There’s no doubt, starting a business is more ‘on trend’ than ever. People have lost jobs (or hours) due to the pandemic, the gig economy has kicked up a notch, people wanting greater freedoms around their work and entrepreneurship is becoming a key answer to 2022’s Great Resignation.
Having been in business for myself now for more than a decade, I can tell you there’s nothing like it. Of course, there are ups and downs in any business and well, then there was dealing with Covid – that was a challenge. But if it hadn’t been Covid, it would have been something else at some point; that’s just how starting a business (and then running it) is – never a dull moment.
You might be at the point where you have a great business idea – you’re so in love with the idea, you could quit your job now and start tomorrow. You’d need to invest considerably to get it all happening, but it’s definitely worth the money.
It can be so tempting to have an idea and just go for it – getting lost in designing websites, logos, business cards, services, products, and dreams of a successful future, etc. However, before you launch headlong into starting a business, you might want to consider the following;
1. Think hard
Before you commit anything more than a day or so of your time, ask yourself the following questions:
- Who are you going to sell your product/services to? If your answer is everyone, it’s the wrong answer. You need to think through your ideal customer.
- How long (really) will it take you to a: make a sale and b: make money (and no, they’re not the same thing).
- Who is going to sell your product? You or will you hire someone?
- How will you sustain yourself until the business is making money (a personal and a business budget is key here)
- Will your business be able to sustain itself (and you/your staff) in a poor economy? What about if you get sick?
- How much are you willing to risk starting a business. For example, if you have a mortgage – are you willing to risk your home – either through not having enough in earnings to pay the mortgage or you set up as a sole trader and the business is sued for damages, your personal assets including your home can be used as part of the settlement.
2. Seek legal counsel
One of the common errors those new to starting a business tend to make is assuming that legal counsel is only for when you get into trouble. However, this isn’t necessarily true as proactive legal preparation is sometimes the best way to set your business on the path to long-term success (and avoid any legal nasties happening in the first place).
You’ll absolutely need to seek legal assistance if you’re;
- hiring staff for hiring agreements,
- putting up a website (privacy policies are mandatory now) and
- especially if you’re thinking of starting a service business, you’re more than likely to need a terms and conditions agreement for your business, NDAs (non-disclosure agreements), and possibly licence agreements too.
Thinking of these things as an investment in the future of your business.
Having legal counsel on call can also be incredibly useful if you’re needing to enforce copyright or patent protections or you’re ever threatened by big international behemoths wanting to close your business down for a ‘perceived’ intellectual property breach as we’ve seen in the news over the last five or so years.
3. Talk to an accountant
When you’re starting a business, there can be a thousand things to do. And let’s face it, ‘unsexy’ accounting is often relegated to the bottom of the list. However, as many a business client has told me over the years, getting the right structure and setups in place from the get-go has made a huge difference both in protections and in sanity savings.
The right business structure can protect your (and your partner/family’s) assets if push ever comes to shove. And getting your book-keeping set up on the cloud, with automatic bank feeds in something like Xero can save you hours and hours of time (you won’t likely have once things really kick off) doing reconciliations, prepping for BAS and business tax returns – all of which come around with startling regularity.
Plus having an accountant is like having an experienced sherpa with you on your business trek. They know the path well and generally keep a watchful eye on the horizon for things that might trip you up – changes to superannuation, taxation, special payments, trusts, etc. We spoke to our clients every time the rules changed during Covid; let’s just say, we spoke to them a LOT. Plus, if you’re not sure about how something might affect your business, you can always run it past your accountant for an independent opinion.
Doing the essential planning beforehand to ensure your business has the best start possible can and will make a lot of difference. And that’s where we can help. If you’re thinking of starting a business or taking your business to the next level or thinking now might be the time to change b business structures, we’d love to chat. You can call us on 02 6032 1700.