Setting Up Your Business Right
It’s time. You’ve found the perfect opportunity, written your plan, and forecasted your financials for the next year. You’re finally ready to get your business up and running. But how?
This is the first of a seven-part series that provides an essential guide to setting up your online business. Each part will focus on a particular phase and provide expert guidance on how to approach every stage in order to establish a successful business.
For newcomers, starting a business always seems daunting. After all, it’s the start of a new chapter in your life and career, and there’s so much to think about. But good news - getting started is simple once you know what steps to take.
With your products and services confirmed, it’s time to establish your operations. Here’s what you need to do to lay the right foundation for your new business.
Register your business
First decide whether you’re actually running a business, or simply ramping up a hobby. As a hobbyist, you’re not held to the same reporting obligations that businesses are. However, when undertaking regular activity to turn a profit, it’s both essential and beneficial to register as an active business.
There are four business structures available to small businesses in Australia - sole trader, company, partnership, or trust. Each is treated differently by the legal system, offering unique benefits and restrictions concerning tax, personal liability, licensing, obligations as an employer, and even your ongoing costs and administrative requirements.
Identify your sources of income (and expenses)
This one’s a no-brainer, but you’d be surprised how often it gets lost in the commotion - particularly for businesses that start out as a hobby. Identifying your sources of capital and cashflow is a critical step for ensuring you can stay in business once you’ve started.
Will you invest your own money (remembering that your business may be a separate legal entity to yourself), or will you seek investors? Do you already have paying customers or a regular clientele? What assets do you need to purchase before you can begin trading? What expenses are you anticipating in your first financial year?
First, prepare a plan for your most likely scenario. Then build a contingency in case Plan A doesn’t work out.
Research your tax obligations
As a business, your tax obligations can vary depending on your business structure, the industry you serve, whether you have employees, how much you turn over, and whether you’ve registered for GST. These factors also determine the incentives, claims and deductions you may qualify for.
Take the time to thoroughly research the rules that apply to your business before you start. The penalties for not meeting your obligations can range from simple resolutions to lengthy, drawn out repayments - or even imprisonment.
Find an accountant that’s right for you
Unless you’re in the business of accounting, it’s typically worthwhile to delegate your finances and taxation to an expert. A good accountant is a valuable resource with whom you’re likely to have a lasting relationship, so it helps to start your journey with someone who suits the way you like to work.
Would your location make it difficult to regularly meet if you needed to schedule several meetings in a short period? Does their communication style and work ethic match yours? Will you prefer traditional accounting services, or would your business benefit from specialist support from tech-forward firms like mi-fi and Interactive Accounting?
Understanding the way you like to work, and the auxiliary factors involved in setting up and running your business, can go a long way to helping you find people you can trust - an important consideration when it comes to your livelihood.
Develop your branding
Your brand communicates your business’s personality, values and reputation. It can tell customers very quickly about the kind of business you run, the calibre of your offerings, and your attention to detail. Good branding is a simple yet essential part of doing business. And the more you grow and succeed, the more important your brand becomes in representing what you stand for.
Ensure your marketing and communication material always conveys who you are by getting your brand right early. Just a few basic rules for your logo, typography and stationery can see you through years of customer-facing marketing materials.
Our relationships are the drivers of success - but not every relationship will be suitable for you or your business, no matter how good the opportunity sounds.
Despite the conventional advice to ‘leave your baggage at the door’, even the most professional among us are still human. Research has shown that the stress of interpersonal conflict at work can have an adverse effect on our relationship at home too, compounding in undue strain that ultimately impacts productivity.
Be sure to choose business partners, colleagues and associates you can trust, who show sincerity and enthusiasm for the work. Most importantly, make sure you enjoy working with them - both your business and your health may depend on it.
Soak up knowledge
Ensure you’re mentally prepared for the adventure you’re embarking on, no matter what area of your business you’re looking after. From entrepreneurs to leaders, product designers to marketers, the experience of those who succeeded and failed before you will prove invaluable, especially in your first few years.
If reading a whole book has proven too challenging for your schedule, opt instead for magazines, blogs or newsletters that offer bite-sized education for busy people. Or find a buddy or mentor who can help you stay focused and keep your head in the game.
However you do it, expanding your knowledge of your industry and market, along with general good practice, will help you make better informed decisions as your business grows.
- Start your business - business.gov.au
- How to start a business - Xero Small Business Guides
- Ten tips on how to start your own business - FlyingSolo
Putting in the groundwork for these stages will give you a solid foundation for taking your business to the next level and ensuring stability for future growth. The next edition gives you guidance on the next phase — identifying the right providers for your business.