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Starting Your Own Business Advice

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					Starting your own business
What do you expect to get from the                                                                     Where can you get the training you
business?                                                                                              need?
Have you asked yourself why you want to start in                                                       Training courses are available through a number of
business? Is it because you want to invest your money,                                                 providers. DTED can refer you to the main providers of
time and talent in a profit-making venture, or are you trying                                          these courses. Information is also available from Business
to buy yourself a job? Many people find that their hopes                                               SA trade or business associations, industry training
turn into a struggle to survive on less than they would have                                           advisory boards and TAFE institutes.
received through regular employment because they have
not done their homework.
                                                                                                       What is the expected market for your
Starting a business for many, means that they are willing to                                           business?
spend long hours and a great deal of effort in order to make
long-term gains in the way of increased sales income or a                                              Do you know what the market is like for your product or
profitable venture which they can later sell and make                                                  service and how well serviced the chosen location is? Who
capital gains. Many new business ventures fail because of                                              are your target customers?         What are their buying
lack of capital.                                                                                       preferences and why do they buy the goods or services
                                                                                                       you want to offer? Is your product or service aimed at a
                                                                                                       certain age, income bracket or social group? What must
What experience can you bring to the                                                                   you do in order to attract customers?
business?                                                                                              Who are your major competitors and what can you offer
                                                                                                       your customers to change their buying habits? How well
Do you have any experience in running a small business or
                                                                                                       will your product or services perform in a competitive
will you need to attend some short business management
                                                                                                       market place? You will have to work out how many clients
courses to help you get started?
                                                                                                       you will need for a good return and if this depends on
Do you have previous experience in the type of business                                                servicing localised clients or a widespread customer base.
you want to start and do you have the practical skills and
                                                                                                       See if there are avenues for expanding the business
training to perform the work? Get all the information you
                                                                                                       through use of different marketing techniques. Work out
can about the qualifications and experience you need. The
                                                                                                       how you can adapt the nature of your business to meet
Department of Trade and Economic Development (DTED)
                                                                                                       different market needs. Think about how you will advertise
can refer you to sources of information.
                                                                                                       and promote your product and what merchandising and
Operating a customer service business is more than just                                                display needs you might have.
opening a shop or office and waiting for the customers to
                                                                                                       Have you formed a marketing plan and discussed this with
come in.
                                                                                                       your trade association or a business adviser?
Do you have good people and selling skills and are you
committed to quality customer service? Do you have the
skills to deal with awkward customers and the                                                          How well have you chosen the
communication skills needed to find out what your                                                      location?
customers really want and need? Are you confident that
you can relate the features and benefits of your                                                       Have you compared the advantages and disadvantages of
merchandise or service?                                                                                different locations? Is the location in an area which includes
                                                                                                       your target market and do they go there to shop and bank?
                                                                                                       Consider the other service outlets in the area and the
                                                                                                       passing trade.


No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
What are your ideal premises?                                                                          If you want to employ other people in your business then
                                                                                                       you should check the statutory obligations that you will
You should shop around for these. Look carefully at                                                    have to meet. BIZFACT sheets are available on employing
different premises and what they can offer for your style of                                           people. Start with the one called Employing People in
business.                                                                                              Your Business.
How much frontage will you have and is parking readily
available for your clients?                                                                            What else should you know before you
If you are to sell bulky goods is the service entry and
storage area enough? What are the security arrangements
                                                                                                       make a start?
and will the premises need upgrading to cover your security                                            Contact your possible suppliers, understand their terms
risks? Check that the fixtures and fittings suit your needs                                            and conditions of ordering and delivery, what discounts
and look attractive. If you have to do a re-fit this will add to                                       may be available on quantity, the return of faulty of
your costs. Look at the structural condition of the premises                                           defective goods and the delivery turn-around on orders. If
and make sure that the lease document specifies who is                                                 they are willing to extend credit you should make sure you
responsible for repairs, painting and general maintenance.                                             know the terms, the penalties for late payment and if it is
Is the landlord asking you to pay for services such as                                                 more expensive than normal bank credit arrangements.
cleaning which you could do for yourself?
                                                                                                       You should also work out the profit margins you will need to
Check that the floor space is enough for your present                                                  allow to give yourself a reasonable return on sales. How
needs and estimate how soon you will outgrow this if your                                              much is it going to cost you to offer credit to your
business expands. Ask yourself how you see the business                                                customers?
in five years time. Make sure that the space requirements
will last for at least the term of your lease. Moving is                                               Work out the cost to you of offering payment by credit card
disruptive and expensive to trade.                                                                     and weigh this against potential increases in sales.
The lease documents should be discussed with your                                                      Find out the processes and costs of recovering bad debts
solicitor before you sign them.                                                                        through credit control agencies, the Small Claims Court
                                                                                                       and District Court if this might be needed.


What legal matters will you need to
                                                                                                       Ask...ask...ask...
satisfy before you set up business?
                                                                                                       Investigate as much as you can about the nature of your
There may be laws that affect the setting up and running of                                            chosen venture.
your business and you should check with DTED and its
Business Licence Information Service about any licences                                                What makes other businesses succeed or fail and are there
or permits you must have to carry out your trade or                                                    any factors beyond your control that could affect your
business.                                                                                              business?
You will also have to decide on a business structure and                                               If you need further advice talk to a business adviser at
there are BIZFACT sheets available which cover the                                                     DTED. You may also like to make an appointment with
personal liability you must accept for the debts of your                                               your accountant or a Business Enterprise Centre Network
business, give you information on how the structure is to be                                           adviser. Phone an Information Officer on 1800 188 018 for
set up, and the advantages and disadvantages of different                                              contact details.
types of business operations. Ask for:
 •      Choosing a Business Structure Which is Right for You
 •      Partnerships
 •      Proprietary Companies.
You should consult your solicitor about drawing up
Partnership Agreements or Articles of Association. The
local council will give you advice about whether the zoning
regulations allow your business to be operated in the
location you have chosen.
You should get this information before you sign any lease
or other legal papers.


If you want to use your home as business premises, then
you must make sure that this is allowed under
Development Act regulations. The BIZFACT Using your
Home as Business Premises tells you what may be
allowed and how to get local council approval for this.




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Planning to Start a Business
Are you buying yourself a job?                                                                                                  or          $18,333        / month

Have you asked yourself why you want to start in                                                                                or           $4,230        / week
business? Is it because you want to invest your money,
                                                                                                       Do you see yourself meeting these targets?
time and talent into a profit-making venture, or are you
trying to buy yourself a job? Many people find that their                                              What are the other financial
hopes turn into a struggle to survive on less than they                                                considerations?
would have received through regular employment because
they have not done their homework.                                                                     How much capital do you have to start the business and is
                                                                                                       it enough?      Many businesses fail because they are
Starting a business for many means that they are prepared
                                                                                                       undercapitalised. If you have to borrow money do you
to spend long hours and a great deal of effort in order to
                                                                                                       know where and at what rates you can get this? If this is a
make long-term gains in the way of increased sales income
                                                                                                       first-time venture then you may find it difficult to raise
or a profitable venture which they can later sell and make
                                                                                                       money unless you have other assets that you can put up as
capital gains.
                                                                                                       collateral against the loan. Check that you are not buying
                                                                                                       dear money. Shop around for the best rates and terms.
                                                                                                       Ask the financial institution about the other services they
Before you commit yourself you should                                                                  can offer for your business, including overdraft and credit
do your sums.                                                                                          facilities.
Firstly, you should list all your living expenses in order to
see what minimum take-home sum is needed to maintain                                                   Have you prepared a business plan?
your present style of living. Secondly, you should consider
the impact of any finance you want to raise to start the                                               You should prepare a business plan in which you take all
business and whether this poses a risk to your other                                                   income, expenses and starting costs into account.
assets. Thirdly, could you meet the repayments if the                                                  Calculate the gross profit, net profit and personal returns
venture fails? How much will you need to set aside for                                                 you can expect. Include all items of stock and plant you
taxation and personal investment for the future?            A                                          will have to purchase for setting up the business and also
personal budget is provided for this purpose, on the back of                                           the costs of legal expenses, lease, connection of public
this page.                                                                                             utilities and telecommunications. Do you know what the
                                                                                                       council and water rates will be and what your fuel, light and
What is your current available capital and can you do better                                           phone bills will cost? Do you know what other businesses
by investing it on the money market? For example, if your                                              of your type gross and what their track record is like? Is
current employment gives you $30,000 a year and you                                                    there a failure rate and high risk? Discuss your plans with
have $30,000 in capital that you could invest at (say) 10%,                                            your bank manager and your accountant before you
then your business would need to provide a taxable income                                              commit yourself
of:
                                  $30,000
                          /         $3,000       ($30,000 at 10%)

                                  $33,000                                                              What provision should you make for
Will it do this?                                                                                       Taxation?
What volume of sales would you need to support this? If                                                Ask the advice of your accountant about allowable
you can keep 15 cents out of each dollar of sales then you                                             deductions when calculating the potential return from your
will need a volume of:                                                                                 venture. Ask about possible tax liabilities so you can plan
                                    $33,000                                                            for them.
                         ÷               0.15
                                  $220,000         / year                                              *See Over
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
                    Annual Personal/Family Expenditure Budget
                                                        $ per year                         Items of committed spending:
                                                                                                     House repayments or rent

                                                                                                     Personal loan repayments

                                                                                                 Other loan repayments (car etc)

                                                                                                  Credit card and store accounts

                                                                                                   Council rates and water rates

                                                                                                     Electricity/gas and heating

                                                                                                      Phone (rental and calls)

                                                                                                                   Food

                                                                                                                 Clothing

                                                                                                              Insurances:

                                                                                                            Superannuation

                                                                                                             Life insurance

                                                                                                               Health fund

                                                                                                        Household insurance

                                                                                                             Car insurance

                                                                                                 Fares and other transport costs

                                                                                                       School fees and costs

                                                                                            Professional and trade association fees

                                                                                                              Other items:

                                                                                                               TOTAL (A)

                                                        $ per year                            Items of optional spending:
                                                                                                             Entertainment

                                                                                                                  Sports

                                                                                                                 Hobbies

                                                                                                        Donations to charities

                                                                                                                 Holidays

                                                                                                     Savings and investments

                                                                                                        Other optional items:

                                                                                                               TOTAL (B)

                                                                                                       GRAND TOTAL (A+B)

                                                                                             CURRENT INCOME AFTER TAX (C)

                                                                                              CURRENT SURPLUS (C – [A+B])




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Start your own business workshops
 If you are thinking about starting your own business, or maybe you have just started, the Department of Trade and Economic
 Development's (DTED) “Start Your Own Business” workshop will help you work through the critical points needed for success.
 The three-hour workshop steps you through essential information, important advice and basic techniques for starting your
 business on the right course. Key issues covered in the workshop will set you well on the way to preparing initial plans for your
 own business.
 The workshop covers issues such as:
 •   determining the feasibility of your idea
 •   costing your product or service
 •   identifying the skills needed to run your business
 •   business structures, and
 •   looking at capital requirements and sourcing finance



Workshop Locations

Burnside
Council Chambers
 st
1 Floor, Tusmore Room
401 Greenhill Road, Tusmore
                                                                                                       Port Adelaide
                                                                                                       Todd Street Business Chambers
                                                                                                       6-8 Todd Street, Port Adelaide

Elizabeth
Northern Adelaide Business Enterprise Centre
95 Womma Road, Elizabeth West
                                                                                                       Mawson Lakes
                                                                                                       Mawson Centre
                                                                                                       (Opposite Mawson Lakes Hotel)
Morphett Vale                                                                                          Room MC1-21,
                                                                                                       2-8 Main Street, Mawson Lakes
Southern Success Business Enterprise Centre
Unit 5, 209 Main South Road,
Morphett Vale
                                                                                                       St Agnes
                                                                                                       TTG Business Enterprise Centre
Clarence Gardens                                                                                       North East Development Agency
                                                                                                       114 Tolley Road, St Agnes
Inner Southern Business Enterprise Centre
903b South Road
Clarence Gardens                                                                                       Thebarton
                                                                                                       Inner West Business Enterprise Centre
North Adelaide                                                                                         Adelaide University Research Park
North Adelaide Community Library                                                                       Ground Floor
Level 1                                                                                                30-32 Stirling Street, Thebarton
176 Tynte Street, North Adelaide

Please see the reverse side of this sheet for dates, times and locations of workshops.

No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
February – April 2009

PLEASE NOTE: Registration into the workshops is considered as final confirmation. Note the time, date and location of the
booking/s and that each session will start promptly. Thank you for your interest, and we look forward to seeing you at the
workshops.

All workshops run for three hours.




                                DAY                                  DATE                              LOCATION                               START TIME
                           Tuesday                               3 February                        Mawson Lakes                                    5:30pm
                           Thursday                              5 February                           Burnside                                     5:30pm
                          Wednesday                             11 February                       Clarence Gardens                                 9:30am
                           Thursday                             19 February                         Port Adelaide                                  5:30pm
                          Wednesday                                4 March                           North Adelaide                                2:30pm
                            Monday                                 2 March                             St Agnes                                    5:30pm
                           Thursday                               19 March                           Morphett Vale                                 9:30am
                           Tuesday                                24 March                             Thebarton                                   9:30am
                           Thursday                                 2 April                           Elizabeth                                    5:30pm
                          Wednesday                                 8 April                        North Adelaide                                  2:30pm
                           Thursday                                16 April                       Clarence Gardens                                 9:30am
                          Wednesday                                29 April                         Port Adelaide                                  5:30pm




Cost:                                                 Compliments of DTED
Registration:                                         www.southaustralia.biz
Telephone:                                            1800 188 018




A starting in business kit will be sent to you upon registration in a workshop.
For more detailed information on each workshop or to enrol, visit our website or contact DTED and ask to speak to an
Information Officer.
An abbreviated version of our Starting in Business Workshop is available on-line at:
www.kojointeractive.com.au/streaming/startup/ you may wish to view prior to attending the workshop.




