Checklist for Starting up a Small Business

Careful planning, research and execution is essential before you establish a small business. The following is a checklist of some of the important issues you need to consider before you get started -

Research your business idea and develop a business plan

Before starting a business, you need to answer the following fundamental questions -

Is your business idea viable?
Is there a market for your product/service?
What is that market?
Who are your competitors?
Do you have the financial capacity to get the business up and running?

Researching your market

Research the market you wish to enter. Whatever the product or service is you are going to be offering, you need to be certain there’s a market for it. This research will also help you to evaluate the best forms of marketing for your business and your right target audience.

Consider the following:

Competitors -

Who are your direct competitors?
How successful are they and why?
What are their strengths and weaknesses?
What marketing do they undertake?

Reports and statistics -.

Look for information in market reports, government statistics, journals and industry association publications.

Once you’ve conducted this initial research and ensured your business idea is feasible, it’s time to formulate a business plan.

Establishing a business plan

A business plan is essential for any business and should generally cover the following:

your business goals
marketing initiatives
industry research
operations/management plan
financial plan

Your business plan should be an ongoing initiative which is reviewed regularly.

Obtaining finance

Having the right amount of finance is crucial for the ongoing success of your business.

Contact your local banking or financial institution for finance options and have a solicitor look over any loan contract. Obtain further advice from a Business Advisor or Financial Dynamics prior to signing any finance documents.

Naming your business

The name of your business could have big impact on its future.

When choosing a name, consider the following:

Competitors - Look at what your competitors have named their businesses and try to set your business apart.

Business goals - What do you want to achieve with a name?

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

Market/customer appeal - Choose a name that’s easily remembered and easy to spell and pronounce.

Check with the Australian Securities and Investment Commissions National Names Index to see whether your chosen name has already been registered.

Once you’ve decided on a name, don't forget to register it with the proper channels. You should also ensure that your chosen business name does not conflict with any registered trade marks.

Choosing a business structure

There are several different types of business you can operate under. The following is a brief overview of your options -

Sole trader: a type of set-up whereby the business has no separate legal existence from its owner. You can use a business name or your own name and as a sole trader you are responsible for the liabilities of your business.

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

Company (Pty Ltd): a proprietary limited company is the most common type of company used by small business. Unlike partnerships and sole traders, it has more regulatory requirements and is a legal entity separate from its shareholders/owners.

Trust: a trust is a business structure whereby the trustee holds property and earns and distributes income on behalf of the beneficiaries. One of the most common types of trusts is a Discretionary Trust. Trusts are complex and can have various structures. Each type has its own set of legal and financial obligations.

In order to choose the right business structure, it's best to seek legal and professional advice.

The regulatory requirements of starting a business

Registering a company

All companies need to register a company name and Australian Company Number through the Australian Securities and Investments Commission (ASIC).

According to ASIC, when a company is registered under the Corporations Act 2001, it is automatically registered as an Australian company. This means that it can conduct business throughout Australia without needing to register in individual State and Territory jurisdictions.

Registering a business name

You are required to register your business name with the appropriate State/Territory authority. However, this is not necessary if the business is conducted under your name or your business partner(s); that is, first name and surname, or initials and surname.

Registering your business name as a trade mark

At the start of your business, you might want to consider registering your business name as a trade mark to give you the right to use your business name as a means to distinguish your product/service from that of other businesses.

GST, ABNs and TFNs

If you expect to have annual sales over $75,000, you have to register for Goods and Services Tax (GST). If you register for GST, you will need to apply for an Australian Business Number (ABN).

Sole traders can use their own personal Tax File Numbers (TFNs) but partnerships and companies need to apply for their own.

Contact Financial Dynamics for further information in relation to completing and lodging the required application form/s.

State government licences

All states and territories are responsible for different business licences, permits, registrations and certificates. You will need to check with the appropriate state government body.

Council permits/requirements

You need to check with your local council to find out about zoning, health regulations and whether you need to lodge a Development Application or Building Application before your business can start.

Domain name registration

Whether or not you will be establishing a website for your business in the early days, think about registering your preferred website name early on if you want to have an Internet presence at any stage.

Finding the right premises

When looking for a business premise, you should consider the following.

Location - Do you need to be located close to customers or are you able to service your clients remotely via the telephone or over the Internet? Do you need to be located close to suppliers?
Necessary features - What features must your premises have?
Lease or purchase- Do you intend to lease or purchase your premises?
Working from home - Do you plan to operate your business from home?
Security - Consider things like fencing and gates, lighting, entry and exit points.

Insurance - protecting your business

You must make sure you have the right insurance in place. Depending on the type of business you’re running and the place from which you will be running it, you’ll need to consider insurance for the following -

Fire/other events: this is a must-have for any business operating from a premise. Depending on the insurance company, you will generally be covered for loss/damage from fire, storms, malicious damage or vandalism and accidental damage. Cover your business for damage to glass windows, signs and counters at your premises as they are often not included under fire/accident insurance.

Theft: be sure to protect your money, contents or stock from theft.

Legal liability: this type of insurance covers your business if you are sued for causing personal injury to another person (other than employees) or damage to property owned or controlled by someone else (public liability) or in connection with a product sold or supplied by your business (products liability).

Business interruption: this will cover you for a reduction in your business income as a result of damage to your property. There are often different levels of protection on offer.

Business vehicles: cover your business vehicles against accident, theft or attempted theft and fire.

Personal: if you’re going to be self-employed, look at purchasing life insurance and income protection insurance too.

Remember to:

shop around for the best deal.
make sure you do not under insure your business.
if you're working from home, don’t assume your general home and contents insurance will cover your business.
if you rent your business premises, your landlord's insurance could leave you out of pocket.
seek advice to get the right insurance cover for your business.

Develop a marketing plan

You should put together a carefully thought out marketing plan. There’s no point having a great product/service if it isn’t going to reach your target market.

Whether you want to build a brand or simply advertise your services, there are lots of initiatives you can take. You might not have the biggest marketing budget, but don’t let that stop you from being creative with your marketing plans.

Ask yourself these questions: why am I in business, what do customers want and why will customers buy from me and not my competitors?

A good marketing plan sets clear, realistic and measurable objectives, includes deadlines, provides a budget and allocates responsibilities.

Make sure your marketing plan covers:

analysis of your current market
your business objectives
key strategies
steps to achieving your objectives
proposed budget
implementation plan

Financial records/accounts

In order to ensure the smooth running of your business you should keep financial records to fully understand your operations and financial situation.

Financial Dynamics can advise you -

-if your organisation is legally required to lodge certain financial reports

-if there are tax obligations with which your business must apply.

-the most appropriate accounting software for your business needs.

Employing staff

Employees will be one of the greatest assets of your business, so spend the right amount of time and investment to find good people.

Legal requirements

As an employer, you have certain obligations under common law. You also have obligations under federal and state and territory laws, industrial awards and agreements, tribunal decisions and contracts of employment.

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