Starting Your Own Business Kit - Generic by Swellpeter


									                     The Serious Business
                      Owner’s Guide to

    Starting Your Own

                 Business Kit


Starting Your Own Business                  1
Business Kit
                             Starting Your
                             Own Business

                                     Business Kit
               The Guide to starting your own business containing
            how to and where to begin in setting up your own business.
                   This Business Kit is generic for all businesses.
            Soon to be released - Business Kit specific for your Industry.

By Peter Adams

Notice: This book is licensed to the individual reader only. Duplication or distribution
via email, electronic media, network or storage media devices, print out or other
means to other persons other than the original purchaser is a violation of
international copyright law.

@ Copyright 2011 Adams Concepts Pty Ltd. All rights reserved. No part of this book
maybe reproduced in any form, by any means (including, electronic, photocopying,
recording or otherwise) without the prior written permission of the author.

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Business Kit
Introduction                                                4

1. Researching your Business Idea                           5

2. Choosing a Business Structure and Naming Your Business   7
       Sole Trader
       Pty Ltd Company
       Setting up your structure
       Naming Your Business
       Registering your Business Name

3. Regulatory Requirements of Starting a Business           8

4. Finding the Right Premises                               9
        Home vs Premises?
        Location, Location, Location
        Leasing premises

5. Insurance                                                9
        Business Insurance
        Workers Compensation

6. Financial Records/Accounts                               10

7. Employing Staff                                          10
       Organisation Chart
       Finding Good Staff
       Finding a Good Bookkeeper
       Paying the right amount to your staff

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You have a brilliant idea or product that you believe will work. Congratulations. Now
is the time to get started in establishing a business for this idea or product.
Establishing a small business requires careful planning, finance, research and action.

This book is designed primarily for businesses starting up in Australia. The concept
will apply worldwide, however, you will need to check with your regulatory bodies
for your country.

It’s most crucial you get the basics right before you start.

                   “If you fail to plan, then you plan to fail”.

Did you know that over 80% of small businesses fail within the first five years due to
lack of planning. This quotation is so true. Take a look at your local shopping centres,
office spaces and local businesses. How many shops and offices do you see that are
vacant? How many businesses do you see that have been in the same place for
greater than five years? These businesses that are still operating after 5 years have
carefully planned and continue to plan. Some businesses will plan for the first year
and forgot to plan thereafter thinking that they have total control. However, there
are so many external factors that impact small businesses.
You do not have to be one of these statistics. Let’s get our thinking hats on and let’s
work on your idea or product.

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Business Kit
Chapter 1 - Researching your idea/product and develop a business plan
Before starting a business, you need to answer the following fundamental questions.
  •  Is your business idea/product viable?
  •  Is there a market for your product/service?
  •  Define your market market?
  •  How will you get your product/idea to your customers?
  •  Who are your competitors? Clearly identify your customer or perhaps you may
     have different groups of customers.
  • Do you have the financial capacity to get the business up and running?
These questions will be answered once you begin to research the market into which
you wish to enter and when you set about establishing a business plan. However,
these are just some of the questions that you need to consider.
Researching your market
Now that you have determined the product/idea, you need to be sure there’s a
market for it — and that you can reach the right target audience too.
Take a good, long look at the market you wish to enter. In the long run, this research
will also help you to evaluate the best forms of marketing for your business.
Define your customer? Some characteristics to look for when defining your customer
are age, gender, nationality, etc. There are so many more characteristics.
Research and look at the following:
  1. Competitors.
  Examing your competitors will be vital for ensuring the
  success of your business using a Competitor Analysis
  worksheet (ask us for more details). Find out:
      •   Who your direct competitors are?
      •   How successful are they and why?
      •   What are their strengths and weaknesses?
      •   What marketing do they undertake?

  2. Reports and statistics.
  Look for information in market reports, government statistics, journals and
  industry association publications.
Once you’ve conducted this initial research and ensured your business idea is
feasible, it’s time to formulate a business plan.

Establishing a Business Plan
What is a Business Plan? A business plan is a formal statement of a set of business
goals, the reasons why they are believed attainable, and the plan for reaching those
goals. It may also contain background information about the organization or team
attempting to reach those goals.

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Business Kit
Business plans may also target changes in perception and branding by the customer,
client, tax-payer, or larger community. When the existing business is to assume a
major change or when planning a new venture - a 3 to 5 year business plan is
required since investors will look for their annual return in the 3 to 5 year time.

It initially defines what you are trying to accomplish by defining the type of business
you have and what you plan to do with your business. You begin by mapping out
your goals, one by one, and then you come up with different routes to take to meet
your goals. The small business plan essentially will have the same features as an
individual applicant’s resume. It’s an overview of the objective, goals, and
skills/duties that the company is capable of performing.

Small business plans also are useful to help track the income and cost of a company.
If you strategically map out how much your company is going to bring in, estimated
value of course, then you will be able to determine how much you can spend on
certain aspects of the company without going bankrupt. This includes determining
how many people you will need or want on your staff, and the amount of product
materials you can have in stock that you expect to sell. This is figured out by tracking
the supply and demand on your business plan as well.

