as the business expands but you don’t want to be changing structures due to oversights in the initial set up. Carefully consider these factors when choosing your business structure to make certain that it closely aligns with your business needs.
To have a clear vision of your business, planning is critical. A business plan is the place where you can document what your target market is, who your competitors are, your goals and objectives. Your business plan essentially becomes your road map for decision making and navigating roadblocks as you will be able to come back to your plan and see why you started the business in the first place. It will become the basis for developing marketing strategies and is useful when trying to secure outside lending or seeking aid from business advisors as you will be able to demonstrate exactly why they should invest and clearly explain what you are aspiring to achieve.
It will be important to operate your business with the correct licences, permits and registrations to ensure that your business is legally compliant. Check in with your industry standards to confirm that you have all the appropriate approvals to conduct and protect your business. A minimum requirement will be to apply for an Australian Business Number which registers your business with the Australian Taxation Office. Any further obligations and legal requirements will depend greatly on your business type and structure, location and whether you employ staff. Should you have a business name that you want to operate under, check that it is available and if so, register this as well to guarantee that you have rights to the name and be able to strengthen your brand.
As the owner of the business, you will have a responsibility to ensure that your workplace is a safe environment for your customers, employees, and yourself. Safeguarding by providing appropriate training, having emergency plans and adequate machinery and facilities will protect against injuries, associated costs, and improve staff productivity and wellness. Employers must be mindful that with the introduction of flexible working arrangements this obligation extends to any team members that are working remotely. Each state has its own minimum requirements and regulators so it will be crucial to become familiar with the laws that need to be adhered to. Consider consulting with an insurance broker as they can provide you with a comprehensive and cost-effective package to ensure that you and your business are covered should the unthinkable happen.
You are going to want a strong professional network that you can engage with as the need arises. This will include lawyers that can help you with employment contracts, accountants for business advice and compliance and IT experts to build your infrastructure, just to name a few. The best places to begin developing your network are through groups such as your local Chamber of Commerce, attending topical seminars and leveraging opportunities through your social media platforms. Developing your connections creates an endless list of opportunities that will help develop your business further. It is a powerful tool that will boost your profile within the community, unlock new sales leads, gain access to innovations that could enhance operations or meet useful business contacts and mentors. Once you have secured a list of reliable contacts you will be able to operate your business with greater confidence knowing that you have the right support.