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (free call)               E dtedinfo@state.sa.gov.au
Planning for your new business workshops
This workshop is designed for people who have already attended the Starting Your Own Business Workshop and want to take
their business idea to the next stage. The 3 hour workshop gives participants the opportunity to map out their business proposal
and develop a business plan.
Writing a business plan forces you to think logically and methodically about your potential business idea, assess its chances of
success and work out if you can achieve the goals you set for the business. It also helps clarify for other potential business
partners, where the business is headed and make it easier to get constructive feedback from others, such as Business
Advisers. It will also assist you in presenting your ideas when approaching a bank for finance. It’s much better to do this before
you begin the business than to find out afterwards your business idea was unrealistic!
The workshop covers topics such as:
      •      Strategic planning and SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats)
      •      Cash flow planning and seasonality
      •      Finance requirements of debt capital and leasing
      •      Market strategy based on market research
      •      Planning / reporting using a Profit & Loss Statement and Balance Sheet


Workshop Locations
                                                                                                       Port Adelaide
                                                                                                       Todd Street Business Chambers
Burnside                                                                                               6-8 Todd Street, Port Adelaide
Council Chambers
 st
1 Floor, Tusmore Room
401 Greenhill Road, Tusmore
                                                                                                       Mawson Lakes
                                                                                                       Mawson Centre
Elizabeth                                                                                              (Opposite Mawson Lakes Hotel)
Northern Adelaide Business Enterprise Centre                                                           Room MC1-21,
95 Womma Road, Elizabeth West                                                                          2-8 Main Street, Mawson Lakes


Morphett Vale                                                                                          St Agnes
Southern Success Business Enterprise Centre
Unit 5, 209 Main South Road,                                                                           TTG Business Enterprise Centre
Morphett Vale                                                                                          North East Development Agency
                                                                                                       114 Tolley Road, St Agnes
Clarence Gardens
Inner Southern Business Enterprise Centre                                                              Thebarton
903b South Road                                                                                        Inner West Business Enterprise Centre
Clarence Gardens                                                                                       Adelaide University Research Park
                                                                                                       Ground Floor
North Adelaide                                                                                         30-32 Stirling Street, Thebarton
North Adelaide Community Library
Level 1
176 Tynte Street, North Adelaide

No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
February – April 2009

Schedule of upcoming training dates:




                               DAY                                  DATE                                LOCATION                              START TIME
                          Monday                               9 February                            St Agnes                                       5:30pm
                         Tuesday                              24 February                            Thebarton                                      5:30pm
                         Thursday                             26 February                            Burnside                                       5:30pm
                         Thursday                               5 March                              Elizabeth                                      5:30pm
                         Tuesday                                10 March                           Morphett Vale                                    5:30pm
                         Tuesday                                31 March                           Port Adelaide                                    5:30pm
                         Tuesday                                 14 April                         Mawson Lakes                                      5:30pm
                        Wednesday                                22 April                         North Adelaide                                    2:30pm
                         Tuesday                                 28 April                        Clarence Gardens                                   5:30pm




Cost:                                                 Free of charge
                                                      (Compliments of the Department of Trade & Economic Development)


Registration:                                         For more detailed information and to register, please either log onto
                                                      www.southaustralia.biz and follow the links or dial 1800 188 018 to speak to one of
                                                      our Information Officers




PLEASE NOTE:

      •      This workshop is designed for people who have already attended the Starting Your Own Business
             Workshop

      •      A confirmation will be sent to you upon registration in a workshop and will be considered as final
             confirmation. Please note the time, date and location of the booking/s.

      •      All workshops run for three hours and each session will start promptly.



Thank you for your interest, and we look forward to seeing you at the workshops.




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Business Planning
 The Business Plan
                                                                                                        Planning significantly increases your chances of success
 A Business Plan describes a business opportunity. It is like                                           by focussing on five areas in which small business
 a road map because it tells you what to expect and what                                                operators sometimes get lost.
 alternative routes you can take to arrive at your
 destination.                                                                                          1. Realism
 A number of research studies have indicated that                                                         It is easy to be excessively optimistic about a new idea.
 successful small business managers set realistic goals                                                   Planning helps to prevent you from viewing the future in
 and plan how they are going to reach them. Planning                                                      ways that the facts do not support.
 helps you to work smarter rather than harder. It keeps you                                            2. The need for outside advice
 future-oriented and motivates you to achieve the results                                                 Planning enables you to recognise problems that call
 you want. Perhaps most importantly, the process of                                                       for outside sources of information and assistance.
 completing a Business Plan enables you to determine
 what commitment you need to make to the venture.                                                      3. Recognising change
                                                                                                          The nature of markets and consumer needs change
                                                                                                          rapidly. Planning cannot predict change but it helps you
                                                                                                          to recognise it and map your business strategy
 Why Plan                                                                                                 accordingly.
  •      Control future risks                                                                          4. Balancing growth
  •      Prepare for future uncertainty                                                                   Small businesses tend to either grow too fast for their
  •      Control business environment                                                                     capital base or too slow to maintain cash flow. Planned
  •      Control business growth                                                                          growth enables you to plan your capital needs in
  •      Avoid sales crises                                                                               advance and to ensure that funds are available when
  •      Avoid liquidity crises                                                                           you need them.
  •      Avoid succession crises
                                                                                                       5. Result orientation
  •      Ensure people development                                                                        A detailed Business Plan enables you to monitor your
  •      Ensure work space available                                                                      results against a predetermined set of goals and
  •      Avoid stock buying crises                                                                        performance standards.

                                                                                                       Benefits of Planning
 Principles of Planning                                                                                1. Reduces ‘firefighting’
 A plan must be:                                                                                       Many small business owners spend so much time ‘putting
                                                                                                       out the fires’ that they never have a chance to do anything
 o     Explicit                                                                                        else. By preparing a Business Plan you can anticipate
       All steps completely spelled out                                                                problems that are likely to occur and decide how they
 o     Intelligible                                                                                    should be handled in advance.
       Capable of being understood by those who will carry it                                          2. Justifies your plans and actions
       out                                                                                             Often, one decides to do something because it ‘sounds’ or
 o     Flexible                                                                                        ‘feels’ right. You may do something because that is the way
       Capable of accepting change                                                                     that you have always done it. Preparing a Business Plan
                                                                                                       forces you to prove the validity, or at least consider the
 o     Written                                                                                         reasoning of your plans.
       Committed to writing in a clear and concise manner.


No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
3. Tests your ideas on paper                                                                              •      Location
It is much better to produce a Business Plan and find that                                                •      Stocking policy and procedures
the business is likely to be unprofitable than to start the                                               •      Suppliers and potential suppliers
business and find out the same thing.                                                                     •      Sales Terms.
4. Indicates your ability and commitment                                                                3. Service
A well-prepared Business Plan is an impressive document.                                                 •   Description of service
It shows outsiders such as lenders and suppliers that you                                                •   Qualifications necessary to enter the industry
understand the business.                                                                                 •   Industry and/or legal controls
                                                                                                         •   Processes and services to be offered.
 Preparing a Business Plan is an inexact science. Often, it
 is necessary to make estimates. Information that would be                                             Financial Information
 useful may not be available for a variety of reasons.
 Perhaps people who have the information don’t want to                                                 1. Capital Needs
 give it to you; perhaps the information that is available is                                          • Fixed assets needed
 out-of-date and the new data has not been compiled yet;                                               • Working capital needed
 perhaps the information is available to you but the cost,                                             • Starting capital needed.
 effort, or timing involved in getting access to it is                                                 2. Sources of Finance
 prohibitive.                                                                                          • Types of finance needed
                                                                                                       • Owners funds to be used.
 Purpose of Planning                                                                                   3. Cost of Finance
 A long-term management tool                                                                           • Set up costs
                                                                                                       • Current interest rates
 Decisions can be made in the future that best fit with the                                            • Ability to meet borrowings
 aim of the business.                                                                                  • Current returns on owners funds.
                                                                                                       4. Financial Viability
 Investigate and evaluate new business opportunities                                                   • Projected profit and loss accounts
 Present a case for finance                                                                            • Break even analysis
                                                                                                       • Projected balance sheets
 Present a clear picture of the business and its potential.                                            • Cash flow forecasts
                                                                                                       • Working capital needs
 Many of the areas covered in a business plan are common                                               • Budgets – Expenses/Sales/Income
 to all three of the above purposes. The amount and type of                                            • Taxation.
 information will, however, vary with the purpose of the plan

 A written Business Plan should contain the following:                                                 The Market
 The Business                                                                                          1. Market Research
 1. The Idea                                                                                           • Market size
 •   An outline and description of the product or service                                              • Market description
      and background on the industry.                                                                  • Market trends
 2. The Entrepreneurs                                                                                  • Customer profiles and target markets
 •   A history of the founders of the business including                                               • Preliminary sales forecasts and estimated market
      their skills, abilities and proposed ownership structure.                                            share.
 3. Business Objectives                                                                                2. Competitive Position
  •   What the business intends to achieve including long                                              • Competitors
      range goals                                                                                      • Unique selling position
  •   The advantage of the product or service over existing                                            • Quality of existing products or services
      competitors                                                                                      • Marketing practices of competitors.
  •   The image and character of the business to be                                                    3. Marketing Program
      developed.                                                                                       • Distribution channels
                                                                                                       • Sales outlets
 The Product or Service                                                                                • Storage and transport of goods
 Technical description of the business.                                                                • Pricing policy
 1. Manufacturing                                                                                      • Packaging
  •   Description of process and machinery used                                                        • Sales promotions and sales strategy
  •   Patents and design registrations                                                                 • Advertising strategy and costs
  •   Predictions on changes to the industry                                                           • Public relations.
  •   Costs of materials, machinery, etc
  •   Plant location and layout                                                                        Management and Operations
  •   Labour availability and costs.                                                                   1. Personnel
 2. Retailing                                                                                          • Numbers of staff needed
  •   Goods to be sold                                                                                 • Skills necessary
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
•    Training programs.                                                                                •      What licences and permits will you need?
Business Organisation                                                                                  •      What regulations will affect your                                   business?

1. Form of legal organisation:                                                                          Conclusion
• Sole Trader                                                                                           Depending on the purpose of the Business Plan an
• Partnership                                                                                           appropriate conclusion should be developed.
• Company or Trust                                                                                      This could be:
• Registration of business name                                                                          •   a final summary of the objectives and key strengths
• Organisation chart.                                                                                        of the business along with a clear statement of the
                                                                                                             direction of the enterprise

2. Legal Considerations                                                                                •       an acceptance or rejection of the new business
•    Licences                                                                                                  idea/opportunity
•    Commonwealth and State taxes                                                                      •       a clear statement outlining the benefits of investing in
•    Consumer Law                                                                                              the business to a potential financier.
•    Business Law                                                                                      Do not forget to attach any supporting documents that may
•    Insurance.                                                                                        add to your plan (eg. pamphlets, brochures, technical
                                                                                                       drawings, patents, designs biographies of owners,
 3. Premises                                                                                           information on competitors etc).
  •    Space required
  •    Buy or rent contracts
  •    Commercial lease requirements and problems
  •    Availability of suitable premises.



 Questions to                          be         answered                    in       a
 Business Plan
 1. Description of the business
  •   What type of business are you planning (retail,
      wholesale, manufacturing, tourism, hospitality,
      service)?
  •   What products or services will you sell?
  •   What type of business is it (new, part-time,
      expansion, seasonal)?
  •   Why does it promise to be successful?

 2. Marketing
  •   Who are your potential customers?
  •   How will you attract and hold your share of the
      market?
  •   Who are your competitors? How are their businesses
      prospering?
  •   How will you promote sales?
  •   Who will be your best suppliers and why?
  •   Where will the business be located?
  •   What factors will influence your choice of location?
  •   What features will your location have?
  •   How will your building contribute to your marketing
      strategy?
  •   What will your building layout feature?

 3. Organisation
 •   Who will manage the business?
 •   What qualifications will you look for in a manager?
 •   How many employees will you need and what are
     their job descriptions?
•    What are your plans for employee hiring, salaries and
     wages, benefits, training and supervision?
•    How will you manage finances?
•    How will you manage record-keeping?
•    What consultants or specialists will you need?
•    What legal form of ownership will you choose?
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Business Licence Information
What Licence do I need?                                                                                What information do I get?
Surprisingly few businesses need licences, permits or                                                  You will be provided with information and advice on any
approvals. However, the problem for business owners or                                                 licence, for any business activity. The information can
their advisers is knowing which licences may apply.                                                    include:
The Department of Trade and Economic Development                                                       •      licences, permits and approvals you may need for your
(DTED), as well as the Business Enterprise Centre                                                             business activity
Network and Regional Boards, offer a centralised and
                                                                                                       •      name, address and telephone number of the issuing
constantly updated database of information on all
                                                                                                              departments or agencies
Commonwealth, State and Local Government licensing
needs.                                                                                                 •      fee and duration of the licence
If you need information or want to update your knowledge                                               •      forms to be completed.
of licensing requirements for a new or existing business, or
are planning to diversify into a new venture, simply
telephone your nearest Centre to obtain the information                                                Lodgement
needed.
                                                                                                       Licence applications and fees must be lodged directly with
                                                                                                       the department or agency nominated.
Accurate, up-to-date information
Business Licence Information maintains direct, ongoing                                                 How DTED can help your business…
contact with all Commonwealth, State and Local
Government departments and agencies, ensuring licence                                                  DTED provides a range of services to people starting, or
and associated information is current.                                                                 already in business, including:
                                                                                                       •      confidential advice
                                                                                                       •      information and referral
What information do I need to supply?                                                                  •      business education
Tell us the type of business you want to undertake and we                                              •      advice for exporters
will provide printed information and licence forms.                                                    •      business development planning
                                                                                                       •      training and business workshops.
Skilled staff will answer your information request and guide
your enquiry through a special series of questions in order                                            DTED offers a comprehensive range of services for all
to cover all aspects of your business. This service is                                                 businesses in South Australia. As well as those listed here,
available over the telephone or in person, and the                                                     these services include specialist assistance, support and
information can be posted free of charge.                                                              networking.