A business plan is essential for any business, no matter its size. Without a Business
Plan, you plan to fail. Apart from preparing this Business Plan coupled with a
Marketing Plan, it is essential to review your actual result against the plan to see if
you are on track.
Generally a business plan should cover the following:
  •   your business goals
  •   marketing initiatives
  •   industry research
  •   operations/management plan
  •   financial plan

Remember, your business plan should be an ongoing initiative which is reviewed
regularly. It is most important to review your business plan on a regular basis to
ensure that you are heading down the right track. It’s the blue-print for getting
things right.
I like to prepare two Business Plans. My first Business Plan is based upon what I
believe that I can generally achieve within the business. My second Business Plan
looks at what happens if our business model shown in the first business plan goes off
track i.e not as good as planned.
Once the first Business Plan has been established, we are ready to start formulating
goals and an action plan. Define your goals (they should have already been defined
in the business plan) and construct an action plan on how you will achieve these
goals. Your goals should be visualised daily by yourself.

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Business Kit
Typical goal setting strategies.
See the back of this publication if you would like further details on Business Plans.
Establishing a Marketing Plan
Following on from the ideas raised in your business plan, you should put together a
carefully thought out marketing plan. There’s no
point having a great product or service if it isn’t
going to reach your target market.
Whether you want to build a brand or simply
advertise your services, there are lots of initiatives
you can take. You might not have the biggest
marketing budget, but don’t let that stop you from
being creative with your marketing plans.
Your marketing plan needs to answer the question: why am I in business, what do
customers want and why will customers buy from me and not my competitors?
A good marketing plan sets clear, realistic and measurable objectives, includes
deadlines, provides a budget and allocates responsibilities.

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Make sure your marketing plan covers:
  •   analysis of your current market
  •   your business objectives
  •   key strategies
  •   steps to achieving your objectives
  •   proposed budget
  •   implementation plan

Obtaining finance
Ensure that you have the right amount of money to start up your business plus allow
for additional money for working capital. Having finance is crucial for the ongoing
success of your business. Your business plan should cover your financial
requirements for start-up plus initial working capital. Ensure that the financial aspect
of your business plan allows for peaks and troughs within your business cycle.
Be sure to contact your local banking or financial institution for finance options.
Consider other sources of finance too. For the best advice, consult a business advisor
and accountant — and have a solicitor look over any loan contract.

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Business Kit
Chapter 2 - Choosing a business structure

There are several different types of business structures that you can operate under.
   1. Sole trader: a type of set-up whereby the business has no separate legal
      existence from its owner. You can use a business name or your own name
      and as a sole trader you are responsible for the liabilities of your business.
      The advantages for this type of structure is ideal if the business is not
      complicated, especially if it does not require a great deal of
      outside capital.
      - There isn't much paperwork in establishing this type of structure.
      - You may not have to register the business name (see above).
      - There are less stringent reporting obligations compared with other
      - You may be able to deduct tax losses from personal income.
      - You are entitled to profits and the ownership of assets.
      - It's relatively straightforward to wind up.
      The disadvantages for this type of structure are that you are personally liable
      for all debts.
      - Personal property may be vulnerable for debts and other business liabilities.
      - Large sums of capital are less likely to be available to a sole trader, and you
      may have to rely more on overdrafts
      and personal savings.
      - You may require enormous investments of time without the normal
      employee recreation leave and other benefits.
      - There may be issues of continuity of business in the event of death or illness

   2. Partnership: unlike a sole trader, a partnership involves two or more people
      starting a business. All partners legally share profits, risks and losses
      according to the partnership contract (which is established at the onset of the

       Partnerships come in two varieties: general partnerships and limited
       partnerships. In a general partnership, the partners manage the company and
       assume responsibility for the partnership's debts and other obligations. A
       limited partnership has both general and limited partners. The general
       partners own and operate the business and assume liability for the
       partnership, while the limited partners serve as investors only; they have no
       control over the company and are not subject to the same liabilities as the
       general partners.

       Personal liability is a major concern if you use a general partnership to
       structure your business. Like sole proprietors, general partners are personally
       liable for the partnership's obligations and debts. Each general partner can
       act on behalf of the partnership, take out loans and make decisions that will
       affect and be binding on all the partners (if the partnership agreement

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      permits). Keep in mind that partnerships are also more expensive to establish
      than sole proprietorships because they require more legal and accounting
      If you decide to organize your business as a partnership, be sure you draft a
      partnership agreement that details how business decisions are made, how
      disputes are resolved and how to handle a buyout. You'll be glad you have
      this agreement if for some reason you run into difficulties with one of the
      partners or if someone wants out of the arrangement.
      The agreement should address the purpose of the business and the authority
      and responsibility of each partner. It's a good idea to consult an attorney
      experienced with small businesses for help in drafting the agreement. Here
      are some other issues you'll want the agreement to address:

      •   How will the ownership interest be shared? It's not necessary, for
          example, for two owners to equally share ownership and authority.
          However, if you decide to do it, make sure the proportion is stated clearly
          in the agreement.
      •   How will decisions be made? It's a good idea to establish voting rights in
          case a major disagreement arises. When just two partners own the
          business 50-50, there's the possibility of a deadlock. To avoid this, some
          businesses provide in advance for a third partner, a trusted associate who
          may own only 1 percent of the business but whose vote can break a tie.
      •   When one partner withdraws, how will the purchase price be
          determined? One possibility is to agree on a neutral third party, such as
          your banker or accountant, to find an appraiser to determine the price of
          the partnership interest.
      •   If a partner withdraws from the partnership, when will the money be
          paid? Depending on the partnership agreement, you can agree that the
          money be paid over three, five or 10 years, with interest. You don't want
          to be hit with a cash-flow crisis if the entire price has to be paid on the
          spot on one lump sum.

