So you have the idea for a small business but you’re not sure how to go about turning it into an actual business. Here are five must-dos to help get you started.
Five steps to starting a new business
Step 1. Pick a structure.
Your business structure may vary and depends upon what you’re offering. In Australia, there are three main types:
A sole trader is the simplest structure, as it is inexpensive to set up and there are fewer legal and tax formalities. This structure is usually most appropriate when you’re a freelancer or running solo.
A partnership is an association of people who carry on a business as partners or receive income jointly. Control or management is often shared, as are income and losses.
A company is a distinct legal entity and is regulated by the Australian Securities & Investments Commission (ASIC). Due to the complexity of this business structure and additional reporting requirements, it’s often more expensive to set up and manage. A key benefit of the company structure is that it can provide asset protection, but directors can also be found legally liable for their actions and potentially the debts of the company.
Speak to your accountant, solicitor or business advisor if you need help determining the right business structure for you.
Step 2. Create a business plan.
Put together a business plan which will help keep your eyes on the prize. Address thing like competitors, value proposition, primary customer and budget up front to ensure you’re on a solid footing.
Step 3. Think through financing.
If you don’t have the cash to get things off the ground, you need to find it from other sources. Luckily, there are a number of avenues for securing small business financing — traditional bank loans, asking your friends and family, or other sources like Square Loans. But before accepting money from any of these sources,you should conduct a financial analysis and consider important aspects regarding your business.
Step 4. Invest in the right business technology.
The right point-of-sale and payments system is an important tool to have ready to go when the doors fly open. It will help you accept card payments from all major cards (that’s Visa, eftpos, Mastercard and Amex), record every transaction, manage your inventory and provide you with powerful reporting, data and analytics so you get to know how you’re business is running from the get-go. Our simple guide for selecting the right POS for your new business has all the information to get you started.
Step 5. Setup your business protections.
As a small business owner, you’ll want to encounter as few legal and accounting surprises as possible. Make sure you’re aware of your obligations both to the Australian Taxation Office (ATO) and local, state and federal governments.
The registration process is something you can do yourself, or you can hire an accountant or solicitor to help you complete your documentation and answer any legal questions you have.
Step 6. Build your team.
Many small business owners get started doing everything themselves, but at some point you may consider hiring a team to support you. A part-time employee or a contracter may be enough to cover you at first. As your team grows, make sure that you have the right tools to manage operations and business security.
The details of starting a business can seem overwhelming, but if you just take it step by step, you’ll soon be on your way.