The Business Licence Information                                                                       Further information
Service is FREE of charge to all
                                                                                                       Business Licence Information Service
enquirers.
                                                                                                       (BLIS)
                                                                                                       1800 188 018

                                                                                                       Business Licence Information Website
                                                                                                       www.bli.net.au
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Business Enterprise Centre
Network


 Eastside BEC
 Unit 2, 294 Payneham Road                                                                              Salisbury Business and Export Centre
 PAYNEHAM SA 5070                                                                                       Innovation House West
                                                                                                        Technology Park
 Telephone        (08) 8132 0377
                                                                                                        MAWSON LAKES SA 5095
 Facsimile       (08) 8132 0985
 E-mail          admin@eastsidebec.com.au                                                               Telephone       (08) 8260 8205
                                                                                                        Facsimile       (08) 8260 8206
                                                                                                        E-mail          sbec@salisbury.sa.gov.au
 Enterprise Adelaide
 25 Pirie Street
 ADELAIDE SA              5000                                                                         Southern Success BEC
                                                                                                       Unit 5, 209 Main South Road
 Telephone                 (08) 8203 7815
                                                                                                       MORPHETT VALE SA 5162
 Facsimile                 (08) 8203 7575
 E-mail                    admin@enterpriseadelaide.com.au                                             Telephone         (08) 8326 6511
                                                                                                       Facsimile         (08) 8326 6922
                                                                                                       E-mail            success@ssbec.com.au
 Inner Southern BEC
 c/- Morphettville Racecourse
 79 Morphett Road                                                                                      Tea Tree Gully BEC
 MORPHETTVILLE SA 5043                                                                                 North East Development Agency
 Telephone         (08) 8294 1181                                                                      114 Tolley Road
 Facsimile         (08) 8294 1188                                                                      ST AGNES SA 5097
 E-mail            admin@isbec.com.au                                                                  Telephone        (08) 8397 9555
                                                                                                       Facsimile        (08) 8397 9599
                                                                                                       E-mail           admin@neda.asn.au
 Inner West BEC
 Adelaide University Research Park
 Ground Floor, 30-32 Stirling Street                                                                   North West Business Development
 THEBARTON SA 5031                                                                                     Centre
 Telephone       (08) 8159 8700                                                                        Todd Street Business Chambers
 Facsimile       (08) 8159 8711                                                                        6 - 8 Todd Street
 E-mail          iwbec@bec.org.au                                                                      PORT ADELAIDE SA 5015
                                                                                                       Telephone         (08) 8440 2440
                                                                                                       Facsimile         (08) 8440 2442
 Northern Adelaide BEC                                                                                 E-mail            admin@nwbusiness.com.au
 95 Womma Road
 ELIZABETH WEST SA 5113
 Telephone    (08) 8256 0900
 Facsimile    (08) 8256 0999
 E-mail       admin@nabec.com.au



Gawler BEC
2 Lyndoch Road
GAWLER SA 5118

Telephone                  (08) 8256 0930
Facsimile                  (08) 8256 0999
E-mail                     admin@nabec.com.au




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Business Names
 Registering a business name is simple                                                                  When do you have to register a name?
 Once you have made a decision on a name for your                                                      Choosing a name for your business that is unique,
 business it is simply a matter of checking the register of                                            describes what you do, or is your marketing tool, means
 existing names at the Office of Consumer and Business                                                 that you will have to register it. Names such as Mary’s
 Affairs (OCBA) to ensure that the name you have chosen                                                Marketing Services, Mary Smith’s Advertising Agency,
 is not being used by someone else. You then fill out a form                                           Smith and Jones Real Estate or Really Movin’ Trucking
 and pay a set fee. This registers your right to use the                                               Company, will all need to be registered.
 chosen name for three years, after which time you must
 renew the name if you are still in that business. You                                                 You must register that name before you can trade under it
 should have some alternative names in mind in case the                                                and you may do so up to two months before you start up in
 name you want to use is already registered to another                                                 order to have time to organise things like advertising,
 business.                                                                                             telephone listings and business accounts.


 Why should you register a name?                                                                       Who has responsibility for maintaining
 It is something you should do to identify your business and                                           the register of business names?
 to put on public record the fact that you are the owner of
                                                                                                       OCBA takes your details and keeps a register which is
 the business. Once you have registered a business name
                                                                                                       freely available to anyone who wants to find out the nature
 it is unique to you and no other business in this State may
                                                                                                       of a business, its locations, when it was started and who
 copy or use it
                                                                                                       the owner of the business is. You may check this register
                                                                                                       yourself to make sure that the name you want to use for
                                                                                                       your business is not already in use. You can also read the
 Do you have to register a business                                                                    register (which is available from the OCBA Internet Site:
 name?                                                                                                 www.ocba.sa.gov.au) to check details when wanting to
                                                                                                       enter into business dealings or purchase an existing
 Not if you are the sole proprietor of a business and you                                              business, make decisions about extending credit to a
 want to trade under your own name. If this is what you                                                business, or for legal dealings, such as the serving of
 want to do then just use your given names and/or initials in                                          notices or summons.
 the way that you generally introduce yourself to clients,
 such as Mary Smith or M G Smith.
 If you work in partnership with someone you may also                                                  What do you do to register?
 choose not to register your business name if that business                                            You can call in person to OCBA to register your chosen
 is carried out under the names of the partners or                                                     name(s) and give your business details. The counter staff
 associates; for example, Mary Smith and George Jones.                                                 will then check your application against the database and
 You may use initials or combinations of given names and                                               you can be supplied with a certificate straight away. They
 initials on the condition you have your surnames in full.                                             also provide a lamination service for the document at a
 You may put on your business cards a description of the                                               small extra charge. If you lodge an application by post you
 type of business you have – training consultant, air                                                  will need to allow about 10 days for your certificate to
 conditioning repairs, secretarial services, without the need                                          arrive.
 to register the description.
                                                                                                       You should not use that chosen business name or get
                                                                                                       stationery or business cards printed until you receive the
                                                                                                       certificate in case the name cannot be approved, or any
                                                                                                       further details are required.


No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
You must place the business name certificate on public                                                  What if your business name, trade
display in your business premises.
                                                                                                        mark, brand name or label infringes
If you have more than one location, it must be shown at the
principal one used. Your business name must also be                                                     the Trade Marks Act?
clearly and legibly shown on any business documents,
                                                                                                        You should check your chosen name or names with
letters, official notices, invoices and accounts, order forms,
                                                                                                        IPAustralia to ensure that you do not infringe the rights of
receipts or cheques.
                                                                                                        others before you register your business name.
                                                                                                        OCBA does not accept any responsibility or liability for
                                                                                                        your use of a protected name.


 What do you do if you want to change
 your registration details?
 Simply advise OCBA within 28 days of:                                                                 More information
 •     changes in the nature of your business                                                          The Office of Consumer and Business Affairs will assist
 •     any other proprietor or person trading under your                                               you with any enquiries in person or over the phone.
       business name                                                                                   Office of Consumer and Business Affairs
 •     change of address                                                                               Third Floor, Chesser House
 •     opening of new and additional premises                                                          91 - 97 Grenfell Street
 •     closure of any place of business                                                                ADELAIDE SA 5000
 •     closure of the business itself                                                                  Telephone 1300 138 918
 •     sale of the business.                                                                           Website: www.ocba.sa.gov.au

 What about other licensing                                                                            Registration Fee
 requirements?                                                                                         As at 1/07/2008
 Registering your business name is not enough in itself if
                                                                                                       Registration fee of $144.00 to be paid upon lodgement of
 you are legally required to have a licence or permit to
                                                                                                       application.
 operate.
 If your trade or business requires a licence from any                                                 Trade marks, brand names information and registration
 authority then you should contact the Business Licence                                                details are available from
 Information Service, Department of Trade and Economic
 Development on 1800 188 018.                                                                          IPAustralia
                                                                                                       Innovation House East Wing
 What else is not covered by                                                                           Mawson Lakes Boulevard
                                                                                                       MAWSON LAKES SA 5095
 registration?
                                                                                                       Telephone 1300 651 010
 Registration of your business does not entitle you to claim
 trade prices or discounts from suppliers, although many do                                            Website: www.ipaustralia.gov.au
 offer this if shown proof that you are a registered proprietor
 of a business.


 What about trade marks, brand names
 and labels?
 A business name does not guarantee protection of your
 label, trade mark or brand if you are a manufacturer. If you
 want to protect your rights to exclusive use of any names
 or labels you should contact IPAustralia, which will provide
 information about applying for Australia-wide protection
 under the Trade Marks Act.




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Business Names, Company Names, Domain Names &
Trademarks
Why it's important to know the
difference between the names?
When you choose the name for your new                                                                  IP Australia provides a professional search service called
business/company or select an Internet domain name you                                                 the Business Names Applicant Search Service (BASS) for
are creating an identity for your business. Your identity                                              a fee of $40 (GST inclusive). Our staff will conduct a
distinguishes your goods and services from your                                                        thorough search of the database and issue a report
competitors so it is important that it is memorable,                                                   showing if
meaningful and protected. Business, company names and
domain names are best protected when they are also                                                            •      there is an existing registered trade mark which is
registered as trade marks.                                                                                           identical or very similar to your proposed business
                                                                                                                     name. You can apply for a search by calling 1300
It is important to understand that if you register a particular                                                      651 010 during normal business hours (if paying
business name and then later seek a trade mark, you are                                                              by credit card), or you can mail or fax them your
not automatically entitled to the same name as a trade                                                               request.
mark. A domain name may not be available to you either.
This means you need to check a variety of registers to                                                        •      Check the domain names registers. For links to
determine whether the name you want is available as a                                                                the various domain names registers in Australia,
business or company name, trade mark and a domain                                                                    visit the .au Domain Administration website at
name.                                                                                                                www.auda.org.au

When choosing a new company or business name, you
should:
                                                                                                       What is a business name?
                                                                                                       A business name is the name under which a business
      •      Search the company names and business names
                                                                                                       operates and registration identifies the owners of that
             registers which determine whether the name you
                                                                                                       business. Registration is compulsory, in every state and
             have selected is already being used. For company
                                                                                                       territory from which a business operates, and must be
             names, contact the Australian Securities and
                                                                                                       completed before the business starts trading. Unlike trade
             Investments Commission Business Centre (ASIC)
                                                                                                       marks, business names do not necessarily provide
             at www.asic.gov.au. For business names, contact
                                                                                                       proprietary rights for the use of the trading name. In South
             the Office of Consumer and Business Affairs
                                                                                                       Australia Business names are administered by the Office of
             (OCBA) on 1300 138 918.
                                                                                                       Consumer and Business Affairs (OCBA).
      •      Then, if you intend to use your company or
             business name as a trading name you should also                                           What is a company name?
             search the trade marks register, see
             www.ipaustralia.gov.au and consider filing an
                                                                                                       A company name, or registrable body, must be registered
             application for a registered trade mark. If your new
                                                                                                       with the Australian Securities and Investment Commission
             name is identical or similar to another person's
                                                                                                       (ASIC). If a company wishes to trade using a name other
             registered trade mark, you could be sued for
                                                                                                       than its registered company name, it must register that
             infringement. Even if you decide to operate
                                                                                                       trading name as a business name. Unlike trade marks,
             without a registered trade mark, you should
                                                                                                       company names do not necessarily provide proprietary
             search the trade marks register to ensure you are
                                                                                                       rights for the use of the trading name. ASIC is responsible
             not infringing someone else’s trade mark.
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
for the administration of company names – see                                                          auDA
www.asic.gov.au                                                                                        114 Cardigan Street
                                                                                                       CARLTON VIC 3053

What is a trade mark?                                                                                  Telephone: 1300 732 929
                                                                                                       Facsimile: 03 8341 4112
A trade mark can be a letter, number, word, phrase, sound,                                             Website:    www.auda.org.au.
smell, shape, logo, picture, aspect of packaging or any
combination of these. Once you register a trade mark in                                                IP searching firms and IP lawyers may also be able to help
Australia, you have exclusive legal right to use, license or                                           you – see your local Yellow Pages Directory for details.
sell it.
                                                                                                       If you would like further information and forms for trade
Even if you do not register a trade mark, you can still use it.                                        marks, please ask for a Trade Marks Application Kit from IP
There is protection against unauthorised use of your trade                                             Australia, details listed previously or contact an Information
mark under the trade practices or fair trading legislation                                             Officer from the Department of Trade and Economic
and it is possible to take action under common law.                                                    Development on 1800 188 018.
However, trade mark registration is advisable because it
can be an expensive and time consuming exercise to take
action under common law.                                                                               The information in this BIZFACT has been sourced from IP
                                                                                                       Australia. Any enquiries should be directed to IP Australia
                                                                                                       on 1300 651 010.
What is a domain name?
A domain name is the unique name that is both intuitive
and easy to remember.

To register a domain name or to view the rules and policies
for registration of domain names in com.au, visit the .au
Domain Administration Ltd (auDA) website,
www.auda.org.au You can also register a domain name as
a word trade mark, provided that it meets the requirements
of the Trade Marks Act.



Further information and Contacts
IP Australia
Innovation House, East Wing
Mawson Lakes Boulevard
MAWSON LAKES SA 5095

Telephone: 1300 651 010
Facsimile: 08 8231 8913
Website:    www.ipaustralia.gov.au

Australian Securities and Investments Commission
Level 8
100 Pirie Street
ADELAIDE SA 5000

Telephone: 1300 300 630
Facsimile: 08 8202 8410
Website:    www.asic.gov.au

The Office of Consumer and Business Affairs
Third Floor, Chesser House
91 – 97 Grenfell Street
ADELAIDE SA 5000

Telephone: 1300 138 918
Facsimile: 08 8204 9771
Website:    www.ocba.sa.gov.au




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Choosing a Business Structure which is Right for You

 If you are starting out in business or changing the nature                                             rights of partners are set out in an agreement or the
 of your business, how are you going to choose which                                                    Partnership Act.
 business structure is the best for you? Three ways of
 organising and operating a business are set out below to                                              What are the advantages of trading in a
 help you compare the benefits and advantages of each. If
 you want more information on Partnerships or Proprietary                                              Partnership?
 Companies you should refer to the separate BIZFACT
 sheets available.                                                                                     Partnerships are simple and relatively inexpensive to
                                                                                                       establish and can make more capital available from
                                                                                                       personal sources and financial services. A wider pool of
 Who is a sole proprietor?                                                                             expertise is available and it is possible to divide the

 This is a person who owns and manages a business on                                                   business operation by specialist roles. Partners can decide
 their own, either under a business name or their own                                                  on how the control of the business and division of profits is
 name.                                                                                                 to be shared under formal agreements, which can also
                                                                                                       provide for future or unforeseeable difficulties.

 What are the advantages of being a
 sole proprietor?                                                                                      What disadvantages do Partnerships
                                                                                                       have?
 It gives the owner total control of the business
 management, the assets and the profits and is simple and                                              They have a life that lasts only as long as the original
 inexpensive to establish, with minimal legal requirements.                                            partners agree to trade together.
 Record-keeping and reporting are required for taxation
 and legal purposes. The business can be discontinued                                                  Death and bankruptcy dissolves a partnership.                                     If the
 easily or may be sold without needing the consent of                                                  venture is to continue it must be re-formed.
 others.
                                                                                                       Partners have both a joint and individual liability for debts
                                                                                                       and actions and there is unlimited legal liability for all
                                                                                                       partners.
 What are the disadvantages of being a
 Sole Proprietor?                                                                                      It may be difficult to operate if personal or partnership
                                                                                                       problems arise, or there are disagreements over
 Business development is limited to the expertise, capital                                             management authority.        Transfer of ownership is
 resources and capabilities of the owner. The owner is                                                 complicated and taking on a new partner requires the
 taxed at the marginal personal rate. Unlimited legal                                                  consent of all parties.
 liability applies to the owner and this can make other
 assets vulnerable to loss if the business fails or incurs
 heavy debts.                                                                                          What is a Proprietary Company?
                                                                                                       The Corporations Law governs the setting up and operation
 What is a partnership?                                                                                of a Proprietary Company. The Company has a separate
                                                                                                       legal identity from the people who own and manage the
 This is an agreement between at least two and up to 20                                                business.
 people to contribute time, money and talent to make a
 profit from a continuing venture. They may trade under a
 business name or under the names of the partners. The
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
 What are the advantages in setting up
 a proprietary company?
 The liability of shareholders is limited because the
 company is seen as separate from the people involved.
 The personal assets of shareholders are not threatened by
 company losses or debts except where shareholders are
 guarantors for the performance of the company.

