Starting A New Business? p. 2
Welcome to the second and last instalment of our Starting a Business series. In the fist part, Bendigo Bank Manager, Chloe Heath, discussed the importance of a support structure and the differentiation between a hobby or business.
If you want to learn more, come to our Business Basics Workshop on Saturday the 20th of May at 10am. This workshop will be run by Chloe Heath of Bendigo Bank and is specifically catered for people in the creative space, including how and when to set-up a business or ABN, banking and sources of funding. Check out causeastir.eventbrite.com.au to get your ticket now. This workshop is free and only for Stir participants (past and present). If you haven’t already, head to www.causeastir.com.au and upload your creative project now so you don’t miss out.
3. You’re In Business? Time To Plan.
Ask yourself what you want your business to look like and how you want to run it, because it is time to create your business plan.
A business plan will usually include things like an introduction to your business, market analysis, intellectual property (IP) strategy, operations plan, management plan and a financial plan (i.e. costs and cash flow projections).
Your business plan will generally feature a marketing plan too. This is where you develop a systematic approach to developing your products and services that best satisfy your customers’ needs.
Remember, everyone wants your small business to succeed, so consult your support structure again and you’ll find some great templates and resources at business.gov.au.
4. This Plan May Require Funding…
Good financial management is critical to the ongoing success of your business. When starting out, you’ll need to know how much funding you need, where you can get it and how to manage your financial arrangements. Your business plan is also an important part of seeking business funding.
There are various sources to consider when looking to fund your business:
Loans from your local Bendigo Bank branch;
Borrowed money from friends and family;
Crowd sourcing, or
A grant from Canberra’s best Crowd-voted Grants for Creative Projects program, Stir!
If you are unsure of the best way forward, it is time to consult an accountant or solicitor.
5. It’s Your Business, So Choose Your Business Structure.
Each structure will have their own advantages and disadvantages, so you will need to do a bit of research into the four main business structures used in Australia before you make an informed decision.
Some structures will affect your personal assets, others with alter tax obligations, even the way ownership is changed can change with each structure.
The low down;
A sole trader is a type of structure where the business has no separate legal existence from its owner. As a sole trader, you’ll be responsible for the liabilities of your business. You need to report your business income on your personal income tax return, along with any other income.
A partnership is a type of structure where two or more people start a business and can legally share profits, risks and losses according to terms set out in a partnership agreement. You must lodge a separate partnership income tax return.
A trust is a relationship where a business is transferred to a third party who has legal control and has a duty to run that business to benefit someone else. You must lodge a separate trust income tax return.
A company is a legal entity separate from its members (shareholders). A director of a company has additional legal and reporting obligations. You must lodge a separate company income tax return.
Structure will determine how you move forward and what obligations must be met to register your business, so it’s important to think about your plan and seek advice where appropriate.
Remember, time spent planning is never wasted.
Everyone’s passion and business is different and it may take some time to find what works best for you, what structure works and who you are going to be. Planning is crucial and these 5 things are just the beginning and a great way to start.
Remember to have a go and follow that passion because you’ll never know if you never try.