By Courtney May
Are you looking to start up a new business but not sure exactly what to do, or where to start?
Using your passion and energy in the right areas will ensure you start on the right foot, and you will be well on your way to building the business of your dreams. Below we share five practical tips to assist you in establishing your new business.
1. Do your research
Before doing anything else, your first step is to do your research. This is one of the most important stages when starting up a new business. You should invest your time into planning what type of business you envision, and what products or services you will offer.
• Have you considered your business structure – i.e. sole trader, partnership, company?
• What do you know about the industry you will be operating in?
• Who is your customer? What are their wants & needs?
• Who are your competitors?
• What is your point of difference/competitive advantage? What can you offer that no one else can?
• Where will you sell your chosen product/service – i.e. online, shop front, office or home-based?
• Will you need to employ staff?
• Complete a SWOT (strengths, weaknesses, opportunities & threats) analysis
2. Create a plan
Once you feel confident in your business idea and your competitive advantage, you can now enter the planning stage. Things you will need to consider include:
• Building a network of mentors/professionals, such as your accountant, financial adviser and/or solicitor to assist with decisions on the best business structure, potential liability, business plan & budgeting
• Choosing an appropriate business – verifying on the ABR (Australian Business Register) and ASIC sites that it is available to be registered, and then registering the name
• Choosing a website (domain) address & registering it – even if you may not set up your website straight away (however this is recommended)
• Creating a business plan which should also include a budget/cashflow and SWOT analysis (mentioned in the research stage also)
• Considering your business location – online, home-based, leasing office/industrial space and the costs involved
3. Manage your finances
In order to start up a business, you need to ensure that you have adequate finances in place – particularly in the early days as growth can take time, and the beginning of your new venture can bring with it a large outlay of expenses.
It is essential to prepare a realistic budget and forecast the estimated income and expenses of your new business to work out your cash flow and know exactly what you have to spend. At this time, it can also be a great idea to set up a separate bank account in the business name, and keep your personal finances separate – it will definitely help when it comes to completing your accounting and taxation requirements at the end of each financial year.
4. Understand your legal & tax responsibilities
When setting up a new business there are many legal and taxation requirements, which include (but are not limited to) the following:
• Before you can officially trade as a business, you must apply for an ABN to register your business.
• Ensure that you comply with any licensing or permit requirements (depending upon the industry you are in)
• Registering for GST (if you and your accountant believe that your turnover each financial year is expected to be over $75,000, then you should register for GST). You can always register at a later date if required. Is your business going to be a sole trader or partnership structure or operate through a trust or a company? You need to understand tax implications for each one of these. If you are going to employ staff, you will come across worker’s compensation insurance and wages, payroll taxes and super obligations. You will need to lodge quarterly BAS’s, Monthly IAS’s or an Annual GST return depending on your circumstances. Please click on the following ATO link for more information on your legal and tax responsibilities: https://www.ato.gov.au/business/starting-your-own-business/choosing-your-business-structure/
5. Take Action & Never Give Up!
The next stage is to take action and put all your hard work and passion into getting your business up and running! You need to be professional and let your customers know that you are running a serious business. To do this it might be helpful to acquire business cards, get a business email address, advertise your business on social media (i.e. Facebook, Instagram), create a website, hand out flyers or utilise the many other advertising avenues available. This helps to let customers know that your business is out there and you are open and ready to do business!
The better you prepare from the beginning, the smoother the process will be when starting up and running your business. May your great ideas be the start of an exciting business!