   3. Company (Pty Ltd): a proprietary limited company is the most common type
      of company used by small business. Unlike partnerships and sole traders, it
      has more regulatory requirements and is a legal entity separate from its
      Unlike operating as a sole trader, many more regulations come with
      operating a company and understanding your rights and responsibilities
      when forming and running a company is crucial.
      The type of company structure you choose will depend on the type of
      business you run, your financial situation, individual circumstances and the
      level of control needed to operate the business.

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      For example, if a business is likely to need a large capital base, easy transfer
      of share ownership, the ability to borrow from the public and to possibly list
      on the stock exchange, then a public company would be the appropriate
      However, many small businesses are unlikely to require these abilities and
      are more inclined to set up a company structure that can be used for family
      tax planning while providing restricted liability and enough flexibility to run
      the business effectively. Then the appropriate form would be a proprietary
      A proprietary company may also be the preferred structure for small
      businesses owners over a partnership, depending on individual
      circumstances. For instance, a proprietary limited company allows for up to
      50-non employee shareholders, essentially potential investors, while a
      partnership is restricted to 20 members.
      A proprietary limited company is the most common type of company used by
      small business. Here we look at what to consider when setting up a
      proprietary limited company.
      What is a proprietary limited company?
      A company has a separate legal existence, distinct from its owners, managers,
      operators, etc. It also has its own income tax liability, separate to your
      personal income tax.
      Effectively, a company has the powers of an individual and can:
        • Own and dispose of property and other assets
        • Enter into contracts
        • Sue and be sued.
      There are two types of companies, proprietary and public. Under the
      governing Corporations Act, a proprietary company must either be:
          • Limited by shares: In this case, shareholders are afforded more
            protection when it comes to the level of liability they face for company
            debts. Generally speaking, this is the set-up most preferred by small
            businesses; or
        • An unlimited company that has a share capital. Here, shareholders face
            unlimited liability.
      The proprietary company must have at least one shareholder and no more
      than 50 non-employee shareholders. Unlike a public company, a proprietary
      company can not sell shares to the public, however, it can offer its shares to:
      •       Existing shareholders of the company; or
      •       Employees of the company or a subsidiary of the company.

      If a proprietary company does not meet these criteria, the Australian
      Securities and Investments Commission (ASIC) may require it to convert to a
      public company.

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      A proprietary company must have at least one director who must live in
      Australia. On the other hand, a public company must have at least three
      directors and of these, at least two directors must ordinarily live in Australia.
      The proprietary company must also have an appointed secretary. The
      company secretary, like the directors, must be at least 18 to hold such a
      position. One person may hold both positions of company director and
      The company secretary is an officer of the company and as such may be
      subject to requirements under the Corporations Act. He/she has specific
      responsibilities, including making sure the company notifies ASIC about
      changes to the identities, names and addresses of the company's directors
      and secretaries and that the company lodges its annual return.
      A director is also bound by certain responsibilities under the Corporations
      Act. This is covered in greater detail further on.
      Proprietary companies are also classified as large or small. A company is
      classified as small only if it meets at least two of the following criteria:
        •   Gross operating revenue of less than $10 million for the financial year
        •   Assets of less than $5 million at the end of a financial year
        •   Fewer than 50 employees at the end of a financial year.

      Most large proprietary companies have to lodge audited accounts. Small
      proprietary companies only have to prepare audited financial statements if
      ordered to do so by ASIC or members holding five percent of voting shares
      and in some cases if controlled by a foreign company.
      A proprietary company is often the preferred option for small businesses, not
      only because of the liability issues, but also because of the tax advantages a
      company set-up can provide. For instance, a company is a legal entity with its
      own income tax liability separate from your personal income tax and as such
      the company is currently taxed at 30 percent.
      What are the advantages and disadvantages of setting up a proprietary
      limited company?
      As with any business structure, there are certain advantages and
      disadvantages and the benefits of a proprietary limited set-up will depend on
      your individual circumstances.
      Advantages can include:
        •   The liability of shareholders is limited to the share capital they have
            subscribed and any debts which they may have personally guaranteed.
        •   Shareholders and directors can be employed by the company under
            normal salary and wage conditions and their income taxed at personal
        •   Shareholder's personal assets are not under threat if the company
            incurs financial loss and debts.

