Starting a business for the first time can be daunting task! So it’s important that you do a lot of research and talk to professionals to determine exactly what you need to do during the process. To save you some time on your own research, here are seven key areas you need to think about to start a successful business
1. Business name
Ensure the business name you choose is available for trademark and as an Internet domain name. Note that simply registering the business name does not give you any proprietary rights. You must trademark the business name to secure these rights. To check the availability of the business name for trademark, search the Australian Securities and Investments Commission (ASIC) directory. It is also important to check if the business name is available as an Internet domain name. You can check the availability of Australian domain names here: http://www.domainregistration.com.au/
2. Business structure
Before starting a business, you need to consider the advantages and disadvantages of each type of business structure and decide which best suits your business offering and personal needs. Your business structure is important as it can affect both the safety of your personal assets and your taxation and legal obligations. The most common business structures are:
- Sole trader: A sole trader is a type of structure where there is no legal separation between the business and the owner. The owner is, therefore, personally responsible for the liabilities of the business.
- Partnership: A partnership is a type of structure where two or more people legally share profits, risks and losses according to terms outlined in a partnership agreement.
- Trust: A trust is a relationship where a business is operated by third party who possesses legal control and the duty to run the business to benefit someone else.
- Company: A company is a legal entity separate from its members (shareholders)
3. Regulations, licences, and taxes
It’s important to understand the licences, taxes, and regulations you will need to obtain, pay, and follow for your business to avoid any potentially damaging legal or administrative penalties down the track. These licences, taxes and regulations will vary depending on your business structure, so once you have decided on your business structure and done some initial research into the licences, taxes, and regulations applicable to this structure, consult with a lawyer and an accountant to confirm your understanding and ensure you are in compliance with the law.
One of the most common reasons start-ups fail is poor financial management. Before starting a business, you need to consider two things: how much you will need from the business to cover your personal costs and where and when you need to spend in your business. When taking money out from your business to cover your personal costs, you need to account for your living costs and for those unexpected costs which are bound to arise. It is also important to consider where and when you need to spend money in your business. There will be a number of opportunities for you to save money on your business expenses, however, it is important to spend the money on the things that matter.
5. Lifestyle commitment
Starting a business is taxing on your finances and your time. It is not uncommon to spend what will seem like endless hours of work in the first couple of years. Therefore, it is also important to think about whether or not you are ready to commit to the business and potentially give up your personal life during this time.
6. Business plan
Planning is essential to the success of your business. Although these plans should be solid when starting your business, they should also be working documents upon which you regularly review and improve. Once you start the planning phase, you need to think about a business plan, a marketing plan, an export plan, a succession plan, and an emergency management and recovery plan. Templates for these plans can be found through the Australian Government website here.
7. Advice and support
Finally, it’s important to know who to turn to when you’re in need of advice. The Australian Government provides a range of material to assist you through each phase of starting a business. However, it is also good to have someone to talk to who knows your vision for the business. Our team of advisors at NBC are experts on the process of starting a new business. We would love to help, so if you have any questions, give us a call on (07) 3862 8777.