Starting a new business can be equal parts exciting and daunting. The biggest question of all is – will it work? We chat with Ultimate Tax & Advisory Director Bobby Serval about some important things to consider before starting a business.
Working out the demand
The biggest factor of all for a new business is determining if there is demand, says Bobby.
“While we might all have had daydreams about quitting our 9-5 jobs at some point to run a business doing something you love, there is little point if there is no demand for the product or service you want to sell,” he said.
“Having a clear market and competitor analysis, as well as looking at industry trends and your target audience are important. Businesses shouldn’t start on whim, but with a clear plan and strategy. You can use a variety of sources to get this information such as social media, networking, local government and census surveys.”
Owner skills and set up costs
Setting up a business can take time and funds to establish, build contacts and get marketing materials.
“Business owners need to be clear about all the costs involved in starting this particular business, along with the skills needed to get off the ground,” Bobby said.
“Marketing, advertising, HR and administration are areas that are overlooked, both in terms of time and cost and you may need to outsource these to ensure best practices are being followed. We have seen business owners who are experts in their field but have been unsuccessful in business because they don’t have these skills, or are not willing to outsource them.
“Cashflow also plays a role in starting a business as it can take some time for income to flow into the business. You should consider all your set up costs including insurances, licenses, training, fit out and marketing materials, as well as projected income for the first 12 months.”
Choosing the right business structure
A key consideration to your business set up is the structure you will use.
“Choosing the right entity structure from the beginning will relieve you from any unnecessary headaches later,” Bobby said.
“Some options include operating as a sole trader, becoming a company, or operating under a trust. Each of these entity types have pros and cons and need to be considered carefully. It can be costly to change the entity setup so it is best to get it right from the start.”
Tax, insurance and registrations
Your business will need to consider if it will be, or needs to be for certain industries, registered for Goods and Services Tax (GST).
“Insurance for your business is a consideration, along with making sure you comply with all the relevant licenses and approvals needed for your industry,” Bobby said.
“We are always cheering and supporting small businesses and with expert guidance and advice, businesses can thrive to contribute to the economy, create jobs and cement a great future for your family.”
You can read the full Ultimate Start-Up Guide here for more tips on starting a business. If you would like us to assist you with starting a new business contact us on office@ultimate-tax.com.au or call 61443370 to see how we can help.
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