 There may be taxation advantages. Company taxation is
 at a fixed rate. A company is managed by appointed
 directors, secretaries and managers – all of whom have
 set responsibilities. It is also able to have employees, who
 may include shareholders and directors. Transfer of
 company ownership may be a simple process and the
 company does not have to be wound up upon the
 disability, death or retirement of any one of the persons
 involved.


 What are the disadvantages of a
 proprietary company?
 Forming a company is complicated and may be expensive
 and may take as long as six weeks to complete the legal
 requirements.

 There is greater regulation by government under the
 Corporations Act, and through the Australian Securities
 and Investments Commission. More record-keeping and
 reporting is required. Formation of a company requires
 legal and accounting advice.


 Where can you get more information?
 If you require further information on any of the above
 business structures, consult an accountant or lawyer.




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Partnerships
What is a Partnership?                                                                                 •      nature of the business
It is an agreement between two, and up to 20 people, to                                                •      duration of the Partnership
carry on a business together for profit, with the partners                                             •      business name
each contributing time, talent and money to the undertaking                                            •      business address
and sharing the management responsibility. It must be a
continuing, not a one-off venture.                                                                     •      capital required for the business
                                                                                                       •      capital contributions of each partner
Generally a Partnership means that you and the others
share the profits and accept unlimited personal liability,                                             •      distribution of net profits
both jointly and individually, for the debts and losses
                                                                                                       •      provision for Partnership drawings (income)
incurred.
                                                                                                       •      authority of partners in making decisions or signing
                                                                                                              financial and legal documents
What is the law regarding
                                                                                                       •      the way in which the business is to be conducted and
Partnerships?                                                                                                 controlled
The Partnership Act defines the rights and obligations of                                              •      procedures to be followed in the event of the:
equal partners. The Act sets out the rights and obligations
of all parties. When there is a formal agreement, partners                                                            bankruptcy, death or retirement of a partner
may decide upon the distribution of capital and profits. If                                                           admission of a new partner
there is no such agreement then the law states that all                                                               dissolution of the Partnership.
partners are equally entitled to share the capital and profits,
and must also equally bear responsibility for, and must
contribute funds to meet the losses and debts incurred.                                                Do partnerships have to register the
                                                                                                       business name?
                                                                                                       The Business Names Act can require registration for
How is a Partnership agreement                                                                         businesses carried out under Partnership arrangements.
reached?                                                                                               Registration of a business name serves to identify a
Partnership agreements should ideally be put in writing in                                             business and its owners clearly and distinctly from every
order to reflect the interests of all concerned, and the                                               other business in the State.      This registration is not
nature of the business. A well thought out agreement will                                              necessary if the business intends to trade only under the
protect all partners and will set out the rules of conduct for                                         names of its owners. When this happens the name of the
future events and how problems will be settled. It will                                                business is restricted to the surnames and first names
become the set of rules by which the business is to be                                                 and/or surnames and initials of the partners. A BIZFACT
conducted and should be agreed between all partners                                                    sheet on registering a business name is available from
before the business is started.                                                                        DTED.
It is advisable to contact your solicitor and accountant                                               How do you choose a partner?
before forming a Partnership. The use of other business
advisory services, such as those provided at the                                                       You should choose your intended partners very carefully
Department of Trade and Economic Development (DTED),                                                   before going into business. In order to make a wise
may also be helpful in working out the points upon which                                               decision you will need to think about what the person can
you and your partners should agree.                                                                    contribute in terms of capital and expertise. Family and
                                                                                                       friends do not necessarily make the best partners if they
An agreement should set out:
                                                                                                       cannot contribute positively to the operation of the
•     names and addresses of the partners                                                              business.
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
What do you need to know before                                                                        Family members may benefit from a partnership by
                                                                                                       spreading the income over two or more family members, to
making a Partnership decision?                                                                         minimise the impact of taxation – but remember all
                                                                                                       members must be active partners in the business.
All people considering entering into a Partnership must be
made aware that:
•    Partnerships and partners are viewed by law as the                                                What about children in the family
     same thing as the business itself
                                                                                                       business?
•    all partners are personally liable for business debts and
     any obligations and actions which may arise from                                                  The ATO may view the inclusion of children under the age
     business dealings                                                                                 of eighteen in the family business as an attempt at income-
                                                                                                       splitting and may impose penalty rates on any income
•    undischarged bankrupts and persons of unsound mind                                                shared with them. If your business is to include your
     cannot enter into a Partnership                                                                   children then you should seek the advice of an accountant
                                                                                                       or business adviser to avoid unwanted taxation penalty
•    unless otherwise provided for in the agreement:                                                   situations.
          each partner may take part in the management of
          the business
                                                                                                       There are also legal considerations regarding the capacity
          each partner may enter into contracts with third
                                                                                                       of children to enter into contracts in their own right which
          parties
                                                                                                       are personally binding. If someone under the age of
          no majority of partners may expel any other                                                  eighteen enters into an ill-considered contract then the
          partner                                                                                      results could become binding upon the partnership with no
          a partner cannot sell a personal share of the                                                personal liability imposed on the partner who is under 18.
          business unless other partners agree                                                         Third parties might also be unwilling to enter into
          a partner cannot transfer ownership between                                                  agreements with Partnerships that include children.
          partners or a third party without the agreement of
          the other partners
          a new partner can only be brought in if all other                                            Contacts for further information
          partners agree
          a partner who retires from the business is still                                             Solicitors, accountants and business advisers can give you
          liable for debts incurred before the retirement                                              advice on entering into Partnership agreements. Phone an
                                                                                                       Information Officer on 1800 188 018 for contact details.
•     new partners are not liable for debts incurred before
      they entered the business
•     death or bankruptcy of a partner will terminate the
      Partnership
•     the Partnership has to be re-formed or reconstituted if
      a partner resigns, dies or retires
•     partners may terminate the Partnership at any time by
      giving due notice of their intentions
•     the life of the Partnership is limited to the duration of
      the association of the founding partners.


How is taxation handled in a
partnership?
For a business to be recognised as a Partnership by the
Australian Taxation Office (ATO) it is necessary to show
that the partners have real and effective control over the
assets, liabilities and profits of the business.

A properly drawn up Partnership agreement can assist in
establishing this claim.
An application for a Partnership Tax File Number is
required and an annual taxation return must be filed.
The Partnership business is not taxed separately from the
partners themselves. Each partner must pay tax on all
income, including the share of the Partnership profit.
Partners cannot treat income from the business as salary
or wages.       Partners may have the right to offset
Partnership losses against other income.


No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Proprietary Companies

If you are thinking about setting up a                                                                 There are residency laws that must be met, with at least
proprietary company are you really                                                                     one director normally resident in Australia.

aware of the duties and responsibilities
                                                                                                       What are the advantages of setting up
involved?
                                                                                                       a proprietary company?
What is a proprietary company?                                                                         The liability of shareholders is limited to the share capital
                                                                                                       they have subscribed and any debts that they may have
This is set up under a formal legal agreement and gives the                                            personally guaranteed. The personal assets of
company a separate identity (legal entity) from the people                                             shareholders are not threatened by company losses or
who own and manage the business. By law the company                                                    debt. Shareholders and directors may be employed by the
is considered to be a person in its own right with the legal                                           company under normal salary and wage conditions and
and financial obligations that a person might have. It is                                              their income taxed at personal rates. Company taxation is
owed a duty of care by the people who operate the                                                      at a fixed rate.
business.
                                                                                                       A company is managed by appointing directors, secretaries
The laws governing the setting up of such a company are                                                and managers, all of whom have set responsibilities.
set out in the Corporations Law, and the financial dealings                                            Transfer of company ownership may be a simpler process
of the company are monitored through the Australian                                                    than in other business structures. The company does not
Securities and Investments Commission (ASIC). There                                                    have to be wound up upon the death, disability or
must be systematic recording of the company’s financial                                                retirement of any of the persons involved.
transactions.

                                                                                                       What are the responsibilities of
Who can form a company?
                                                                                                       company directors?
Companies can be formed by one or more people who
must be over the age of 18. People who are undischarged                                                The responsibilities are set down in law and it is common
bankrupts or have been convicted of any offences relating                                              for company rules to give set duties to specific individuals.
to the formation, management or fraudulent operation of
                                                                                                       Directors must ensure that all actions of the company are
any company, are barred from forming a company. People
                                                                                                       properly recorded, hold an annual general meeting which
who have committed any breaches of corporate law should
                                                                                                       includes the shareholders and lodge various forms with the
see a solicitor before considering whether to form or enter
                                                                                                       ASIC.
into a company. There are serious penalties for ignoring
these rules.                                                                                           The directors may also exercise management functions in
                                                                                                       relation to day-to-day operations such as:
                                                                                                         •      buying or leasing trading premises
What are the minimum requirements
                                                                                                         •      arranging finance
for forming a company?
                                                                                                         •      ordering goods and services
A company must have at least one shareholder and it may                                                  •      paying suppliers
have more than one director. Shareholders may also be
                                                                                                         •      operating service and retail outlets
directors and company secretaries.
                                                                                                         •      keeping financial records
                                                                                                         •      preparing financial reports and tax returns.
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
What conduct is expected of a director?                                                                Institute of Chartered Accountants in Australia
                                                                                                       Level 11, 1 King William Street
The law sets down rules of ethical behaviour for directors                                             ADELAIDE SA 5000
and expects honesty and a duty of care for the benefit of
the company.                                                                                           Telephone:                  1300 137 322
                                                                                                       Facsimile:                  8231 1982
Dishonest conduct covers more than theft or fraud. It may                                              E-mail:                     service@charteredaccountants.com.au
be that any decision of a director which is not in the overall                                         Website:                    www.charteredaccountants.com.au
best interests of the company might be considered
dishonest under law. It is wise for directors to make sure
that they are fully informed of the possible effect of any
decision made before they consent to it. In this way they                                              Australian Institute of Company Directors
are protecting themselves and their company. To do this                                                Level 8, 70 Pirie Street
effectively they should:                                                                               ADELAIDE SA 5000
 •      keep themselves informed of company activities
                                                                                                       Telephone:                  1300 739 119
 •      take an active part in board meetings                                                          Facsimile:                  (08) 8236 2833
 •      ask questions about management decisions                                                       E-mail:                     sa-nt@companydirectors.com.au
 •      look into any new proposals carefully                                                          Website:                    www.companydirectors.com.au

 •      seek outside professional advice in order to make
        considered judgements on any matter before the
        board.                                                                                         Australian Securities and Investments Commission
                                                                                                       Level 8, 100 Pirie Street
All information about the company and its dealings should                                              ADELAIDE SA 5000
be treated as highly confidential and not used in any way
which could damage the company. A director also has a                                                  Telephone:                  1300 300 630
responsibility to ensure that the company does not incur                                               Facsimile:                  (08) 8202 8410
further debts by trading when insolvent.                                                               E-mail:                     info-enquiries@asic.gov.au
                                                                                                       Website:                    www.asic.gov.au

What are the signs of a company in
financial trouble?
If you are considering entering a company or are a director
of one you should keep alert for the danger signals. These
are:
 •      low operating profits or cash flow
 •      problems in paying suppliers on time
 •      suppliers refusing to extend further credit
 •      problems with loan repayments or keeping to
        overdraft limits
 •      threats of legal action by suppliers and creditors to
        recover money owed.

Where can you get further information?
•     Talk to a business adviser at the Department of Trade
      and Economic Development, phone 1800 188 018
•     Contact your solicitor and accountant
•     Make an appointment with a Business Enterprise
      Centre or Regional Development Board business
      adviser. For your local centre phone 1800 188 018
•     Contact one of the following organisations:

CPA Australia
280 Pulteney Street
ADELAIDE SA 5000
Telephone:       1300 73 73 73
Facsimile:       (08) 232 3194
E-mail:          sa@cpaaustralia.com.au
Website:         www.cpaaustralia.com.au




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Using Your Home as a Business Premise
 Do you want to run a business at home? If you want to                                                  •      goods are not displayed in a window, around the
 use your home as a place of business then you must be                                                         house and garden or on the kerbside
 aware there are controls on the kind of business activities                                            •      it does not involve the use of a vehicle exceeding
 (classed as home activities) that may be allowed under the                                                    three tonne tare in weight.
 regulations of the Development Act. These ensure that
                                                                                                       Home activities are classed as: some hobby, craftwork or
 any use of residential areas for business purposes will not
                                                                                                       similar activity that the resident may carry out without
 cause problems through noise, traffic, pollution or any
                                                                                                       causing offence or annoyance to other nearby residents.
 visual evidence of a business activity that will affect the
 quality of life in a neighbourhood. Before you approach                                               Permission to engage in a home activity should not be
 your local council for permission to use your home as a                                               seen as consent to conduct a backyard industry or
 business premise, you should be aware of the following                                                business in the home.
 points:

 Zoning Controls                                                                                       Breach of Regulations
 The Development Act controls land use in a designated                                                 Local councils are given clear rights and criteria for
 area. Local councils have the responsibility for deciding                                             prosecuting breaches of zoning regulations. No business
 whether a proposed land use complies with the Act. The                                                activities should be carried out without council approval.
 regulations provide for the creation of different land use                                            If you are unsure if your proposed home business activity is
 zones and the classification of land uses into groups. A                                              permitted as a home activity then you should consult your
 council may decide whether a land use is in compliance,                                               local council.
 or not in compliance within a particular zone.

                                                                                                       Gaining Council Approval
 Home Activities
                                                                                                       In order to gain council approval to use your home for
 Manufacturing, trading and office uses are not generally                                              business purposes you should write to them with details of
 permitted in almost all residential zones. There are                                                  your business and state clearly how it meets the criteria
 provisions for some business uses to be classified as a                                               given for a home activity.
 home activity and can be carried on with council consent.
                                                                                                       If the home activity qualifications cannot be met then you
 Business use must not have an adverse impact on the                                                   will be unlikely to receive approval to operate a commercial
 local environment and the general surrounding area.                                                   business within a residential zone.
 Residents may carry out business in their own home
 provided:                                                                                             Do not proceed to conduct business unless you have the
                                                                                                       approval in writing.

