03 Jun The things you need to know before you start your business
Starting a business is an exciting time and often the culmination of many years of thinking and dreaming. However, it’s important to make sure you plan effectively before you start your business. We have outlined the things you need to be across before you start your business.
A business plan provides the foundation for your business. It’s the one place that encapsulates your thoughts, ideas and allows them to be tested.
It should include a summary, describes the business in detail, looks at the market you will operate within, considers the future environment and the finances.
It’s important to note that you will need a complete and accurate business plan when seeking finance for your business.
Your marketing plan allows you to clearly define your audience and how you are going to reach and engage them. Make sure you actually outline the activities you are going to undertake and measure each activity and adjust as you go.
Financing your business
It’s important to organise your finance before you start your business. There are a number of ways to secure finance and include, bank loans, using your savings, venture capital, government funding and borrowing from friends and family.
There are generally 3 forms of business structure. It’s important you understand each one and then determine which one is going to suit you best.
As a sole trader your business doesn’t have a separate legal existence from you. This means you’ll be responsible for the liabilities of your business. The income your business makes needs to be reported on your personal income tax return.
A partnership is where two or more people come together and start a business. They share profits and losses inline with the partnership agreement. Under this structure the partnership must lodge an income tax return.
With a trust a business is transferred to a third party. The third party has legal control and is required to to run the business for someone else. Again, like a partnership you will need to lodge a separate trust income tax return.
The fourth business structure is a Company. Under this structure the company is a legal entity separate from its members which are shareholders. The directors of a company have legal and reporting obligations. The company must lodge a separate company income tax return.
It is important to plan before you start your business. If you have any questions please contact me at firstname.lastname@example.org