Finding the right information is an important first step to starting a new commercial business. The accuracy of this information plays a major role in the future successes of the business.
Projex Group has created a comprehensive checklist for future business owners, covering all the basic requirements for starting a new business.
1. Researching the business idea
A thorough research of the business environment before starting will help the person assess whether there is indeed a market for their product and/or service. This can be achieved by conducting a survey/market research; analysing competitors; and analysing the specific industry using the Australian Bureau of Statistics (ABS) website, IBIS World industry reports, business benchmarks, and local libraries.
2. Developing a business plan
A business plan is essential for any business, and should cover business goals; SWOT analysis; industry research; marketing plan; operations/management plan; and financial plan. The business plan should be reviewed on a regular basis to ensure the success of the company.
3. Financing the business
The amount of money needed to open a new business depends on the type of business and the business owner’s financial strength and capability to borrow. Establishment and operating expenses will also need to be considered during the planning stage. One may explore banks or financial institutions for financing the business. The business/ business owner may also be eligible for government grants and assistance.
For more information on business finances, visit Business.gov.au.
4. Choosing the business structure
There are four main business structures:
Sole trader: The business has no separate legal existence from its owner and can be run using a business name or the owner’s name. As a sole trader, the owner is responsible for the liabilities of the business.
Partnership: A partnership involves two or more people starting a business who can legally share profits, risks, and losses according to the partnership agreement.
Trust: A trust is where a business is transferred to a third party who then has legal control and a duty to run that business in order to benefit another party.
Company: A proprietary limited company (Pty Ltd) is the most common type of company used by small businesses. It has more regulatory requirements, and is a legal entity separate from its shareholders/owners.
Consult with a qualified business, financial or legal advisor to choose the right business structure.
5. Registering your business
There are regulatory requirements for starting a business, including registering the following:
Business name: The business name can be registered at the Australian Securities and Investments Commission (ASIC) website.
Business name as a trade mark: If the business name is going to be used as a means to distinguish the products and/or services from that of other businesses, visit IP Australia to apply for a trade mark.
Goods and Services Tax (GST): A GST registration is required if annual sales are expected to be more than $75,000.
Australian Business Number (ABN): An ABN registration is required if the business registers for GST.
Tax File Number (TFN): Sole traders can use their personal TFN while a partnership, company, or trust should apply for a separate TFN.
6. Finding the right premises
Consider these parameters when looking for a commercial business premises:
Location: Do you need to be located close to your customers or suppliers?
Essential features: Are you satisfied with the size, street frontage, showrooms and parking?
Lease or purchase: Do you plan on leasing or purchasing your premises?
Security: Do the fencing, gates, lighting, entrances and exits meet your requirements?
7. Setting up the business premises
The first step to setting up the business premises is to get the necessary approvals. All states and territories have various business licences and permits, and approval requirements may differ based on the nature of the business. The Australian Business Licence and Information Service (ABLIS) website is a useful resource for checking what planning or building licences/permits are needed.
Additionally, check with the local council about their planning permit process; zoning and health regulations; and process, if required, to lodge a Development or Building Application before the business can start operations.
When setting up the business premises, consider hiring a registered building surveyor and a registered builder/building practitioner from the local area. When making modifications to a leased premises, discuss the changes with the landlord and get their approval first before proceeding with the changes.
8. Insuring the business
An important requirement for setting up any business is to have the right insurance in place to protect the business in the event of an incident or mishap. A business is advised to have fire/accident insurance; theft insurance; assets and revenue insurance; public and/or product liability insurance; workers’ compensation insurance; compulsory third party (CTP) insurance, business interruption/income insurance; and business vehicle insurance.
9. Securing the premises
Securing the business premises can prevent serious injuries, accidents and crimes. Develop a security plan detailing security measures, such as: Creating a safe building design and layout; Finding the hazards in the workplace, assessing the risks of these hazards, and then removing or controlling the risks; Ensuring the safety of personnel, intellectual property (IP), stocks, and data and IT systems; Having an incident response plan and a business continuity plan; Reporting notifiable incidents, e.g. death, serious injury/illness, or a dangerous incident; Introducing a cash management system if staff handles cash every day; Installing security devices, e.g. alarms, CCTV cameras, security gates, etc.; Training staff on robbery response, cash handling and minimising theft; Taking staff through a work health and safety induction; and Developing a code of conduct for the business..
10. Weatherproofing the business
The following areas of a building need to be waterproofed: flat roof, balcony, terrace, podium deck, retaining walls, planter boxes, basements, lift pits, cellars, expansion joints, water tanks, ponds, fountains, and swimming pools.
Choose the right waterproofing products to ensure their effectiveness and protect the business premises. Visit Projex for complete waterproofing needs.
11. Marketing the business
There are many ways for marketing the business and products/services, which include: newspaper or magazine ads, brochures, media releases, email marketing, website ads, social media, and search engine optimisation. The marketing plan should typically cover an analysis of the market; business objectives and steps to achieving them; key strategies; proposed budget; and implementation plan.
12. Recordkeeping and accounting systems
Accurate and current records must be maintained to ensure business success. Accurate recordkeeping can help manage cash flow better and minimise losses. Cash flow statements, profit and loss statements, and balance sheets are all required under taxation laws. Seek help from accountants and bookkeepers to manage the business’ financial records/accounts.
13. Employing staff
Employees will be one of the greatest assets of the business; it is therefore necessary to spend the right amount of time and money to find the right kind of people. As an employer, there are certain obligations to be fulfilled, which can cover: Pay as you go (PAYG) withholding; Payroll tax; Fringe benefits tax (FBT); Superannuation; Awards, pay rates, leave and employee entitlements; Employee hiring and termination; WorkCover insurance; Workplace health and safety; Anti-discrimination and equal employment opportunities; and handling complaints and disputes.
The business owner should also find out whether the Federal or state industrial relations system; or the National workplace relations system is applicable for their business.
More information is available on the websites of Department of Employment – Workplace Relations; and FairWork Ombudsman – Small Business.
14. Building a support team
Building a support team is one of the most important things that will help the business get off the ground and running as well as ensure its success. The support team can include an accountant to help with business direction and taxation; and a lawyer to help with business contracts and legal issues. The business owner can also join the relevant trade/industry association to gain support and a better understanding of starting and running a business; and also join the relevant business networks to help spread the word about the business.
15. Where to find help for the business
The following government bodies can offer great assistance:
ASIC: Business registration and legal requirements
Australian Business Register: Registering an ABN and other tax obligations, e.g. GST
Australian Taxation Office: Small business tax information
Business.gov.au: Online government resource for Australian businesses, including advice and information on government grants
Department of Employment – Workplace Relations: Employment and workplace relations information
FairWork Ombudsman – Small Business: The basics of starting a small business and hiring employees
Every State Government also offers small business advisory services, information for which is available online.