Bringing a product or service from concept to life can be exhilarating. Offering it to the world and building a business doing so can be financially and personally rewarding. Equally, starting a new business is full of challenges and requires a lot of commitment, especially for first timers.
Below is a guide to help you get started.
Before starting anything, you will need to have a strong business idea. This idea is usually based on your interests and meets a need in the market in other words, finding a solution to a problem that you want to fix. This can help you determine your product or service, target market and set your goals and expectations. With that in mind, you can decide on how what business type, model, or structure most suits your needs and financial circumstances.
Click here if you would like to understand more on the different business structures.
A business name and location will also need to be chosen and registered with Australian Securities & Investment Commissions (ASIC). Your business name should convey a message about your visions and the positioning of your products and services.
Planning for Business Resilience
A general business plan will help you keep the business on track and organise your potentials and goals. You can use SMART (specific, measurable, achievable, realistic, timely) as a guide to create your own personal goals.
A risk management plan can help you identify possible risks or unexpected situations and how that can be prevented.
A marketing plan will help you find a point of difference that can attract your target market. You will need to look at market research, implement strategies and activities as well as budgeting. All these aspects combined will put you on a path to build a resilient and thriving business.
Registering your Business
Registering your business is a way of protecting your brand and your ideas. You will need to register through the Business Registration Services to avoid penalties and tax implications. The registrations required include:
• Australian Business Number (ABN), a unique 11-digit number used to identify your business to the government and community.
• Business name
• Tax registrations including a tax file number (TFN), Australian company number (ACN) as well as GST, PAYG withholdings, Payroll tax, fringe benefits tax (FBT) and others depending on your type of business.
• Licenses and permits dependant on your business activities
• A company if you have a company business structure. If you are a company director, you will need to apply for a director ID as well.
Managing your finances is key to determining how well your business is doing. When starting a business, managing your finance is crucial for the survival and success of start-ups. We recommend that you set up a business bank account so that you separate your personal finances from your business finances and use a bookkeeping or financial system such as MYOB, XERO etc. to help you manage your cash flow. By using these systems you’ll learn about invoicing and bank reconciliations to help maintain up to date records for your tax obligations.
Developing a pricing strategy should also be considered for all the costs used for production and services. You should also determine your pricing objectives and strategies to remain competitive in the market.
Meeting your tax obligations will help you avoid penalties. Your tax obligations are dependent on your structure. If you anticipate that you are going to earn more than $75,000 in turnover then you will need to register for GST, however you can choose voluntary registration before you reach that amount. In the case of a company, you also need to pay super guarantee contributions (SGC) for any eligible employee and directors, and lodge an annual return to the ASIC, aside from income tax return. The key to meeting your obligations for all structures is maintaining a good record keeping system whether manual or electronic.
Understanding your business legal obligations and meeting these standards is a way of protecting your business. Ensure that you comply with all tax obligations such as registering for ABN, TFN, GST and PAYG withholdings as well as fair trading laws enforced by the Australian Competition and Consumer Commission (ACCC).
If you decide to take part in a contract, make sure you clearly understand the terms and conditions before agreeing to it. Not complying with tax laws can be serious. The ATO have significant powers and can take money directly out of your bank account or direct your debtors to pay them instead of you. You can also receive criminal charges if you are found to be purposely non-compliant and that can even incur serving time in extreme situations.
Creating your Support Structure
At some point, you will need specialist support and expert advice to help setup your business and manage your finance. They will be more effective and pro-active if you have an ongoing relationship with them, so they can get to know you and your business and help you create the future you want. It is worthwhile to invest time to establish your professional support network with an accountant and a solicitor that you feel you can trust to help you grow your business.
Finding the Right Accountant
Helping keep your accounts and meet tax obligations are only the minimum an account can do. A good accountant will be your business advisor to help you in all aspects of managing your business, from setup to business plan, cash flow, marketing and pricing strategy, supply chain and production, sales and profitability, risk management and much more.
Talk to your accountant elect about all areas of your business to see how they can best help you. Remember too, that it is their role to give you the right advice and sometimes, it may not be what you like to hear. In that sense, don’t fall into the trap of appointing an adviser solely because you like them; they should be assessed on merits based on their professional experience and capability, not just their likeability.
How we can help?
Wilson and Assoc provides specialised services for startups with significant startup rebate and a comprehensive suite of business advisory services to help you navigate your business from setup through all phases. Have a chat with our friendly team and see how we can help.
About Wilson & Assoc
Wilson & Assoc Chartered Accountants provides taxation and business advisory services to individuals, investors and businesses wherever you are based. We provide specialist services to startups and health care providers.
If we can help in any way, we’d like to hear from you.
Disclcaimer: The information provided within this article is general information only. None of the comments in these notes are intended to be advice, whether legal, financial product or professional. You should obtain specific advice regarding your particular circumstances from a tax or legal professional.
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