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Overview the list of checklist for business starters: -
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Feasibility Study
Conduct research to determine the viability of the business concept. Assess your health, personality and experience to determine if you have what is needed to succeed.
Beware of thinking of business as an except from present problems.
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Licences & Permits
There are literally hundreds of different businesses which require a license or permit.
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Business Planning
Find out if the business will provide an adequate financial return. Develop cash flow analysis on spreadsheets (available from ASA) break even calculations and forward budgets.
Complete a business plan - various publications to assist are available from ASA, Commonwealth Government book store and banks.
Note: The better your plan, the more chance of success.
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Finance & Funding
After completing the business plan and cash flow etc, review all finance sources to determine best arrangement. It may be possible to preserve one's capital and borrow sufficient funds.
Beware of carelessness when funds are readily available - "a fool and his money are soon parted".
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Business Structure
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Sole Trader - Easiest to start. Owner liable for debts.
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Partnerships - A Partnership Agreement is strongly recommended. Partners liable for debts.
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Proprietor Ltd Company - One, two or multiple shareholders but more expensive to set up and maintain. Protection from personal liability with this structure. Accountancy / Legal advice needed here. Most common procedure is to acquire a Shelf Company (ref Shelf Company Services in yellow pages) at an approximate cost of AUD1,500.
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Trusts - A useful tool in business and estate planning. Cost usually in the vicinity of AUD500 to set up.
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Location & Premises
Location is extremely important for most businesses. Many aspects to consider here include parking, visibility and competition.
Note: Floor traffic is fundamental to success.
Leases - Poor lease can be the cause of business failure. Don't leave it to chance. Take professional advice and make sure the lease will permit long term viable operation of your business.
Check with your Local Council re Health Department requirements, plans for roads and any other work or by laws which may impact on the location of the business.
There are by-laws impacting on business, particularly a home based business. Capital Gains Tax may be payable on the disposal of your home - check with the Australian Tax Office or your Accountant.
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Registration of Business Name
Registration of a business name is only required by law if you use a name other than your own name. John and Mary Brown or J and M Brown are quite lawful. If you use Brown's Cleaning Services (usually for marketing reasons), it must be registered.
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Income Tax / State Tax / Duty
Taxation is a complex area requiring expert knowledge.
Small business owners must observe the various Federal and State laws.
These include income tax: -
- Personal and company,
- Capital gains,
- Fringe benefits,
- Sales,
- Rental,
- Business duty,
- Stamp duty,
- Artists' royalties.
Books and records are best maintained daily, and must be preserved for 5 years. Tax payments must be made promptly.
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Insurance
An essential part of commerce. Based on the principle of the utmost good faith, premiums are related to the risks as seen by the insurer.
There are two types of insurance: -
- Life insurance,
- General insurance.
Any business could need up to 22 different 'policies'. Every business owner should insure their life, income and commercial risks. Workers' compensation insurance is compulsory for all employees including company directors.
Insurance Brokers usually provide a border range of services to businesses. Monthly premiums can sometimes be negotiated.
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Employees
By carefully selecting staff, the likelihood of legal action for unfair dismissal can be minimised.
Provide a written job description before employees start work and make sure that employees understand what you expect in the workplace. This should be in writing.
Obtain information from: -
- Department of Productivity & Labour Relations,
- Department of Occupational Health, Safety & Welfare,
regarding hours, holidays, leave, superannuation and safety.
If purchasing a business, beware of ongoing liabilities. For example, long service leave and check on training requirements.
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Business Documentation
Business transactions normally require the use of special forms such as: -
- Invoices,
- Statements,
- Receipts,
- Quotations,
- Pretty cash,
- Wages book,
- Pay slips, and
- Credit notes.
If may be prudent to purchase small quantities of forms from stationers or secretarial services before committing to expensive printing. Computerisation may be a worthwhile option.
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Budgeting & Finance Control
Monthly and annual budgets are essential for any business. A graph of sales or turnover is a great aid for motivation and focuses management thinking. Also consider need for security of cash and documents / records including cash register and night safe facilities.
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Marketing & Advertising
Marketing is the engine that pushes the business forward. Every business requires a marketing plan to ensure that advertising cost bring maximum exposure for the business. Use the data gained from your market research to plan your strategy and budget well in advance.
Business cards, brochures, vehicles and buildings, testimonials, referrals, radio, newspaper and public relations, trade show, in-house client nights, sales people, telemarketing, sponsorship, direct mail, mail order are all commonly used form of advertising.
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Credit & Debt Collection
"Until you are paid no sale is made"
Any sales not paid for on the sport are credit sales. Your invoice should clearly state your "terms of trade" e.g. C.O.D., 7 days, 30 days etc. Failure to do so makes debt collection difficult. Should you wish to impose a charge for late payment the specific terms must be made known PRIOR to a contract being entered into.
Credit card service is almost essential today. Contact your bank for information.
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Technology & Communications
Business is very dependent on technology - don't be afraid of it.
Mobile phones, pagers, answering machines, cordless phones and two-way radios all play an important role. Computer facsimiles, photocopiers, security alarms all need careful though. You may need to consider after hours phone answering, messages while on "hold", phone conferencing facilities or even car based facsimiles and laptop computers.
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Legal Aspects
Most businesses have some form of legal agreements.
These could include a: -
- Lease,
- Franchise agreement,
- Finance agreement,
- Disclaimer,
- Confidentiality agreement,
- an Agency agreement, or
- Supply agreement.
It is simply "smart business" to take appropriate professional advice.
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Franchising
This way of starting a business has much to recommend it but there can be some serious pitfalls. Contact the Small Business Development Corporation (SBDC) for information and guidance from our specialist who can help you evaluate a franchising opportunity before making any binding commitment.
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