Starting a Business in the Central West

Running your own business in the Central West, can be both incredibly challenging and extremely rewarding. Most entrepreneurs start their own business for the freedom, satisfaction and flexibility that can come with working for yourself. There is no better feeling than creating your vision from the ground up and seeing it come to life. No matter what your why is, we are here to help you with the how.

An accountant is an invaluable resource in your business, it should be seen as in investment and not an expense. A good accountant can help you create a business plan, choose the right structure, monitor your cash flow, implement an accounting system, and keep you compliant on your obligations. If all these things are done correctly, it can save you significant time, money, and stress down the track.

Writing a business plan

A business plan translates and structures your vision into clearly defined goals with plans on how you are going to achieve them. It can be used to legitimise and prove that your idea is feasible and how you are going to make it come to life. While business plans can encompass a broad range of things, we highly recommend they at least incorporate these five things;

• Executive Summary: this is your business elevator pitch, a brief summary to highlight all the key points in the below steps. Think about a pitch like they do in the tv show Shark Tank.
• Business description and structure: this section is all about what your business does and why you went into business in the first place. What needs of the marketplace is your business meeting? Describe your business processing and how exactly you are going to deliver that.
• Market research and strategies: this section is all about your target market, your competitors and how you fit into the market. There should be detail about the pricing of your products and how you are going to market your business. It should also include how your product is different from what is already available.
• Management and personnel: this is where you analyse what skills your business needs and how key peoples experience will fill those needs.
• Financial documents: this is where you include all your start up costs, as well as projections for the first few years. Completing this in detail can either legitimise your business idea or whether it needs to go back to the drawing table.

Choosing the right structure

Getting the structure right initially can save you a lot of money and complication down the track. There are many factors that need to be considered when choosing a structure and you should seek advice on your own specific circumstances from your accountant. In Australia there are four basic types of business structures.

• Sole Trader: the simplest type of business structure to have, operating as yourself or you can register a business name. You have complete control of the business and very little red tape. The downside of this business structure is your personal assets are at risk if something goes wrong. You will also be responsible for your own superannuation and personal insurance. You are taxed on the net profit of the business.
• Partnership: another simple structure containing 2-20 partners. Partnerships require their own TFN and each partner will pay tax on their portion of the profit. Partners are responsible for their own superannuation and personal insurances. Each partner is responsible for the business’ liabilities and this can put your personal assets at risk.
• Company: this structure is a separate legal entity, this means that personal liability to the directors is limited and it has it’s own legal rights. Corporate tax rates are fixed and can be beneficial, dependant on income. A company also has a higher level of compliance and start-up costs and can generally be more costly to run.
• Trusts: there are several different types of trusts, each with different pro’s and con’s. The flexibility of a trust structure can make it suitable for many different types of businesses and can provide many benefits to its owners. The complexity of the structure can make it an expensive structure to implement and operate.

Utilising an accounting system

A good, easy to operate accounting system has many benefits to a business. It can save time for the owner compiling documents for BAS and tax time, make chasing up outstanding invoices easy and it can provide the business owner with quality numbers to make important decisions. You can also store tax receipts in the software, making them easy to find in the future. It’s no secret that we mostly use and recommend Xero accounting software, but we support any type of cloud-based system.

Compliance

A business owner can have many obligations that they need to keep on top of, some of the ones that your accountant can help with are listed below:

• Income Tax Returns
• Business Activity Statements (BAS)
• Goods and Services Tax (GST)
• Single Touch Payroll (STP) and Pay as You Go Withholding (PAYGW)
• Superannuation
• Payment Summaries
• Fringe Benefits Tax (FBT)
• Taxable Payments Annual Report (TPAR)

Our firm has a wealth of experience in start ups and structuring new businesses, if you are looking at starting a business get it touch today.