 •     the business does not require the assistance of more
       than one person not normally resident in the home no
       more than 30 square metres of floor space are used
       (either permanently or temporarily)
 •     the business does not require any other source of
       power not normally supplied to a household, with the
       exception of an electric motor of not more than 0.4
       kilowatts
 •     it does not impose a greater load on any public utility
       (gas, electricity, water, sewerage) than that normally
       used by other service users in the locality


No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Home Business Essentials
In South Australia over 60,000 businesses operate at, or                                               home means lower overheads and therefore the selling
from, home. The types of businesses range from simple                                                  price of goods and services can be lower than currently
services like consulting, book keeping, editing, design, IT,                                           paid by the market. In preparing a feasibility study and
and health through to small scale manufacturing. Many                                                  business plan, talk with a business adviser to ensure you
tradespeople operate their businesses from home,                                                       include all the possible costs of business operation and
travelling to their job sites daily and keeping their trades                                           determine overheads accurately.
equipment at home and in their vehicles.           Dramatic
changes in communication technologies have made it                                                     Legislation and Rules for Home
possible to deliver services and products to world-wide
customers whilst operating the business at home.
                                                                                                       Businesses
Owning home based business is, for the most part, just like                                            In South Australia a business operating at a residential
owning any other business. Regardless of location every                                                property must not –
business must serve a market for its products and services                                                 •    Employ more than one person over and above the
and generate sufficient sales to cover operating expenses                                                       owners of the property and business
and make a profit. The level of profit must be sufficient to                                               •    Occupy more than 30 square metres
reward the business owners’ time, repay any loans,                                                         •    Use machinery drawing more than 0.4 kilowatts
accumulate capital for expansion, reward the capital                                                       •    Impose greater load on utilities than would be the
invested and pay any taxes applicable to net income                                                             case for a residence
                                                                                                           •    Create any noise or nuisance
Your skills and talents                                                                                    •    Generate more than normal vehicle traffic in a
                                                                                                                residential street
In deciding on your business be sure that you have the                                                     •    Display a sign without consent of the local council
skills and talents necessary to provide quality products or                                                •    Display goods for sale outside the house
services. Besides the products or services you also need                                                   •    Involve the use and parking of a vehicle greater
skills in business administration, communication and sales.                                                     than 3 tonnes tare weight.
In some cases you might ‘outsource’
                                                                                                       There may be additional zoning controls imposed by local
                                                                                                       councils and these should be checked as part of your
A feasibility study and a business plan                                                                business feasibility study.

Before you start your business it will be important to                                                 You must consider specific insurances for your business.
undertake a basic feasibility study –                                                                  Household insurance will not cover business activities –
    •   Is there a sustainable market at a price sufficient                                            customers coming to your home.
        to provide an adequate profit?
    •   Can you secure the funds needed to establish and                                               You should have an Australian Business Number and,
        sustain the business?                                                                          depending on turnover you may need to consider Goods
                                                                                                       and Services Tax (GST) registration. Trading using a
    •   What level of profit is your target?
                                                                                                       Business Name requires registration.
    •   When will cash flows be substantially positive?

If the numbers look promising it will be important to extend                                           Thinking about business at home
the study into a written business plan which looks to project
sales, expenses and profits over the first three years of the
                                                                                                       Operating a business at or from home can have some
business. The plan will take account of the fact that you
                                                                                                       advantages –
will be operating the business at, or from, home. A word of
warning! Many people think that operating a business at
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
      •      Ability to operate the business part-time whilst
             continuing in employment
      •      Flexibility in dealing with family requirements
      •      Ability to operate for extended hours

There can be some disadvantages –
    •   You may operate in isolation from other business
        contacts and so be unaware of market changes,
        legislative changes
    •   Your personal contacts may only be with
        customers and infrequently so you may be lonely
        in your work environment.
    •   You may need to keep the house tidy and in order
        so that visiting customers consider you business
        like.

Effective networking
It is important to keep up-to-date. Join your local chamber
of commerce and contact you local Business Enterprise
Centre or Regional Development Board and participate in
networking and business education programs. Subscribe
to industry magazines and to home business websites.

Daily business operation

      •      ‘Go to work’ at a set time each day and shut out
             any household activities
      •      Where possible, connect a separate phone/fax
             line for your business.
      •      Establish a separate business email address from
             personal emails.
      •      Establish a simple but effective book keeping
             system and keep your financial accounts up to
             date.
      •      Establish a firm customer payments policy.
             Payment by credit card is preferable to extending
             credit to your customers.

Advice and assistance

      •      Establish a good relationship with an accountant
             who can advise on records, tax issues, business
             structure
      •      Contact your local Business Enterprise Centre or
             Regional Development Board for fact sheets,
             checklists and the opportunity for face-to-face
             discussion with an experienced adviser – before
             your start and when the business is in operation.
             Prepare a business plan.
      •      Attend business management education programs
             to improve management skills and to keep up to
             date with business systems and practices.




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Buying a Business
 Some points to consider before you begin…

 Sales                                                                                                 Costs
  •      Is the product or service currently sold likely to                                            •      Are all expenses shown? Will you, as the new owner,
         maintain or improve its marketability, or is it in                                                   have the same level of expenses?
         danger of becoming over-sold, out of style or
         obsolete?                                                                                     •      Has the owner delayed some expenses such as
                                                                                                              equipment maintenance?
  •      Is the business in a good location or is this the
         reason why it is for sale?                                                                    •      Are there annual expenses coming due soon?

  •      Are prices competitive? Are competitors gaining                                               •      Are there new or increased expenses you should
         strength?                                                                                            anticipate?

  •      Are all sales in reliable records? Are the total sales                                        •      Is an adequate salary allowed for work done by the
         broken down by product line, if applicable?                                                          owner and family in addition to profit margin?

  •      Are bad debts deducted from sales, or are they still                                          •      Is interest paid for money loaned to the business by
         shown as receivables?                                                                                the owner?

  •      What is the sales pattern year by year and month by                                           •      Is depreciation claimed for the equipment?
         month? Is the pattern seasonal or related to some
                                                                                                       •      Are the staff adequately paid, or do they expect wage
         business cycle (such as home construction or other
                                                                                                              increases soon?
         uncontrollable variable)?
                                                                                                       •      Have you checked the terms and conditions of the
  •      Are some goods just on consignment, with the right
                                                                                                              lease and discussed these with your solicitor?
         of being returned for full credit?
                                                                                                       •      What effect would decreased or increased sales have
  •      Are some goods on warranty? If so, will a financial
                                                                                                              on your costs?
         allowance be made for possible warranty
         commitments?                                                                                  •      What expenses do similar businesses have?
  •      Are some fluctuations in sales due to lucky one-shot                                          •      Do you know what costs are allocated to which
         sales?                                                                                               product, and how a change in product mix would affect
                                                                                                              costs?
  •      Is a particular salesperson critical to success?
                                                                                                       •      Are some expenses prepaid by the seller? Will you
  •      Is the seller’s personal role critical to success?
                                                                                                              have to reimburse the seller for your share?
  •      Are you sure all sales are for this business, and the                                         •      Has inventory been accurately shown at true current
         seller hasn’t added sales from another business?                                                     value, for calculating actual cost of goods sold?
         Are you sure that the rate of stock turnover is in line
         with the industry practice? Are you sure that the
         existing stock does not include slow-moving items
         from another business?
  •      Will you be able to continue buying the products from
         existing suppliers?
  •      Can you increase sales with current resources?

No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
 Profits                                                                                               Liabilities
 •     Have you looked at the effect of increased or                                                   •      Are the assets you’re buying free of debts and liens?
       decreased sales on profit?                                                                             If you are assuming some debts, do you know the
                                                                                                              exact terms of repayment? Is this in writing?
 •     Do you know the minimum likely sales? The
       maximum likely sales?                                                                           •      Are there any contingencies, such as warranties or
                                                                                                              guaranteed debts or accounts? Are you assuming any
 •     Have you considered what effect inflation will have on                                                 risk of being liable for the previous owner’s actions (as
       sales or costs, over the years to come?                                                                might happen when buying a limited company)? Will
 •     Are profits adequate to warrant taking the risk?                                                       you be expected by customers to make refunds on
                                                                                                              warranties, even though you may not be legally
 •     Have you analysed the financial records for the last                                                   obligated to do so, or risk losing their goodwill?
       three years including balance sheets, profit & loss
       statements, tax returns, purchases and sales records                                            •      Has the previous owner received any payments in
       and bank statements? Have the records been well                                                        advance – deposits etc – that should be turned over
       kept?                                                                                                  for you?
                                                                                                       •      Have you checked the business’ credit rating with
 Based on past financial results, have you projected the                                                      suppliers? Will you receive an established rating (or
 future cash flow and profitability of the business? What is                                                  be treated as a new account)?
 the break-even point for sales?                                                                       •      If buying part of a company or entering a partnership,
                                                                                                              do you know what limits there are on one person
 Assets                                                                                                       making a commitment on behalf of the business?
 •     Do you know exactly what you are buying and not                                                 •      Will your cash flow from operations be enough to pay
       buying? Are there lists and have you checked them?                                                     your debts?
 •     What is the book value, the market and replacement
       value of the fixed assets?                                                                      The Seller and You
 •     If inventory or work in progress is to be included has a                                        •      Do you know the real reason why the business is for
       value been agreed upon at the time of offer? Have                                                      sale?
       you agreed on how it will be adjusted at time of
       settlement, and within what limits?                                                             •      Is the seller               being       cooperative           in     supplying
                                                                                                              information?
 •     Has any inventory been sold but not shipped?
                                                                                                       •      Is the seller willing to sign a non-compete agreement?
 •     Have you decided what intangibles you want – mailing
       lists, business name, exclusive rights, leases, etc?                                            •      Will the seller train you and assist you after the
       Can they be transferred?                                                                               purchase?
 •     If you need new licences, do you know how to get                                                •      Is this the type of business you were actually looking
       them?                                                                                                  for?
 •     Are you buying the accounts receivable?                                Do you                   •      Is the type and size of business compatible with your
       have a listing of these accounts by age?                                                               interests, experience, personality and capital?
 •     Is the equipment in good repair? Is it efficient? Is it in
       danger of becoming obsolete or difficult to service?                                            The Purchase Agreement
       Could it be sold easily?
                                                                                                       •      Does the draft agreement cover what assets are to be
 •     Is any equipment leased? Do you know the terms
                                                                                                              purchased, what liabilities are to be assumed and
       and the cost of each lease? Will you get ownership on
                                                                                                              when the business is to be taken over?
       maturity?
                                                                                                       •      Are you ready to negotiate? Remember a business is
 •     Will you have to build up your own accounts
                                                                                                              worth no more than the highest price someone will
       receivable? Have you figured out how this will affect
                                                                                                              pay, no less than the lowest price the seller will accept.
       your cash flow?
                                                                                                       •      In drafting your offer, have you included escape
 •     If the business is a limited company, are you buying
                                                                                                              clauses covering obtaining finance, inspecting all
       the shares or the assets? Be sure to consult a lawyer
                                                                                                              records, receiving necessary licences and rights, other
       or an accountant on this point.
                                                                                                              transfers?
 •     Have you consulted an accountant on how to value
       the various assets?




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Buying a Franchise                                                                                      How much is known about the franchisor’s history
                                                                                                        and reputation?
 If you are considering buying a franchise then there are                                               How long has the franchisor been in business? If the firm
 some things you must find out first.         A legitimate                                              is new ask about the product or concept testing, how long
 franchising company is proud of its name and welcomes                                                  the trials were and what were the results. You should
 detailed investigations. A franchise can be a good way of                                              request annual reports and research data to show you
 investing providing that you do your homework. Beware                                                  how well the company is performing.
 of any company that refuses to answer your questions.

 You should consult your accountant, your bank, a solicitor                                             Is the firm ethical and does it have a good                             reputation?
 or a registered franchise adviser before you sign any                                                  Has it got a good record of honesty with its                            franchisees
 contracts. The Business Enterprise Centre Network and                                                  and customers?       Ask who the principals                               are, what
 Regional Development Boards have advisers who can                                                      standing they have in the community and                                  what their
 assist with your enquiries. For details of your local centre,                                          business experience is.
 phone 1800 188 018.                                                                                   Check the reports to see that the firm is adequately
                                                                                                       financed and what the plans are for future expansion.
                                                                                                       Check their policy on extending franchises in a locality to
 Franchise Council of Australia                                                                        make sure that your market share will be protected.
 PO Box 2195
 MALVERN EAST VIC 3145                                                                                 Take your time to research the background material. Have
 Phone: 1300 669 030                                                                                   you been provided with a disclosure document? Ask other
 Email: info@franchise.org.au                                                                          franchisees about their experience with the company.
 Web:    www.franchise.org.au
                                                                                                       Find out how selective the company is in choosing
 What is the product or service like?                                                                  franchisees. Have they asked you for full details of your
                                                                                                       qualifications, business experience and financial standing?
 A franchise usually relies on a corporate image and you
                                                                                                       Is the company a member of the Franchisors’ Association
 should check how this is generally regarded. Would you
                                                                                                       of Australia and New Zealand?
 normally buy the product or service for yourself? How do
 you feel about committing yourself to long-term business
                                                                                                       What should you ask about the sales area?
 with the products sold now?

 How well does the product perform? Are there steady all-                                              Where is the product or service sold now and what
 year sales or are there seasonal variations? Could you                                                guarantee do you have that it will sell in your area? How
 carry a slack period? Check that the product is not just a                                            much competition is there from similar products in both
 fad but will continue to enjoy a good market in years to                                              franchised and non-franchised outlets and how much of the
 come. How long has it been on the market and what is its                                              market share do they hold? Check on how good trade is in
 market share? Can this be improved by your efforts? Ask                                               the other outlets and on the quality of their product and
 how the product or service fares in relation to its major                                             service to see if your franchise will be competitive.
 competitors. Does the price and quality stand up to
                                                                                                       Look at how the franchise sales area is defined on a map
 investigation? Is it packaged and merchandised well and
                                                                                                       and in the contract, and whether you get exclusive rights to
 who supports the advertising campaigns?
                                                                                                       a particular catchment area. Find out as much as you can
                                                                                                       about the characteristics of the area in relation to your
                                                                                                       product. Does the population match the target market in
                                                                                                       terms of age, buyer preferences, spending and product
                                                                                                       image?




