10 Things to Consider Before Starting a Business
If you are thinking about starting up a business, here is a list of practical considerations.
If you are thinking about starting up a business? Here is a list of practical considerations:
10 Things to Consider Before Starting a Business
1. Business Structure and Registration
In deciding a business structure it essentially comes down to whether you are looking to work with somebody else and the level of liability as an owner you want to undertake. Most small businesses will start off as a partnership or as an individual working as a sole trader. It is important to note, depending on the structure undertaken, there are different requirements regarding their registration and agreements between partners.
Sole traders can register for an ABN or can use their already existing TFN. If undertaking a partnership, along with registering for an ABN it is recommended that the relationship is governed using a partnership agreement.
2. Market Research
Consider the market that you are planning to move into. Consider who your competitors are and whether there are others doing the same thing as you are. If there are, look at their prices and how you can differentiate yourself from them. Perhaps you might not be able to compete financially, this might be the step where the idea might not seem feasible.
3. Intellectual Property
If you have a business name, logo or distinctive product, it is crucial that these pieces of intellectual property are protected. Consider applying for a trademark where you wish to protect signs, your business name or your logo. Alternatively, if you have a particular product that is your invention you can apply for a patent.
4. Traction on the Internet
It is most likely that the internet will be a vital source to establishing and marketing your product or service. Establishing a website and using social media is therefore a must. In some circumstances, it may be worth paying to promote social media posts and advertisements on platforms like Facebook and Google.
Registering your company through LawPath gives business owners access to a range of partner offers including website offers for getting your hands on a domain.
All businesses will need funding, consider where this is going to come from. Different areas of funding might include discussing with an accountant whether to take a loan from the bank, to use your personal savings or to raise capital in another way such as through capital raising. The scale of the amount of money and assets you require will change the source you get the funding from.
6. Business Regulations
It is important to consider if there any any applicable laws or regulations that will apply to your business or to your product or service. For example, restaurants will need to comply with food safety standards and will require a licence when selling alcohol.
Determine if you are going to operate within the standards of an industry code. Besides this the Australian Business Licence and Information Service (ABLIS) provide information regarding the licences and regulations you may need to comply with.
If you are planning on employing staff for your business it is crucial to implement an employment agreement setting out the terms of their employment. Later on, you may want to implement specific employment policies to set standards across all your employees.
Besides this, consider the employment regulations such as rules under the applicable industry award. If you are a sole trader planning on working with contractors, consider implementing a contractor agreement.
Depending on how you have structured your business you will be required to insure your business or employees. Generally, consider looking at public liability insurance, asset insurance, professional indemnity insurance and workers compensation. If registering as a sole trader, it might be good to cover yourself through consumer level insurance for possible loss of income or if you are working from home, your house.
9. Managing Finances
Consider how you will manage your finances? Setting up an invoicing system is a good idea for keeping productivity high. Also, you will most likely require an accountant for for lodgements and financial inquiries, it might be worth finding an accountant that you can rely on for an extended period of time. Lastly, consider opening a business bank account, this will be important in the future growth of the business to separate your personal finances to your businesses.
10. Sales Channels
How are you actually going to sell your product and reach your customers? If you are planning on selling products online, consider the purchase process. Consider investing into a sales system that customers can purchase products through without directly contacting you. Alternatively, if you working with a service requiring quotation, it might be worth looking into a Customer Management System (CRM).
Registering your company through LawPath gives business owners access to a range of partner offers including online sales systems for your website.
Need to find out more about starting a business? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from one our network of 750+ expert lawyers or any other legal needs.
Adam is a Legal Intern at Lawpath working with the content team. With an interest in consumer and commercial law, he is currently completing a Bachelor of Commerce and Bachelor of Laws at Macquarie University.