Start Ups! Here’s what not to forget.

When you are thinking about starting a new business it is easy to get caught up in the excitement of starting something new and let the administrative side of things slip. We know it’s painful – but it really is important that you get this stuff right at the outset. Getting things wrong could slow you down and cost you money in the long run.

Here is a quick checklist of administrative things to think about. You may not have to do everything on this list – but you should at least give it careful consideration.

Have a business plan.
We aren’t talking about a 20-page door stopper. What you need is a one or two page plan that summarises the purpose and direction of your business, your key objectives and initial plans to achieve those objectives. Without this it is going to be very difficult to make sensible decisions as you move forward.
Check out our series of videos on how to create a simple business plan.

Make sure you have sufficient finance.
One thing your business plan should clarify quickly is whether or not you have enough money to survive and grow. If you don’t have the cash in the bank, then you need to give some careful thought to where the funds will come from. Review our Finance FAQ’s and talk to your accountant, friends, family or bank manager before moving forward.

Choose the right business structure.
Too many businesses get started with the wrong business structure and their affairs get tangled down the track. It’s worth taking some time to consider whether you will operate as a sole trader, partnership, trust or company. This article summarises the four main structures, and we suggest that you speak to your accountant before you make your final decision.

Register your business name or company.
Unless you are trading under your own name, you will need to register a business name with ASIC. If you plan to operate under a company structure and will be operating under the same name as your registered company name, then you don’t need to apply separately for a business name. Review the ASIC site, which provides detailed advice, before you register online.

Apply for an Australian Business Number (ABN).
An ABN is an 11 digit number that identifies your business to the government and the community. If your turnover is less than $75,000 and you don’t need to register for GST, it is not mandatory to have an ABN. But without one other businesses that deal with your are legally bound to withhold 47% tax from any payments they make to your business. You can apply online.

Register for a Tax File Number.
If you are operating as a sole trader then you can use your personal tax file number. For any other business structure you will need to apply for a new tax file number for your business. You can apply online or by post. Your accountant should be able to help you with this.

Register for GST.
If you expect your new business to turnover $75,000 per year or more than you are required by law to register for GST.  If you do not register for GST then you won’t include GST in your fees, and you also won’t be able to claim GST tax credits for your business purchases. Register for GST with the ATO.

Apply for a trademark.
There is no obligation for you to register your company name or logo as a trademark. However, if you are starting up something you think is going to be huge, it’s worth considering. A registered trademark will protect your intellectual property and make it harder for your competitors to steal from your success. You can register a trademark online.

Make sure you have enough insurance.
The last thing most start up want to think about is insurance. But depending on the nature of your business it may be critical, not only financially but operationally. Potential clients may well want to know if you have sufficient public liability or professional indemnity insurance before they start doing business with you. Review our business insurance checklist and make sure you’ve got the big risks covered.

Have an accounting system in place.
You really don’t want to start running your new business out of a shoebox. Whether you are opening a part time market stall or a major technology start up, you need a system for keeping track of the money. The main accounting software providers all have a wide variety of options, so you are bound to find something that suits your endeavor. Check out MYOB,  Quickbooks and Xero.

Get advice.
This may be the last item on the checklist, but it’s possibly the most important. Don’t go it alone. Seek out as much advice as you can. The government offers a number of free or low cost resources for small businesses. We also strongly recommend that you engage an accountant and involve them in these early decisions.