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Is the locality in a population growth area or in a declining                                           How much do you know about the operating systems that
neighbourhood? What are the general characteristics of                                                  the franchisor uses? If they provide procedural manuals,
the residents or those who work there? Are they the same                                                Codes of Practice, Quality Service Policy and any form of
kind of people or a mix of types and ages? What effect will                                             centrally generated accounting and record keeping
population changes and suburb image have on your                                                        system, are these provided to you under the terms of the
customer profiles?                                                                                      franchise? Does the franchisor give you training in the
                                                                                                        management and operational systems and is this at any
Is there potential for trade growth in this area and how                                                cost to yourself? Have you been able to observe a system
many sales can you trap from passing trade? Some                                                        in full operation before you choose to sign up?
companies do market research before they offer a
franchise. Check if this has been done.                                                                 If there is franchisor finance available you should check
                                                                                                        the normal money market rates with your accountant and
                                                                                                        bank manager to make sure that it is competitive and you
                                                                                                        cannot get a better deal elsewhere.
 The franchise contract should explain fully all your
 rights and obligations under the franchise agreement                                                   What feedback does the company provide through
 that you make with the company. It should be                                                           centralising accounting and analysis of sales performance
 comprehensive and down to earth. It should be in                                                       that could assist in planning?
 plain English. You should check the contract with a
 solicitor and your accountant.                                                                        How is the advertising and sales promotion handled? If
                                                                                                       there is any media promotion or use of celebrities will you
 The contract should benefit and protect both parties and                                              be able to gain assistance through this?
 you should ask what your rights are to terminate the
 contract and how much this would cost you. Would you be
 able to sell the franchise if the franchisor consents and
 how much money, if any, from the sale of the business
 would go to the franchisor?

 A contract should list the terms under which the franchisor
 is entitled to exercise an option to take back or terminate
 the contract and the conditions under which this might
 occur. What compensation for the goodwill that you have
 built up would be recovered in such an event?

 Does the contract prevent you from establishing, owning
 or working in a competing business for some years after
 termination or sale of the franchise?

 Are the payments you have to make to the franchisor fully
 spelt out – do they include the franchise fee, any
 advertising levy and renewal fees? What other payments
 apply?

 How much merchandise must be purchased from the
 company and how often? Are there any supplies that you
 can or must organise for yourself?

 If there is a sales quota, this should be stated. Are you
 sure that you can make this volume of sales?

 Before signing the purchase contract check if you could
 establish a similar business more cheaply under another
 structure. What does the franchise contract offer you that
 is different? What are you really buying?


 How much assistance will the franchisor offer you to
 establish and maintain the business?

 Does the contract spell out what continuing assistance you
 can expect from the franchisor?

 If the company runs a training school for you and the staff,
 is it properly equipped and does it run acceptable training?
 Find out about the reputation of the training offered before
 you enter the contract. What staff training skills will you
 need to acquire and does the franchisor offer this? Will
 this be at a cost to you or is it covered in the contract or by
 levy?


No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Leasing Commercial Property
Entering a commercial tenancy agreement or lease is a                                                  interested in rent as a proportion of your turnover. Are the
very significant business decision. It is a legally binding                                            two compatible or is negotiation needed?
contract that will affect the value of your business. You
need to fully understand the terms and conditions of the                                               The Retail and Commercial Leases Act 1995 specifies
agreement and what could go wrong before you make a                                                    obligations relating to leases over business premises
commitment. Therefore you should obtain legal advice                                                   at which goods or services are sold or provided to the
before signing.                                                                                        public where the rent is below $250,000 per annum.

Before you sign                                                                                        The Act covers issues such as:
                                                                                                       •      Ensuring that the premises are structurally suitable for
The following information provides some, but by no means                                                      the intended business purpose
all of the issues that you should consider:                                                            •      Ensuring that the lease is available in written form
•     Firstly, do you have a written agreement?                                                        •      When the lease comes into effect
•     Are you dealing with the owner or a tenant?                                                      •      Reviews of current market rent
•     Have you received sufficient information about the                                               •      Maintenance costs
      premises, such as a disclosure statement?
•     Do you know the space available for your exclusive                                               Before leases covered by the Act are entered into or
      use and access for your customers?                                                               renewed, the lessee must be given a disclosure statement
•     Do you know the duration of the lease?                                                           for the lease which is a written document stating required
                                                                                                       information such as the permitted uses of the shop, the
•     Does the agreement have an option to renew?
                                                                                                       lettable area, access arrangements, the basis of the rent
•     What fit out is allowed?                                                                         and a range of other items.
•     Who owns and insures fixtures?
                                                                                                       Make sure that you agree with all the items in the
•     Is a bond/security required?                                                                     disclosure statement because these will become the basis
•     How often and on what basis can the rent be varied?                                              of your agreement.
•     Who actually pays for repairs and maintenance for
      your rented area?                                                                                If the lease is situated in a retail shopping centre, the
                                                                                                       disclosure statement must also state further information
•     Can the lease be assigned to someone else?                                                       including the address of the retail shopping centre; the
•     What about other outgoings?                                                                      number of shops in the retail shopping centre and their total
•     Are you also paying for common areas, general                                                    lettable area; the number of parking bays available for the
      property insurance, rates, levies, advertising?                                                  use of customers of the shop and the number of parking
                                                                                                       bays available for use by the lessee and the lessee's
•     Can you vary your business during the term of the                                                employees.
      lease?
•     Is there a dispute resolution clause?                                                            However, some activities may not be covered under
                                                                                                       the Act, such as wholesale distribution, sporting
•     Are the premises suitable or approved for the intended
                                                                                                       organisations or charities. The Act also does not
      business use?
                                                                                                       cover some other exclusions such as leases of less
•     Are you aware of all your obligations to the landlord?                                           than one month. If in doubt, you should obtain legal
•     Are you aware of all the landlord’s obligations to you?                                          advice to ascertain your status.

The agreement will be written in the interests of the
landlord. What about your interests? The landlord may
work out rent according to floor space. You may be
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Disputes
Even if you have a well structured lease agreement,
disputes may occur. Firstly, check the disputes resolution
clause in your lease and work through the procedure.

For businesses covered under the Retail and Commercial
Leases Act, a party (or former party) to a retail shop lease
may apply to the Commissioner for Consumer Affairs for
mediation of a dispute arising from, or related to, the lease;
or a dispute related to any other matter relevant to the
occupation of the premises or to a business conducted at
the premises. In order to proceed, the other party must
agree to the mediation process. A fee is payable on an
application under this section.

Businesses not covered by the Act should seek legal
advice regarding dispute resolution. Legal action in the
magistrates or District Court may be the only course of
action. You should ascertain the likely cost of this action
before you commence.


Further Information
Office of Consumer and Business Affairs (if you
consider that your business may be covered under the
Retail and Commercial Leases Act 1995)
Third Floor, 91-97 Grenfell Street
ADELAIDE SA 5000
Telephone         1300 138 918
Facsimile         (08) 8204 9570
Website           www.ocba.sa.gov.au


The Law Society of South Australia may also be
able to provide initial legal advice for a small fee.
124 Waymouth Street
ADELAIDE SA 5000
Telephone      (08) 8229 0222
Website        www.lawsocietysa.asn.au




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Insurance                                                                                               Public liability
                                                                                                        Provides insurance cover against accidental injury to
 It is good business management to protect the assets of                                                clients, customers and visitors to your business premises.
 your business (including the owner) against unforeseen                                                This cover is considered essential to all businesses and
 events. This protection usually comes in the form of                                                  cover of up to $5M is normal for a small retail operation.
 insurance.
 An insurance policy may be broadly defined as a contract
 under which the insurer agrees, in return for a premium, to
                                                                                                       Product liability
 indemnify the insured for loss suffered as a result of the                                            This indemnifies the manufacturer and/or distributor against
 occurrence of specified events which cause the                                                        injury caused by their product, or the use of their product.
 destruction, loss or injury of something in which the
 insured has an interest.                                                                              Professional indemnity
 Here is a list of some of the types of business insurance                                             Provides insurance protection against negligence for
 available.                                                                                            professionals and experts delivering services, advice and
                                                                                                       information to clients.
 Building
 Generally only required if you own the premises in which                                              Motor vehicle
 your business is located.                                                                             Vehicles owned and used by the business should be
                                                                                                       insured, as would your own personal vehicles. If you are
 NOTE: It is common for a tenant to be required to insure                                              using your personal vehicle in the business, the insurer
 plate glass against breakage in leased premises.                                                      should be notified so that the policy can be noted.
 If you are conducting a business from your home, the
 insurer of your home should be notified so that the policy
 can be noted and the premium adjusted if necessary.
                                                                                                       Key person
                                                                                                       It is common in small business for the successful operation
                                                                                                       of the business to hinge on the well being of one person.
 Contents                                                                                              Insurance cover can be taken against loss of income, in the
 This should cover all plant, equipment, fixtures and fittings                                         event of injury, disability or death to the key person.
 as well as business stock.
                                                                                                       Workers’ compensation
 Cash                                                                                                  Accident and sickness insurance cover must be provided
 It is possible to insure against theft of cash held on the                                            for employees through an approved insurer. Self-employed
 business premises, in transit or held at home.                                                        persons provide accident and sickness insurance through a
                                                                                                       private insurer.
 Loss of profit
 If your business is unable to trade, due to the occurrence                                            Superannuation
 of an insurable event, this cover can provide for loss of                                             It is important for all people to provide for their retirement
 profits incurred during the period of non-trading. Of course                                          years, including business owners. Superannuation is
 you will have to provide evidence of actual profits lost.                                             generally the vehicle used to provide for a retirement plan.


                                                                                                       For detailed advice and information on the type and cost of
                                                                                                       insurance to best suit your business, you should consult
                                                                                                       reputable insurance agents or brokers. Alternatively, speak
                                                                                                       to your Industry Association for referrals to an agent who
                                                                                                       can provide the right insurance.



No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Ideas & Inventors
 Commercialising a New Idea or                                                                         A TradeMark is a “sign” which distinguishes the goods or
                                                                                                       services of one person or company against their
 Invention                                                                                             competitors.
 New ideas and inventions are the lifeblood of business.                                               A Registered Design is a narrower form of protection than
 So, if you have developed a new idea or have created a                                                a patent. It applies to the shape, configuration, pattern or
 new invention, you have taken the first step towards                                                  ornamentation of a product i.e. the visual rather than
 establishing your new business.                                                                       technological aspects of the product.
 However, most experts agree that the idea or invention is                                             Copyright provides protection for literary, artistic, dramatic
 the easy part, the hard part is successfully                                                          and musical works.
 commercialising it – which is why most new ideas and
 inventions never make it to market.                                                                   Professional advice from a Patent & TradeMark Attorney is
                                                                                                       recommended although it is possible to apply for and
 Statistics reveal that 60% of businesses fail in the first                                            register the appropriate intellectual property protection
 three years; and that of all companies or individuals                                                 yourself.
 seeking external capital only 2 – 4% achieve it. In other
 words, your idea or invention is not a “licence to print
 money” – it is more likely to cost you time and money, and                                            Product Design & Development
 cause you frustration and disappointment.                                                             Most inventions undergo significant development from
 For those who are committed to their idea or invention,                                               initial idea to final product.
 however,    there      are    proven  steps    towards                                                How developed is your idea? Is it just an idea, or do you
 commercialisation, including:                                                                         have detailed design drawings, even a working prototype?
 •     intellectual property protection                                                                If it is just an idea, how do you know it will actually work? If
 •     product design and development                                                                  you have a prototype, how extensively has it been tested?
 •     business plan including company structure                                                       Can it be improved or made more efficient? What further
 •     marketing strategy                                                                              innovation is possible and what other applications could the
 •     financing the business                                                                          product be used for? What method of manufacturing and
 •     Government assistance programs.                                                                 what materials should be used?
 This BIZFACT briefly                       outlines         these        steps        to              If you don’t have the expertise or resources to address
 commercialisation.                                                                                    these issues, specialised design and engineering firms can
                                                                                                       help.
 Intellectual Property Protection
 If your idea or invention is genuinely new and original, you                                          Preparing a Business Plan
 need to protect your intellectual property in order to                                                If your idea or invention cannot be produced profitably, then
 prevent your competitors from copying it.                                                             you do not have a business. The time to find that out is
 Intellectual property protection can include:                                                         before you start, not after you have invested your life
 •    Patents                                                                                          savings. It is important to prepare a Business Plan.
 •    Trade Marks                                                                                      The Business Plan should include:
 •    Designs                                                                                           •   executive summary
 •    Copyright.                                                                                        •   business structure and background
 A Patent may be granted to a technological innovation                                                  •   product/service description
 that is genuinely novel and inventive. It provides exclusive                                           •   competitor analysis
 rights for 20-years, after which the technology can be used                                            •   research and development status
 by anyone.                                                                                             •   manufacturing
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
 •      marketing                                                                                       Independent marketing advice is recommended, because
 •      management                                                                                      too often the owners of the idea or invention are too close
 •      financials                                                                                      to it to be objective.
 •      appendices, as applicable.
 A Business Plan is particularly important if you intend to                                             Finance & Capital Raising
 raise finance or external capital for your venture.                                                    The Business Plan will identify the capital required to
 Professional advice from an Accountant or Business                                                     launch the business. Sources of capital include:
 Consultant is recommended, although do-it-yourself books                                               •   Your own equity – your and/or your family’s savings
 and software programs are available.                                                                   •   Debt – bank or other external finance, for which you
                                                                                                            would usually have to provide security, typically the
 Marketing Strategy                                                                                         family home
                                                                                                        •   Seed and/or venture capital – capital provided by
 Marketing is arguably the most important part of the                                                       external investors in return for equity in the business.
 Business Plan and should therefore also be addressed
 separately.                                                                                            This is the “moment of truth” – are you prepared to risk
 Is there a market for your product or service? Who will                                                your own financial position, and/or are you prepared to
 buy it? At what price? How will it be distributed and sold?                                            give up (some) control to external investors? The detailed
 What benefits does it offer compared to its competitors?                                               planning process recommended will assist you to make
 How will it be packaged, promoted and advertised?                                                      these important decisions.
 Is there any market data available, for example the size of                                            Is there Another Way?
 the market and the market shares of your competitors?
 What market share can you product or service capture and                                               If you do not wish to start a business or you are unable to,
 why? Should you commission your own market research?                                                   you may seek to sell your idea or invention. This could be
                                                                                                        done either as an outright sale, or as a licensing
 It doesn’t matter how good your product or service is, if it                                           agreement in return for royalty payments. Professional
 cannot be sold your business will fail. So marketing is also                                           advice is recommended in either case.
 important.
 Export marketing should also be analysed, although this
 also introduces new pitfalls including cultural differences,
 exchange rate and freight costs, import controls and                                                  Further Information
 international competition.       You might also choose a                                              For more information on commercialising your
 different distribution strategy for export markets.                                                   new ideas and inventions, contact Department of
 In these days of an increasingly global economy however,                                              Trade and Economic Development on
 export offers opportunities that the Australian market                                                1800 188 018
 simply cannot offer due to its limited size.