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         Company taxation is at a fixed rate. A company's income tax is calculated as a
         percentage of the taxable income earned by the company during the financial
         year. The current rate is 30 percent.
         Compared with other business structures, the transfer of company ownership
         can be relatively simple. The company does not have to be wound up in the
         event of the death, disability or retirement of any on the persons involved.
         Disadvantages can include:
             •   Forming a proprietary company can be a complicated task and with
                 the level of legal paperwork required, can take up to six weeks.
             •   There are greater regulations to adhere to under the Corporations Act
                 and through the Australian Securities and Investment Commission.
             •   Increased record-keeping is required.

      4. Company Ltd: You will need to seek professional advice for this structure.
         This structure offers the public to purchase shares into your business. This
         structure is more regulated.

                         There are further structures available.
                     In order to choose the right business structure,
                      it's best to seek legal and professional advice
                             before making a final decision.
Setting up Your Structure
Companies need to register a company name and Australian Company Number
through the Australian Securities and Investments Commission (ASIC).
According to ASIC, when a company is registered under the Corporations Act 2001 it
is automatically registered as an Australian company. This means that it can conduct
business throughout Australia without needing to register in individual State and
Territory jurisdictions.
Naming Your Business
After deciding upon the structure for your business, you will need to decide upon the
name for your business as this could have big impact on its future. So take the
necessary amount of time — and steps, to get it right.
When choosing a name, consider the following:
  •     Competitors. Look at what your competitors have named their businesses and
        try to set your business apart.
  •     Business goals. What do you want to achieve with a name?
  •     Market/customer appeal. Choose a name that’s easily remembered — and
        one that’s easy to spell and pronounce too

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  •   Branding and marketing. Will the name work in the marketing and branding
      initiatives you have set out in your business plan?

Check with the Australian Securities and Investment Commissions National Names
Index to see whether your chosen name has already been registered. Once you’ve
decided on a name, do not forget to register it with the proper channels (see below
for how to register a business name). You should also ensure that your chosen
business name does not conflict with any registered trade marks. This can be done
through IP Australia.
Registering Your Business Name
You are required to register your business name with the appropriate State/Territory
authority (you can find a list at However, this is
not necessary if the business is conducted under your name or your business
partner(s); that is, first name and surname, or initials and surname.
Registering your business name as a trade mark
At the start of your business, you might want to consider registering your business
name as a trade mark to give you the right to use your business name as a means to
distinguish your product/service from that of other businesses. IP Australia has more
information on this.

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Chapter 3 - The regulatory requirements of starting a business
Registering a company

GST, ABNs and TFNs
If you expect to have annual sales over $75,000, you have to register for Goods and
Services Tax (GST). If you register for GST, you will need to apply for an Australian
Business Number (ABN), register online with Australian Business Register.
Sole traders can use their own personal Tax File Numbers (TFNs) but partnerships
and companies need to apply for their own. For more information, contact the
Australian Tax Office.
Refer Appendix A for Checklist for people starting a new business – Source
Australian Taxation Office.
Refer Appendix B for Tax basics for Small Business – Source Australian Taxation
State government licences
All states and territories are responsible for different business licences, permits,
registrations and certificates. You will need to check with the appropriate state
government body.
Council permits/requirements
You need to check with your local council to find out about zoning, health
regulations and whether you need to lodge a Development Application or Building
Application before your business can start.
Domain name registration
Whether or not you will be establishing a website for your business in the early days,
think about registering your preferred website name early on if you want to have an
Internet presence at any stage. You can search for and register a domain name at
Melbourne IT. For more information on domain names, visit Australian Domain
Name Adminstrator.

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Chapter 4 - Finding the right premises
Home vs Premises
An important issue for you to consider is where you can operate your business. Are
you able to operate your business from home in the first instance? Do you need
premises when you commence your business?
If you do not need premises, this will be a major bonus in terms of cost. You will not
be locked into premises for a specific period of time.

At some point, every business owner has to choose whether to lease office space or
work from home. This one decision can drastically impact the fate of your business,
so we decided to give you the advantages and disadvantages of both to help you
choose wisely.

While there are obvious reasons why business owners would want to work at home,
it’s not always the best choice. If your business is better suited for it’s own office
space, then the savings from your home office will not compare to the lost business
you’ll encounter. But on the flip side, leasing office space too soon, can drain your
wallet and drive you out of business. So, how do you choose?

If you’re just starting out, it’s smart to consider ways to save as much money as you
can. Obviously having a home office is a much more affordable option. It’s also very
convenient to wake up in the morning and not have to commute to work. And, most
likely your family won’t mind having easy access to you during the day. Based on
these factors alone, a home office may sound pretty good. But, only choose to work
from home if you meet the following criteria:

      •   You work independently and require a minimal amount of group
      •   You primarily communicate with clients and partners by phone or email.
      •   You are self-motivated and highly disciplined when it comes to work. (Be
          honest with yourself on this one– if you’ll be lured into doing odd jobs
          around the house during work hours, a home office is not for you.)
      •   You have a separate space available for your office– that is not a part of
          your normal living area. (You must have one set place where you can focus
          on work and send a clear message to your family/roommate that you’re in
          work mode.)
      •   Your home has all the resources, equipment, and services your business
      •   You have a permit and legal right to operate your business from your
          residence (if required). Check this out with your local council.

