Before You Pull the Business Trigger
Over the years we have assisted numerous clients looking to start a business. In fact we are recognised as start-up specialists and along the way we have identified some of the key issues that every budding entrepreneur needs to address in the start-up phase. The press sometimes over simplify the issues but it may come as a surprise to learn that they extend way beyond your choice of business structure, accounting software selection and various business registrations.
Before you pull the trigger and establish 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 discount capital gains tax concessions. With accounting software the wrong choice can haunt you for years. There are so many programs on the market with features and price tags to match. While we have a preference for programs like Cashflow Manager, MYOB and Xero we need to assess your business needs level of accounting skill before we make a recommendation. Often we pick up a new client who has been using the same software since the introduction of GST in 2000 and they are still struggling to manage their basic bookkeeping. For years they have paid excessive accounting fees to fix their data files that resemble a computerised shoebox. Our mission includes helping you minimise the cost of compliance and the right software is a foundation stone in your business.
Of course, during the start-up phase there are simple things like GST, ABN and TFN registrations to complete. 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. If the business model isn't viable in that format we often help clients 'pivot' which could mean refining the product, expanding the target market or tweaking the pricing using some financial modelling software.
While starting or buying a business necessitates research, risk, passion and courage, 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 Business 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. Next, 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?’.
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 future.
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. Over the years we have developed a number of practical tools and checklists to help clients fast track through the start-up phase including our new Checklist for Starting A Business that you can download for free from Our Resources. We hope you find it useful.