You are sick of working for someone; sick of helping them make money while you struggle. Or you are at home looking after the kids and should really return to work, but don’t want to or can’t. So you decided to start a business, after all it should be easy, shouldn’t cost too much and you should be able to make a fortune, right?
Starting a business can be something that you naturally fall into or it can be done for the above reasons, but before you start your business it is advisable to do some research first and set your intent to be professional at all times. Work out what is involved in running a business; invest time in planning to turn your dreams into reality.
Important Questions to Ask
It is important to really understand what is involved in running a business and how to go about starting it. So before starting sit down and have a planning day, ask yourself the following questions:
- What do I need before starting a business?
- What type of business should I start?
- How do I choose a business name?
- What skills do I need to start a business?
- What are my business goals, objectives and skills?
- How much income will my business need to generate?
- What are the advantages and disadvantages of starting my own business?
- Do I know where to find advice and support?
- Do I know what events, networks and seminars are happening near me?
- Do I need a business plan? If so how do I do one?
- Do I need a marketing plan? If so how do I do one?
- Do I need finance? Do I know how to obtain it?
Do you have a hobby or a business?
A lot of people start their businesses based around an activity they enjoy doing as a hobby. It is important to understand the differences between a hobby and a business for tax, insurance and legal purposes. Generally, a hobby is a pastime or leisure activity conducted in your spare time for recreation or pleasure.
Some key questions to consider when you are establishing your status as a hobby or business are:
- Is the activity that you will be undertaking, for commercial reasons?
- Is your main intention, purpose or prospect to make a profit?
- Will you regularly and repeatedly undertake your activity?
- Will your activity be planned, organized and carried out in a business-like manner?
If you answered yes to most of these questions, you are likely to be going to run a business.
Before you start
You don’t necessarily have to pay someone to start your business, but if you have an Accountant, I would suggest that you at least go and see them and make sure you are setting things up correctly. You don’t want to set things up and then go to him at the end of the financial year to only discover that you should have done things differently.
Some things to talk to your Accountant about, or at least consider when starting out:
- Do you know which business structure suits your business?
- Have you considered starting as on independent contractor?
- Do you need to register for GST or not? What are the advantages or disadvantages?
- Do you have adequate protection for your intellectual property?
- Are you considering running a home-based property?
- Do you understand your taxation obligations?
- Do you understand your legal requirements?
- Are you aware of standards and codes of practice?
- What record keeping and accounting systems do you need?
- Will you need to employ people?
Lets get started
Following are the steps you need to take after consulting your Accountant.
- Choose your business structure
- Apply for your Australian Business Number (ABN)
- Register your business name and trade mark
- Register your website domain name
- Organize taxes for your business
- Organize registrations and licenses for your business
- Register for an Australian Business Account to manage your licenses and permits
- Buy or lease premises for your business (if required)
- Arrange insurance for your business
Most businesses fail to do the above steps, but if you take the time to do them, your new business venture will be well on its way to succeeding.
Please remember, if you have a question for me, go to the ASK page of my website and you will be instructed how to ask me a question.