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      •   You have a trusted meeting spot nearby where you can hold face to face
          meetings when necessary.
      •   You know your way around the web and are familiar with online tools that
          will keep you connected to the outside world.

On the other hand– There are clear benefits to launching your business in a
professional office space. A “real” office makes you official in the eyes of most, and
sends a clear message that you are serious about your business. It also gives
potential customers and partners a chance to visit your office, meet with you, and
feel comfortable doing business with you. Having a physical location can also result
in walk-in traffic that you would have otherwise missed out on. As tempting as it is
to place your name outside of a professional office space, only consider this option

      •   You are absolutely sure you can afford it and sustain it even when profits
          are low.
      •   Your business requires you to work closely with other people.
      •   You host a lot of meetings and require regular face to face time with
          clients, partners and staff.
      •   You have inventory to store and manage.
      •   Your business has several full-time employees.
      •   You are easily distracted and would not function well in a home work
      •   Your primary customers expect you to have a fully staffed and functional
          office space.
      •   Your business relies on walk-in traffic.
      •   You have equipment, heavy machinery or an operations process that
          requires lots of space.
      •   You need a special commercial zoning permit or license for the type of
          work you do.

There are pros and cons to working from home and leasing office space, but both
can be great options for business owners. The key is figuring out which one is best
for you. Use the criteria above to help you decide which way to go. Don’t rush into
making a choice, and don’t let anyone else influence your decision. Your business will
reap the consequences if you make the wrong choice, so choose wisely.

Now to throw another option open for you to consider. You may not wish to have
leased premises but you do want to have an office appearance. You can look at using
serviced offices. Serviced offices are “real” offices but you rent out their boardroom
and secretary on temporary or short-term basis.

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Some other points for you to consider ……………

Don’t tie yourself down
Tying yourself into a traditional lease is expensive. It also hampers your ability to
adapt to the marketplace. Flexible workspace solutions like virtual offices allow you
to add capacity quickly if you want to grow, or to drop them if revenues dip.

Focus on what you do best
Managing support services like reception is a drain on time. Focus your energy on
core activities, and outsource the rest – from IT to office maintenance to answering
the phone.

Project a professional image
A good business address and impeccable meeting rooms add a level of prestige that
is hard to calculate in dollars. Leasing such space all year round can be prohibitively
expensive, but paying for it only when you need it is a great alternative.

Spend wisely
Don’t spend money on things you don’t really need. For example, don’t waste money
on office space that sits empty half the time, or on expensive business trips that
could be replaced with a video-conference. That way, you can invest more in things
that really matter – such as good staff and effective marketing.

Grow wisely
As your business grows, you may want to expand your presence nationally or
internationally. Research new markets extensively, and consider dipping your toe in
the water rather than plunging straight in. Using virtual or flexible offices is more
cost-effective than locking yourself into an expensive five or ten-year lease in an
untried market.

Don’t cut yourself off
One of the downsides to working at home or in a small office is that you become
isolated. Business networking is critical to creating business relationships, and raising
your profile. One easy way to do it is to work occasionally at the business lounges
operated by firms like Regus. Not only do you meet other people, but a chance
conversation at the coffee machine can lead to new opportunities

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Leasing Premises
Leasing premises will usually tie you down for a specific period of time such as three
to five years with possible option periods for you. Leasing does offer you a sense of
security knowing that you will be in the same place for a period of time subject to
the landlord not doing anything silly.

What is a Lease?

A lease is a legally binding agreement between a property owner (landlord) and the
tenant. Generally the agreement will be for a set time frame, and at the end of the
lease you can either vacate the premises or negotiate with the landlord to renew the

Advantages and Disadvantages?

Advantages of leasing:

   •   Little or no capital investment is required
   •   If the business fails, the premises can be sublet to minimize the financial
   •   As the tenant you are not responsible for property taxes, building insurance
       or repairs and maintenance for the building,
   •   Leasing is more flexible than owning the building as you can relocate at the
       end of the lease period.

Disadvantages of leasing:

   •   You are subject to the conditions of the lease, (i.e. what you can and can?t to
       the base building) and will be subject to rent increases,
   •   The landlord may decide to sell the property and you will be required to quit
       the premises and relocate elsewhere.
   •   You have no investment in the property.

Some of the Things You Need to Consider

Before you race off and sign the first lease document that the agent puts down in
front of you, there are a few things that you need to consider.

   •   Condition and suitability of the property for the purpose you have in mind,
   •   The terms of the Lease and any conditions,
   •   How often the landlord will be able to review (and increase) the Rent, and
   •   Whether or not your can assign or sub-let the leased premises to another

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Serviced Offices
Another option would be to look at utilising serviced offices. Most of the Serviced
Offices will offer you short or long term rental plus the use of boardroom and

A serviced office also known as an "executive suite" or 'executive space' is an office
or office building that is fully equipped and managed by a facility management
company, which then rents individual offices or floors to other companies. Serviced
offices, which are also referred to as managed offices, business centres, executive
suites or executive centres, are often found in the business districts of large cities
around the world. Companies offering serviced offices are generally able to offer
more flexible rental terms, as opposed to a conventional leased office which may
require furnishing, equipment, and more restrictive leases. Space is normally flexible,
allowing for additional space to be allocated at short notice, should the size of an
individual business change. Serviced office providers often allow tenants to share
reception services, business machines and other resources, providing reduced costs
and access to equipment which may otherwise be unaffordable.

