Navigate Through the Business Start Up Maze
Over the years we have helped hundreds of clients negotiate their way through the business start-up maze. Experience tells us there are a number of key issues you need to address in the start-up phase and they extend way beyond your choice of business structure, accounting software and various business registrations.
Before you decide on your business structure (sole trader, partnership, trust, company etc.) you need to consider asset protection, the potential admission of new partners and your eligibility for the discount capital gains tax concession. With accounting software the wrong choice can be disastrous. There are so many options with price tags to match and while we have a preference for programs like Cashflow Manager, Xero and MYOB we need to assess your business needs level of accounting skill before we make a recommendation. It is not a ‘one size fits all’ approach and incredibly, we still pick up new clients who have been using the same software since the introduction of GST and for thirteen years they have struggled to cope and paid excessive accounting fees to fix their computerised shoebox records. Part of our client brief is to minimise the cost of compliance and the right software is so important.
Of course, during the start-up phase there are simple things like GST, ABN and TFN registrations to complete and if you are employing staff you also have to consider HR issues plus register for WorkCover and the Superannuation Guarantee. According to 2011 Doing Business Report by the World Bank, Australia is the second easiest place in the world to start a business with entrepreneurs needing only two days to get a business registered and operational. However, before you start the registration process you need to assess the viability of the business which necessitates the preparation of budgets, forecasts and cash flows. This might mean identifying your best and worst case scenarios and potentially canning the idea or possibly refining the product, prices or services.
Make no mistake, starting or buying a business necessitates research, risk, passion and courage but the most important ingredient is planning. Clearly, the old saying, ‘people don’t plan to fail, they just fail to plan’ still applies. It remains both valuable advice and a warning for people intending to start a business. A business plan that outlines the 'big picture' for your business usually incorporates a marketing plan and supporting financial projections. We often give clients our start up expense checklist to identify all their business start-up costs and they usually get a shock when they miss items like branding expenses, signage and website costs just to name a few. (You can download a copy of this checklist from the resources section of our website). From there we help them produce revenue estimates and financial forecasts based on a number of assumptions. During this phase we play devil’s advocate by constantly asking ‘what if?’.
Over the years we have developed a number of practical tools and checklists to help clients fast track through the start-up phase. These are very useful but courtesy of the GFC, technology and the internet, the business landscape in this country has changed. Websites are the 21st century business card and depending on your target market, social media could be your most important marketing channel. The harsh reality is that enthusiasm, money, hard work, talent or a great idea is not enough to guarantee success in business. You also need to have a marketing plan and blueprint for the business.
Unfortunately many people starting or buying a business fail because they don't seek or receive the right professional advice from the outset. We are very proud of our reputation as a business start-up specialist and financial aspects aside, we enjoy helping clients with their marketing, branding, slogan, logo, website, search engine optimisation and social media strategy. Our role is to support and guide you through the process and it starts with the right opening moves which includes the right advice.