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Help for small business
When planning your business, these agencies may be able to help:
 Statistical Information / Consultancy Service                                                         Consumer information, publications information about
 Australian Bureau of Statistics                                                                       Fair Trading Act
 Level 9
 ANZ House                                                                                             The Office of Consumer & Business Affairs
 11 Waymouth Street                                                                                    Chesser House
 ADELAIDE SA 5000                                                                                      91 – 97 Grenfell Street
                                                                                                       ADELAIDE SA 5000
 Telephone                 1300 135 070 (National)
 Facsimile                 1300 135 211                                                                Free Call                   1300 138 918
 E-mail                    client.services@abs.gov.au                                                  Facsimile                   (08) 8204 9769
 Web                       www.abs.gov.au                                                              Country Callers             13 18 82
                                                                                                       E-mail                      metro.cab@agd.sa.gov.au
                                                                                                       Web                         www.ocba.sa.gov.au
Dial-A-Statistic (recorded information cost 77c per minute)
Telephone          1900 986 400                                                                        Legal Service Directory ($22 for 20 minutes Advisory
                                                                                                       Service, by appointment only)

 Commonwealth Government Acts of Parliament,                                                           Law Society of SA
 Books and Publications                                                                                124 Waymouth Street
                                                                                                       ADELAIDE SA 5000
 Aust. Govt. Information Management Office
 John Gorton Building                                                                                  Telephone                   (08) 8229 0222
 PARKES ACT 2600                                                                                       Fax                         (08) 8231 1929
 Web               www.publications.gov.au                                                             E-mail                      email@lawsocietysa.asn.au
                                                                                                       Web                         www.lssa.asn.au
 Short Training Courses in Business Management                                                         Award Information, Safe Workplace Advice, Trading
 Small Business Training Centre                                                                        Hours
 TAFESA, Adelaide City Campus                                                                          SafeWork SA
 120 Currie Street                                                                                     Level 3
 ADELAIDE SA 5000                                                                                      1 Richmond Road
 Telephone                 (08) 8410 0000                                                              KESWICK SA 5035
 Facsimile                 (08) 8410 0633                                                              Telephone                   1300 365 255 or (08) 8303 0400
 E-mail                    sbtc@tafesasouth.org                                                        Facsimile                   (08) 8303 0277
 Web                       www.sbtc.sa.edu.au                                                          E-mail                      help@safework.sa.gov.au
                                                                                                       Web                         www.safework.sa.gov.au
 List of Trade Associations, Trade Exhibitions and
 Fairs, Training etc                                                                                   Worker’s compensation, safe workplace guidance,
                                                                                                       Occupational Health & Safety advice
 Business SA
 136 Greenhill Road                                                                                    WorkCover Corporation
 UNLEY SA 5061                                                                                         100 Waymouth Street
                                                                                                       ADELAIDE SA 5000
 Telephone                 (08) 8300 0000
 Facsimile                 (08) 8300 0001                                                              Telephone                   13 18 55
 Free Call                 1800 088 105                                                                TTY                         (08) 8233 2574
 E-mail                    enquiries@business-sa.com                                                   Facsimile                   (08) 8233 2211
 Web                       www.business-sa.com                                                         E-mail                      info@workcover.com
                                                                                                       Web                         www.workcover.com
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
 For Certain Aspects of Planning (however, local councils                                               Businesses in Financial Difficulty
 handle most planning and zoning queries)
                                                                                                        Business Helpline
 Planning SA                                                                                            Telephone        1300 360 306
 Roma Mitchell House
 136 North Terrace                                                                                      Service available 9.00am – 3.30pm weekdays
 ADELAIDE SA 5000
 Telephone                 (08) 8303 0600
 Facsimile                 (08) 8303 0782
                                                                                                       Information about Trade Practices Act and Authorised
 Web                       www.planning.sa.gov.au
                                                                                                       Codes of Practice
                                                                                                       Australian Competition & Consumer Commission
                                                                                                         th
                                                                                                       14 Floor, 13 Grenfell Street
 Advice, information and appointments on all aspects                                                   ADELAIDE SA 5000
 of small business
                                                                                                       Telephone                   (08) 8213 3444
 Department of Trade and Economic Development,                                                         Facsimile                   (08) 8410 4155
 Business Enterprise Centre Network and Regional                                                       Web                         www.accc.gov.au
 Development Boards

 Telephone:                1800 188 018
                                                                                                       Find a CPA close to you
 E-mail                    dtedinfo@state.sa.gov.au
 Web                       www.southaustralia.biz                                                      CPA Australia
                                                                                                       280 Pultney Street
                                                                                                       ADELAIDE 5000

 Quality Standards applicable to various goods and                                                     Telephone                   (08) 8232 3188
 services                                                                                              Facsimile                   (08) 8232 3194
                                                                                                       E-mail                      sa@cpaaustralia.com.au
 SAI Global Limited                                                                                    Web                         www.cpaaustralia.com.au
 GPO Box 5420
 SYDNEY NSW 2001

 Adelaide Preferred Re-seller:                                                                         Equal opportunity information, training and
 Standards & Technical Publications                                                                    consultancy services
 45d Sussex Terrace
 HAWTHORN SA 5062                                                                                      The Equal Opportunity Commission
                                                                                                       Level 2, ING Building
Toll Free                  1300 654 646                                                                45 Pirie Street
Facsimile                  1300 654 949                                                                ADELAIDE SA 5000
E-mail                     sales@saiglobal.com.au                                                      Telephone                   (08) 8207 1977
Web                        www.standards.com.au                                                        TTY                         (08) 8207 1911
                                                                                                       Facsimile                   (08) 8207 2090
                                                                                                       Toll Free                   1800 188 163 (country callers)
                                                                                                       E-mail                      eoc@agd.sa.gov.au
 SA Government Information and Services including                                                      Web                         www.eoc.sa.gov.au
 Acts of Parliament, Industrial Awards and other State
 publications
 Service SA Government Legislation Outlet
 101 Grenfell Street                                                                                   Library – Business Collection
 ADELAIDE SA 5000                                                                                      Adelaide City Council Library and Community Centre
 Telephone                 13 23 24                                                                    235 Hutt Street
 E-mail                    servicesa@saugov.sa.gov.au                                                  ADELAIDE SA 5000
 Web                       www.service.sa.gov.au
                           www.shop.service.sa.gov.au                                                  Telephone                   (08) 8203 7203
                                                                                                       E-mail                      libcc@adelaidecitycouncil.com
 Visit a Service SA Customer Service Centre located at:                                                Web                         www.adelaidecitycouncil.com/library

 Adelaide                  Berri                      Gawler                                           Other useful sources to contact include: public libraries
 Kadina                    Mt Gambier                 Murray Bridge                                    trade associations, local councils and TAFE institute
 Naracoorte                Port Augusta               Port Lincoln                                     libraries.
 Port Pirie                Whyalla




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Business Enterprise Centre Network contact details
 Eastside BEC                                                                                          Inner West BEC
 Unit 2, 294 Payneham Road                                                                             Adelaide University Research Park
 PAYNEHAM SA 5070                                                                                      Ground Floor, 30-32 Stirling Street
 (PO Box 4017, Norwood South SA 5067                                                                   THEBARTON SA 5031
                                                                                                       (PO Box 160, Torrensville Plaza SA 5031)
 Telephone                 (08) 8132 0377
 Facsimile                 (08) 8132 0985                                                              Telephone                   (08) 8159 8700
 E-mail                    admin@eastsidebec.com.au                                                    Facsimile                   (08) 8159 8711
 Web                       www.eastsidebec.com.au                                                      E-mail                      iwbec@bec.org.au
                                                                                                       Web                         www.bec.org.au
 Mr Mike Hawkins, Manager
                                                                                                       Ms Susan Devine, Manager

 Enterprise Adelaide
                                                                                                       Northern Adelaide BEC
 25 Pirie Street
 ADELAIDE SA 5000                                                                                      95 Womma Road
 (GPO Box 2252, Adelaide SA 5001)                                                                      ELIZABETH WEST SA 5113

 Telephone                 (08) 8203 7815                                                              Telephone                   (08) 8256 0900
 Facsimile                 (08) 8203 7575                                                              Facsimile                   (08) 8256 0999
 E-mail                    admin@enterpriseadelaide.com.au                                             E-mail                      admin@nabec.com.au
 Web                       www.enterpriseadelaide.com.au                                               Web                         www.nabec.com.au

 Ms Anne McCutcheon, Manager                                                                           Mr Ron Watts, Manager



 Inner Southern BEC                                                                                    Gawler BEC
 903b South Road                                                                                       2 Lyndoch Road
 CLARENCE GARDENS SA 5039                                                                              GAWLER SA 5118

 PO Box 139                                                                                            Telephone                   (08) 8256 0930
 PARK HOLME                 SA 5043                                                                    Facsimile                   (08) 8256 0999
 Telephone                 (08) 8351 0227                                                              E-mail                      admin@nabec.com.au
 Facsimile                 (08) 8351 0340                                                              Web                         www.nabec.com.au
 E-mail                    admin@isbec.com.au
 Web                       www.isbec.com.au                                                            Mr Larry Cavallaro, Manager

 Mr Alan Amezdroz, Manager
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Salisbury Business and
Export Centre
Innovation House West
Technology Park
MAWSON LAKES SA 5095
(PO Box 8, Salisbury SA 5108)

Telephone                  (08) 8260 8205
Facsimile                  (08) 8260 8206
E-mail                     sbec@salisbury.sa.gov.au
Web                        www.salisbury.sa.gov.au

Mr David Penfold, Manager



 Southern Success BEC
 Unit 5, 209 Main South Road
 MORPHETT VALE SA 5162
 (PO Box 175, Morphett Vale SA 5162)


 Telephone                 (08) 8326 6511
 Facsimile                 (08) 8326 6922
 E-mail                    success@ssbec.com.au
 Web                       www.ssbec.com.au

 Mr Alan Edmond, Manager



 Tea Tree Gully BEC
 North East Development Agency
 114 Tolley Road
 ST AGNES SA 5097

 Telephone                 (08) 8397 9555
 Facsimile                 (08) 8397 9599
 E-mail                    admin@neda.asn.au
 Web                       www.bec.neda.asn.au

 Ms Petrina Jude, Manager



 North West Business Development
 Centre
 Todd Street Business Chambers
 6 – 8 Todd Street
 PORT ADELAIDE SA 5015

 Telephone                 (08) 8440 2440
 Facsimile                 (08) 8440 2442
 E-mail                    admin@nwbusiness.com.au
 Web                       www.nwbusiness.com.au

 Ms Lynette Hay, General Manager


No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Business Advisers in Regional Areas
 Adelaide Hills                                                                                         Kangaroo Island
 David Harvey                                                                                           Jason Mattock
 Adelaide Hills Regional Development Board                                                              Kangaroo Island Development Board
 38 Adelaide Road                                                                                       2 Kingscote Terrace
 MOUNT BARKER SA 5251                                                                                   KINGSCOTE SA 5223
 Telephone:                (08) 8391 1374                                                               Telephone:                 (08) 8553 3211
 E-mail:                   admin@adelaidehills.com.au                                                   E-mail:                    kidb@kin.net.au
 Website:                  www.adelaidehills.com.au                                                     Website:                   www.kangarooisland.org

 Barossa                                                                                               Mid North
 Naomi Mashford                                                                                        Alan Schwarz
 Barossa Light Development                                                                             Mid North Regional Development Board
 2 Elizabeth Street                                                                                    Unit 2, 17 Lennon Street
 TANUNDA SA 5352                                                                                       CLARE SA 5453
 Telephone:                (08) 8563 3603                                                              Telephone:                  (08) 8842 3115
 E-mail:                   bld@bld.org.au                                                              E-mail:                     info@mnrdb.com.au
 Website:                  www.bld.org.au                                                              Website:                    www.mnrdb.com.au

 Eyre                                                                                                  Murraylands
 Heidi Woodstock                                                                                       Darryl Webb
 Eyre Regional Development Board                                                                       Murraylands Regional Development Board
 89 Liverpool Street                                                                                   137 Adelaide Rd
 PORT LINCOLN 5606                                                                                     MURRAY BRIDGE SA 5253
 Telephone:                (08) 8682 6588                                                              Telephone:                  (08) 8535 7170
 E-mail:                   reception@erdb.org.au                                                       E-mail:                     information@murraylands.org.au
 Website:                  www.erdb.org.au                                                             Website:                    www.murraylands.org.au

 Fleurieu                                                                                              Northern
 Mark Heinrich                                                                                         Robert Gibb
 Fleurieu Regional Development Corporation                                                             Northern Regional Development Board
 3 Eyre Terrace                                                                                        Lot 500, Stirling Street
 VICTOR HARBOR SA 5211                                                                                 PORT AUGUSTA SA 5700
 Telephone:                (08) 8552 1557                                                              Telephone:                  (08) 8641 1444
 E-mail:                   info@frd.org.au                                                             E-mail:                     reception@nrdb.com.au
 Website:                  www.frd.org.au                                                              Website:                    www.nrdb.com.au

 Emergency Management Business Adviser: Bruce Green




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Port Pirie
Craig Blieschke
Southern Flinders Ranges Development Board
85 Ellen Street
PORT PIRIE SA 5540
Telephone:                 (08) 8632 5633
E-mail:                    board@sfrdb.com.au
Website:                   www.sfrdb.com.au



Riverland
Cindy Hunt
Riverland Development Corporation
6 Kay Avenue
BERRI SA 5343
Telephone:                 (08) 8580 8500
E-mail:                    rdc@riverland.net.au
Website:                   www.riverlandonline.com

South East
Roger Babolka
Limestone Coast Regional Development Board
Old Town Hall Building
Commercial Street East
MOUNT GAMBIER SA 5290
Telephone:                 (08) 8723 1057
E-mail:                    info@lcrdb.com
Website:                   www.lcrdb.com

Whyalla
Matt Sloan
Whyalla Economic Development Board
127 Nicolson Avenue
WHYALLA NORRIE SA 5608
Telephone:                 (08) 8645 7811
E-mail:                    reception@wedb.com.au
Website:                   www.wedb.com.au

Yorke
David Cowell
Yorke Regional Development Board
31 Hallett Street
KADINA SA 5554
Telephone:                 (08) 8821 1099
E-mail:                    reception@yorkeregion.com.au
Website:                   www.yorkeregion.com.au




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Going into business checklist
1. PRELIMINARY – KNOW YOURSELF                                                                         2. MARKET RESEARCH
Maybe you should ask a friend for their assessment of                                                  Feasibility Study
you using these questions.
                                                                                                       You should research thoroughly:
Why do you want to go into business?
                                                                                                       •     The industry you are entering
•    Are you unhappy in your present position?                                                         •     Your product or service
•    Have you been retrenched and want to ‘buy a job’?                                                 •     The potential market
•    Have you seen an opportunity of which you can take                                                •     Competitors
     advantage?                                                                                        •     Sources of supply
•    You need to be convinced that by going into business                                              •     Staffing requirements
     you will be better off than staying in employment.
                                                                                                       Sensitivity Analysis
Are you the right type to run a business?
                                                                                                       •     The likely outcomes of changes in turnover, in prices
•    Can you deal with the demands – long hours, staff                                                       and in costs should be explored.
     problems, complaints?
•    Can you persevere when things get tough?                                                          Business Plan
•    Can you exercise self-discipline?
                                                                                                       •     It is strongly recommended that a business plan be
Do you understand the business you are going into?                                                           prepared which will incorporate the above two items as
                                                                                                             well as a range of other information that will help you to
•    Do you have the necessary experience and/or                                                             plan ahead. If finance is required, potential lenders will
     qualifications?                                                                                         demand to see a business plan.