Consider all option discussed. If necessary, seek professional advice. If you are intending to lease
premises, please ensure that you get professional legal advice.

Location, Location, Location
When looking for a business premise, you should consider the following.
  •    Location. Do you need to be located close to customers or are you able to
       service your clients remotely via the telephone or over the Internet? Do you
       need to be located close to suppliers?
  •    Necessary features. What features must your premises have? i.e. size, street
       frontage, show rooms, parking or other special facilities.
  •    Lease or purchase. Do you intend to lease or purchase your premises?
  •    Working from home. Do you plan to operate your business from home?
  •    Security. In any premises you consider, you’ll need to look at having the right
       level of security. Consider things like fencing and gates, lighting, entry and exit

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Chapter 5 - Insurance — protecting your business
Often overlooked but one of the most important parts of setting up a business, you
must make sure you have the right insurance in place. After all, your business will be
your livelihood.
What type of insurance will you need?
Depending on the type of business you’re running and the place from which you will
be running it, you’ll need to consider insurance for the following.
Fire/other events: this is a must-have for any business operating from a premise.
Depending on the insurance company, you will generally be covered for loss/damage
from fire, storms, malicious damage or vandalism and accidental damage. Cover your
business for damage to glass windows, signs and counters at your premises as they
are often not included under fire/accident insurance.
Theft: be sure to protect your money, contents or stock from theft.
Legal liability: this type of insurance covers your business if you are sued for causing
personal injury to another person (other than employees) or damage to property
owned or controlled by someone else (public liability) or in connection with a
product sold or supplied by your business (products liability).
Business interruption: this will cover you for a reduction in your business income as
a result of damage to your property. There are often different levels of protection on
Business vehicles: cover your business vehicles against accident, theft or attempted
theft and fire.
Personal: if you’re going to be self-employed, look at purchasing life insurance and
income protection insurance too.
Workers Compensation: You may need Workers’ Compensation if you decide to
employ staff or sub-contractors.
Remember to:
  •   Shop around for the best deal.
  •   Make sure you do not under insure your business.
  •   If you're working from home, don’t assume your general home and contents
      insurance will cover your business.
  •   If you rent your business premises, your landlord's insurance could leave you
      out of pocket.
  •   Seek advice to get the right insurance cover for your business.

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Chapter 6 - Financial records/accounts
In order to ensure the smooth running of your business you should keep financial
records to fully understand your operations and financial situation. This should begin
from the word go.
When commencing your business, I would highly recommend that you speak to an
accountant to help to make sure that you are properly structured, all the appropriate
paperwork is lodged with the Australian Taxation Office and tax planning is
discussed. Tax requirements: check with the Tax Office for any tax obligations with
which your business must apply.
It is highly recommended that you get a good bookkeeper to help set you up with
sorting through the piles of paperwork and accounts. The bookkeeper can
recommend the appropriate software, train you on the use of the software and can
even offer you bookkeeping services. Read our notes later on regarding ensuring
that you find a good bookkeeper.
Depending upon the size of your business, you may need accounting software. If you
are a small business where you write a few invoices per month coupled with a small
quantity of business expenses, you can manage with a Cash Expenditure Booklet that
you can pick up from your newsagency (we have excel templates). If you are starting
out as a large business, you will need accounting software such as MYOB or
QuickBooks so as to track your progress in business, your GST obligations and your
payroll liabilities. We offer our clients a whole range of MYOB and QuickBooks
software at very good prices.
Here are a few ideas for you to consider:
Paper Format
If you are a very small business with minimal amount of trading, go to your local
newsagency or Stationary supplier to pick up the appropriate books for you to record
all of your transactions. You will need at least the following:
Cash Book - to record your cash coming into the business and expenditure,
Sales Invoice Booklet – to record your sales to each of your clients. (Please ensure
that you have your ABN recorded on these invoices).
Payroll – If you are employing staff. This booklet keeps track of time spent, hourly
rates of pay, Gross wages and tax withheld.
Vehicle Log Book – If you are intending to claim motor vehicle expenses, you will
need to keep a log book for three months to determine business vs personal limits.
(Speak to your accountant for further details).
Depending upon your business, you may need to purchase other books.

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If you do not wish to use books, you may feel comfortable to use excel spreadsheets.
Most excel spreadsheets are easy to use and, if used correctly, will calculate your
GST requirements on a monthly or quarterly basis. You do not have to have
advanced knowledge on the use of these spreadsheets.
I have three clients who are currently using the spreadsheets that I have created.
The tax accountant is very happy with the layout of the spreadsheet. If you would
like to know more, please send us an email.

MYOB offer a complete range of accounting software to suit your business. This
software is easy to use and has a great range of reports for you to select from that
helps you keep track of your business at any point in time.
The features of MYOB AccountRight Software
are as follows:
   •   Handles payroll (subject to version)
   •   Handles inventory
   •   Handles debtors
   •   Handles creditors,
   •   Handles BAS

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The above two screen shots show the types of financial reporting that you can get
out of MYOB AccountRight software.
You can also purchase MYOB software whereby you can access your data over the
internet (i.e. through the cloud). You can be anywhere in the world and still access
your information providing there is internet access.
Ask us for further details before you purchase this software.

Similar to MYOB, Quicken offer a complete range of Accounting Software designed
specifically for your business.
Quicken also offer the facility to be able to host your data file over the cloud. There
are three versions available – Hosted (for advanced businesses), Premium (Designed
for IPads and Apple Mac for advanced businesses) and CashBook Online (designed
for small business owners who do not have payroll or inventory.
The latest version of QuickBooks now offer you the facility of lodging your Business
Activity Statement from the software. You just need the Reckon GovConnect

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Reporting features are far more superior. Here are just some examples …..

Starting Your Own Business                                                  25
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Ask us for further details before you purchase this software.

Whichever method of record-keeping you choose from the above options, ensure
that you are able to calculate your GST obligations correctly. If you understate your
GST obligations, if you have an audit from the Australian Taxation Office, and the
understatement is discovered, you will risk incurring severe penalties and interest on
unpaid amounts. It is best to be always right upfront.
If you are not sure about your GST obligations, please speak with your Accountant.
You can also get information direct from Australian Taxation Office.
Financial Reporting
Now that your business is set up, you will need to consider entering your financial
data. Refer to Chapter 7 regarding our subject about bookkeepers. Your data entry
must be up to date at all times so that you can receive the best information
regarding your business. You need to have sound knowledge on the following four
areas of your business:
   1. How much is owed to you by your Debtors?
   2. How much do you owe to your suppliers?
   3. Your GST liability
   4. Your financial situation
Without this knowledge, you can sink real fast. Don’t let this happen to you. Ensure
that you have the necessary financial information to be able to run your business.

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Chapter 7 - Employing staff
Employees will be one of your greatest assets of your company, so spend the right
amount of time and investment to find good people.
Legal requirements
As an employer, you have certain obligations under common law. You also have
obligations under federal and state and territory laws, industrial awards and
agreements, tribunal decisions and contracts of employment.
For information visit;
  •   Fair Work Australia

Organisation Chart
As part of your business plan preparation, you would have spent some time on
developing the type, structure and number of staff that you deem necessary for the
successful running of your business. It is ideally suited if you documented this
structure into what we call an Organisation Chart. You can develop your own
Organisation Chart by using Microsoft Powerpoint or you may find some free
software on the internet.

Finding Good Staff
This is always a challenge to find the right staff that will meet your expectations.
Before any advertising for staff for your
business, you must know exactly what kind of
job you are filling and what kind of skills are
needed. Finding the right staff for your
business can be a real challenge and can cost
valuable resources and time, ultimately
affecting company productivity.
Some of the sources available for you to
choose from are as follows:
  •   Employment Agencies
  •   Centrelink
  •   Local Schools and Institutes                          Business Owner needing help
  •   Professional and Trade Associations
  •   Unions
  •   By advertising in newspaper, radio, magazines etc

Before any advertising can be done you must know exactly what kind of job you are
filling and what kind of skills are needed.
You need to think about the following things:
  •   What the new employee has to do

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  •   The need for previous experience
  •   Whether the job calls for any degree of responsibility
  •   The nature and amount of material or money which might be handled
  •   Skills involved - whether operating skills or mathematical ability is necessary
  •   Any special attributes which may be needed by the employee
  •   Whether the employee’s age, physical appearance etc has a bearing on his or
      her performance

Newspapers are an effective advertising medium because of their wide circulation.
You just have to choose a newspaper that is most appropriate for your needs and
carefully select where in the newspaper you would like your advertisement to
You can also seek staff in other ways such as - posting the vacancy within the firm
itself, posting the vacancy outside the gate, using an employment agency,
approaching local groups such as unions, schools, community groups etc.
Selecting staff
The basis of selection is fact finding, either by asking questions or by requiring
applicants to demonstrate the skills that they claim to have. Some organisations,
which have many applicants, use an application form to save time. Basic details such
as name, age, address and work experience can help shorten the time needed to
select the right applicants.
The success of an interview depends to a great extent on how much preparation is
done. Fact-finding can be more effective if you plan questions in advance and a
standard set of questions makes comparisons easier.
The staff Interview
Most interviews would follow the following steps:
  •   Introduce yourself and explain what you do in the firm.
  •   Give the applicant a brief description of the operations, the job and the
      working conditions. Ask questions and confirm that the applicant is still
      interested. If not, then there is no point in continuing and the interview should
      be terminated.
  •   Introduce yourself and explain what you do in the firm.
  •   Where appropriate ask the applicant to demonstrate the skills most necessary
      for the job.
  •   Introduce yourself and explain what you do in the firm.
  •   Follow up facts or other topics of interest in the work history of the applicant.
  •   Introduce yourself and explain what you do in the firm.
  •   If you have called for written references of any kind, then go through them.
  •   Introduce yourself and explain what you do in the firm.
  •   Indicate when and how you will let the applicant know of your decision.
  •   Introduce yourself and explain what you do in the firm.
  •   Take some notes to consolidate your ideas.