What are your chances for success?                                                                     3. LEGAL STRUCTURE DECISION
•    Other than enthusiasm, what do you have that will                                                 Under which of the following legal structures will the
     make the business successful?                                                                     business be operated? You may need the advice of an
                                                                                                       accountant or solicitor to help you choose.
Can you afford the financial risk?
                                                                                                       •     Sole trader
•    Do you have the financial resources to commence or                                                •     Partnership
     acquire the business and to continue to operate it?                                               •     Company
                                                                                                       •     Trust
Do you have the support of your family or others
dependant upon you?                                                                                    4. LEGAL STRUCTURE IMPLEMENTATION
•    Are the people closest to you in agreement with your                                              Partnership Agreement
     plans?
                                                                                                       •     This may be a simple written memorandum of
Have you undertaken any business training?                                                                   understanding between the partners setting out their
                                                                                                             respective rights, obligations and duties or it may be a
•    Have you attended any small business intenders’                                                         more formalised agreement prepared by a solicitor.
     courses or done any other preparation?                                                            •     If you do not have a partnership agreement, then the
                                                                                                             Partnership Act will apply.
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Company Formation or Purchase                                                                          •     How will the equipment be acquired – by purchase,
                                                                                                             lease, hire-purchase?
•    A solicitor or accountant can form a company for you or
                                                                                                       •     Has a lease/buy analysis been done?
     you may purchase one that has already been created.
                                                                                                       •     Is finance required and is it available?
•    Shelf companies that have not previously traded may
                                                                                                       •     What security does the lender require?
     be acquired through an accountant, a solicitor or from a
     company that markets them.                                                                        •     Has a feasibility study been done indicating that the use
                                                                                                             of the equipment will fully justify operating costs,
•    You can apply to Australian Securities and Investment
                                                                                                             including servicing and maintenance, insurance and
     Commission for registration of a company, but you must
                                                                                                             safety requirements?
     be confident that you understand what is involved in
     being a Company Director.                                                                         •     How dependant will the business be on the equipment?
                                                                                                       •     Is there a disaster plan including alternative facilities in
Business Name Registration                                                                                   the case of a major breakdown?

•    If using a business name it must be registered in each                                            Support Equipment
     of the states and territories in which you propose to
     carry on business.                                                                                •     What are your requirements for office furniture,
                                                                                                             telephone, fax, answering machine, computers,
Trademark or Patent Registration                                                                             photocopiers or any other electrical equipment?
                                                                                                       •     Has lease/buy analysis been done?
•    To ensure that no one else can take advantage of your
                                                                                                       •     Is the necessary expertise available to install and
     business name, product name or design it may be
                                                                                                             operate computer systems, etc.?
     necessary to apply for a trademark or patent.
                                                                                                       •     Is outside assistance necessary to choose the most
•    It may be advisable to seek the assistance of a patent
                                                                                                             suitable hardware and software?
     attorney

                                                                                                       Motor Vehicles
Franchise Agreement
•    If operating under a franchise it is advisable to consult                                         •     What vehicles are available or need to be acquired?
     an accountant and/or solicitor before signing any                                                 •     Select on the basis of suitability and affordability.
     agreement.                                                                                        •     Has lease/buy analysis been done?

                                                                                                       Inventories
Contracts
•    Legal advice should be sought before signing any                                                  •     If stocks of goods are to be acquired from a vendor, has
     contract, purchase agreement, lease or other legal                                                      a valuation been arranged?
     document.                                                                                         •     Does inventory include any slow-moving or obsolete
                                                                                                             stock?
5. PHYSICAL REQUIREMENTS                                                                               •     Are the right levels of stock maintained?
                                                                                                       •     Will good stock control procedures be put into place to
Location                                                                                                     ensure optimum levels are maintained?

•    Are the business premises situated in a location which
     suit the market you are targeting?                                                                Consumables
•    Have you done a study of all the available plans for the
     future of the area to ensure there are no potential                                               •     What aids to manufacture or other consumables are
     problems eg. Restricted access?                                                                         required?

                                                                                                       6. PLAN FUNDING NEEDS
Space Requirements
•    Do you have enough space for your immediate needs                                                 Capital and Recurrent Budgets
     and for the foreseeable future?
•    Is there an adequate loading bay if one is needed?                                                •     Have budgets been prepared estimating what funds will
•    Is parking available for customers and staff?                                                           be needed to commence or purchase the business, to
                                                                                                             acquire necessary assets and to provide working
                                                                                                             capital to operate the business?
Services
                                                                                                       Cash Flow Forecasts
•    Are electricity, water, telephone and gas services
     available?
                                                                                                       •     Have cash flow forecasts been prepared on a monthly
•    Are they reliable?
                                                                                                             basis for at least the next twelve months?
•    Does the building meet your requirements for computer
     and telephone connections and cabling?
                                                                                                       Profit Projections
•    Is there enough light?
                                                                                                       •     Have profit and loss budgets been prepared on a
Major Equipment                                                                                              monthly basis for at least the next twelve months?
•    Do you have, or can you acquire at the right price, the
     plant and equipment your business will need?
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
7. SOURCE OF FUNDS                                                                                     Professional Associations
                                                                                                       •     Is it necessary or advisable to belong to an industry
Personal Contributions
                                                                                                             association?
•    How much cash is available from personal resources
     and how much can be raised by the sale of assets etc.?
                                                                                                       9. MARKETING

Family Involvement                                                                                     Analysis

•    If funds or physical assistance are to be provided by                                             •     Have you identified any advantages you may have over
     family members, their duties, responsibilities and rights                                               your competitors?
     of each person involved should be agreed in writing.                                              •     Has your target market been specified – who are your
                                                                                                             potential customers, where are they?
External Investor                                                                                      •     Is it advisable to seek marketing advice?

•    Can an external party be induced to introduce equity by                                           Advertising
     way of partnership, joint venture, share subscription
     etc.?                                                                                             •     To what extent is advertising necessary in your
                                                                                                             industry?
Bank or Other Lender                                                                                   •     Has an advertising budget been worked out?
                                                                                                       •     Has the target audience been identified?
•    If monies need to be borrowed, what security is
     offered?                                                                                          •
•    Have likely interest charges been included in the cash                                            Pricing Policy
     forecast and profit budget?
•    Has an application for business finance been prepared                                             •     Has a break-even analysis been done?
     for submission to prospective lenders?                                                            •     Has a price been set and compared with that of
•    Has your accountant been consulted before any                                                           competitors?
     approach is made to lenders?
                                                                                                       10.           STAFFING
Lease/Purchase Alternatives for Land and Business
                                                                                                       Personnel
•    Has a lease/buy analysis been done to see whether
     leasing, hire purchase or direct purchase is the best                                             •     How many staff will be required and at what levels of
     way to acquire assets?                                                                                  experience?
                                                                                                       •     How will they be recruited?
8. PARTICULAR INDUSTRY REQUIREMENTS                                                                    •     Are apprenticeships to be offered and if so, through
                                                                                                             what scheme?
                                                                                                       •     Can government incentives to employ staff be utilised?
Trust Accounts
                                                                                                       •     What training will be necessary?
•    Is your industry required by a law or by your
     professional association to maintain trust accounts and                                           Working Hours
     to have them audited?
•    What requirements cover the earning of interest on trust                                          •     What hours are staff required to work?
     accounts?                                                                                         •     Will overtime be paid?
                                                                                                       •     How many permanent, part-time and casual staff will be
                                                                                                             needed?
Insurance Compensation Funds
•    Are you required by government or professional                                                    Remuneration
     association regulation to carry professional indemnity or
     public liability insurance or to contribute to any industry                                       •     Will employees be paid on a time or piece-work basis?
     compensation fund?                                                                                •     Will commission be paid?
                                                                                                       •     What incentives will be offered?
Labelling                                                                                              •     Will salary packages be negotiated and, if so, has fringe
                                                                                                             benefits tax been included in calculations?
•    What information is required by law to be shown on                                                •     Has the cost of the packages, including purchase and
     labels attached to your products?                                                                       maintenance of motor vehicles etc. been carefully
                                                                                                             estimated?
Contracts
                                                                                                       Award Requirements
•    Are there legal or ethical rules that require a standard
                                                                                                       •     Has reference been made to all appropriate industrial
     form of contract to be used within the industry?
                                                                                                             awards or relevant advice otherwise obtained so that all
                                                                                                             conditions of employment are fully understood?




No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
Other Legislation                                                                                      •     Business Name
                                                                                                       •     Australian Business Number
•    Are the requirements of the Superannuation Guarantee
                                                                                                       •     Tax File Number
     Levy Act, Occupational Health & Safety Act, Payroll Tax
     Act, Workers Rehabilitation and Compensation Act and                                              •     Group Employer
     the group tax provisions of the Income Tax Assessment                                             •     Fringe Benefits Tax
     Act fully understood or has appropriate advice been                                               •     Payroll Tax
     received from an accountant or solicitor?
                                                                                                       Government Charges

                                                                                                       •     Have all relevant charges been considered such as
11.          INSURANCE                                                                                       stamp duties on purchase of business and on transfer
                                                                                                             of assets, rates and taxes, land taxes etc.?

The following insurances should be considered. It may be                                               14.           RECORD KEEPING
necessary to consult an insurance broker.
                                                                                                       Accounting System
•    Building
•    Professional Indemnity                                                                            •     What accounting system needs to be put into place?
•    Contents                                                                                          •     Will it be computerised or handwritten?
•    Motor Vehicle                                                                                     •     What sort of information will it produce and is that
•    Commercial (theft, fire, cash, plate glass etc.)                                                        information relevant and sufficient for your needs?
•    Personal Disability                                                                               •     What training is necessary to understand the system?
•    Workers’ Compensation                                                                             •     Will qualified staff need to be employed?
•    Loss of Profits                                                                                   •     Has advice been sought from your accountant?
•    Key Person
•    Fidelity                                                                                          Secretarial
•    Superannuation
•    Public Liability                                                                                  •     If you are operating under a company, who will maintain
•    Retirement Planning                                                                                     the secretarial records and comply with the reporting
•    Product Liability                                                                                       requirements if the Corporations Law?
•    Buy/Sell Agreements
                                                                                                       15.           BUYING AN EXISTING BUSINESS
12.          LOCAL GOVERNMENT
             REQUIREMENTS                                                                              Purchase Price
                                                                                                       •     Financial statements for the previous three years and, if
Lease Purpose Clause                                                                                         possible, income tax returns should be obtained from
                                                                                                             the vendor and checked by your accountant who will
•    Will the proposed activity at the proposed location be                                                  suggest a reasonable purchase price. This may include
     permitted under local government regulations?                                                           an element of goodwill.
                                                                                                       •     Stamp duties and other acquisition costs should be
Zoning Requirements                                                                                          considered.
•    What requirements need to be satisfied in order to                                                Assets
     commence business at the proposed address?
•    Has the local government authority been consulted                                                 •     Assets to be acquired should be specified in writing and
     concerning future re-zoning plans?                                                                      their values checked by reference to their importance
                                                                                                             by an experienced valuer.
Health/Environment Regulations                                                                         •     It may be advisable to have a professional stock-taker
                                                                                                             value inventories.
•    What regulations cover health and environmental                                                   •     If purchasing shares in a company rather than its
     aspects of the proposed activity?                                                                       assets and business, legal and accounting advice is
                                                                                                             essential.
13.          REGISTRATIONS AND LICENSING
                                                                                                       Contract of Sale
Business Licenses                                                                                      •     A solicitor experienced in commercial matters should be
                                                                                                             retained to advise on the terms of the contract.
•    Has the Business Licence Information Service been
     contacted to determine what regulations cover the                                                 Transfer of Title of Assets, Including Motor Vehicles
     proposed activity and what permits and approvals are
     required?                                                                                         •     What procedures are necessary to transfer titles?
                                                                                                       •     It may be necessary to consult a solicitor.
Are registrations required in respect to any of the
following?
•    Company Formation or Acquisition
No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au
16.          OTHER SOURCES OF INFORMATION                                                              Have you considered all the possible consequences of
                                                                                                       business failure?
                                                                                                       • Do you understand that, in the worst case, you might
State and Territory Advisory Services                                                                     lose most of your possessions, including the family
•    Each State Government operates a service providing                                                   home?
     advice to small business and those intending to
     commence business. They also act as a referral centre                                             Further Information
     to courses in small business management, publications
     and professional advisers, and can provide access to                                              Call 1800 188 018 to talk to an
     the Business Licence Information Service.                                                         Information Officer. If you would like to
                                                                                                       make a free appointment with a Business
                                                                                                       Adviser in your local area, ask an
Accountants                                                                                            Information Officer for details of your local
•    The accountancy profession provides much more than                                                centre.
     just preparation of income tax returns. Your accountant
     is able to help you at every stage, from commencement
     of the business through to ongoing involvement in
     management.
•    You should ensure that your accountant is a member of
     one of the major accounting bodies.

Solicitors
•    A solicitor experienced in commercial matters should be
     consulted before signing any contract or legal
     agreement.

Courses
•    A number of educational institutions offer courses in
     various aspects of small business management. A
     listing is available from your State Government’s small
     business centre.

Publications

•    Your local library’s catalogue should include titles on
     small business.
•    Some banks and other institutions publish handy guides
     for small business.
•    The internet is a great source of information.

17.          FINAL REVIEW
Do you understand that things could go wrong and
business could fail?

Are you aware of the factors that could contribute to
business failure?

•    Undercapitalisation – not having sufficient funds to
     continue operating
•    Too much debt – inability to service debt capital
•    Inadequate cash flow
•    Insufficient range of products, customers or suppliers
•    Poor record keeping and inadequate management
     information
•    Poor management skills, including inexperience
•    Lack of planning and inability to adapt to changing
     circumstances
•    Poor credit control and inadequate debt collection
     methods
•    Stock levels too high or slow moving
•    Ill health of principals or key employers, loss of key
     managers


No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this
service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.


Department of Trade and                  GPO Box 1264                         T +61 8 8303 2400 or                   F +61 8 8303 2410                         ABN 83 524 915 929
Economic Development                     ADELAIDE SA 5001                     1800 188 018 (freecall)                E dtedinfo@state.sa.gov.au

				
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