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Business Kit
  •   Introduce yourself and explain what you do in the firm.
  •   If you have the names of previous employees as referees, then consult them
      before making your final decision.

Interviewing is not easy, but you can improve your technique by following these
basic guidelines:
  •   Introduce yourself and explain what you do in the firm.
  •   Prepare adequately
  •   Do not talk too much
  •   Be realistic
  •   Be thorough

After you have chosen a short list of candidates, have them sit for tests to see if they
are compatible for the role that you wish for them to fill. We are in the process of
developing tests for administration and bookkeeping roles. These tests will be
reviewed for the competency that is required for the role based upon the
candidate’s experience.
Now that you have selected the candidate for the job, put them onto a three month
trial period. Ensure that the staff receives adequate induction and training for that
person to be able to complete their job properly.

Finding a Good Bookkeeper
Similar to the issues addressed above for staff, you should ensure that you find a
good bookkeeper.

Knowing how to find a good bookkeeper is very important. Bookkeepers manage
your business finances. They are responsible for keeping payments up-to-date and
calculating your payable taxes. They also keep invoices, manage your payroll and
other transactions critical to your business. Thus, you should be able to trust them.
They could help you improve your business or they could be the cause of your
financial loss.

Learning how to find a good bookkeeper is not difficult. Below are five general
guides to help you select the right bookkeeper for you.

One way to confirm that an applicant has the underpinning knowledge required is to
confirm that they have formal qualifications such as a Certificate IV in Financial
Services (Bookkeeping) or higher. While looking into their formal qualification, also
assess your business and see how easy or complicated your finances could be. A
small business usually has simpler bookkeeping methods as compared to a bigger
company. If your business is just relatively small, a bachelor’s degree holder will have
acquired more than enough skills to manage your finances. More recently the
Australian Taxation Office has introduced legislation that requires bookkeepers, who

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are also submitting BAS Statements, to have a minimum qualification of Certificate
IV in Financial Services (Bookkeeping).

It is important for you to discuss with your bookkeeper your individual business’
processes, the software you use and any other aspects of your accounting system
that may be of interest. By opening up honest and transparent communication with
your bookkeeper from the beginning, you’re more likely to create a strong and stable
work foundation for the future. You can also ask if they have had actual experiences
already of filing income tax returns, and if they are a BAS Agent who is compliant
with the new legislation effective 1 March 2010, or processing payrolls.

Also review other qualifications that may not necessarily be related to bookkeeping,
but are important nonetheless, such as interpersonal and communication skills.
Good bookkeepers should have a pleasing personality, especially so if they will be
dealing with other employees of the company and representing you when
submitting financial reports to banks or other institutions. They should also be able
to handle pressure if there is much work to do. Having the ability to multi-task is a
definite plus.

If you wish to see if your bookkeeper is a Registered BAS Agent, visit and do a search online.

                                   At Swell Accounting Services, our services are
                                   tailored around your needs for your business. Our
                                   services include:

                                       •   Placement of office staff and bookkeepers
                                           either as employees
                                       •   Take the hassle out of selection of the
                                           right candidate for the job if you wish to
                                           have the staff member join your
                                       •   Our bookkeeping services are affordable
                                       •   We “value-add” to your business. Ask us
Our bookkeepers who work for us are Registered BAS Agents and undergo training
on a regular basis so that they can maintain their Registered BAS Agent status.

Paying the Right Amount to your staff
As mentioned earlier, employees can become the greatest asset of your business
providing that you spend the right amount of time and investment. If you want
exceptional people for your business, then you have to reward them well. The

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rewards do not always have to be financial rewards. The rewards can be time off
work outside of normal working conditions, tickets to the movies, etc.
Fair Work Australia has set up Modern Awards which has laid the foundations for the
setting of minimum wage rates and conditions of employment. Visit their website for
further details.
Apart from paying the right amount to your staff, you can increase profitability to
your business by increasing your payment of bonuses to your staff. If you incentivise
your staff, you will find increased time management, productivity and sales.
We are in the process of developing Human Resources Kit.

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Bonus. Additional Help
Government bodies
  •   ASIC — for company registration and legal requirements
  •   Australian Business Register — register for an ABN and other tax obligations
      such as GST
  •   Australian Tax Office — for small business tax information
  •   AusIndustry — for advice on Government grants
  •   GrantsLink — for information on Government grants

State Government small business advisory services
  •   NSW —
  •   ACT —
  •   VIC —
  •   NT —
  •   SA —
  •   WA —
  •   QLD —
  •   TAS —

Swell Accounting Services

We offer Business and Marketing Plans for a small fee. We also prepare both types
of plans ready for your own internal use or for seeking bank finance. Our additional
services include bookkeeping, recruitment, Human Resources, designing systems
Health Checks, payroll and many more services.

Contact Us

Telephone/Fax - +61 7 5522 4593
Mobile - 0409 904 039
Email –
Website –

Starting Your Own Business                                                           32
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