Starting A Business?

Congratulations on taking the first steps to creating your own business.  Our specialist team of business accountants are here to help and are delighted to offer a complimentary meeting to discuss your business.

Small businesses make a significant contribution to the Australian economy, accounting for almost half of industry employment and contributing over a third of industry value.
 
Behind every small business there’s a story worth knowing. Over the years we have helped many entrepreneurs with setting up new businesses, it’s always a unique and interesting situation. Setting up and running a successful business takes more than luck, talent and a good idea.
 
Whatever the stage of your new business we can help to give you peace of mind through powerful practical advice from an external perspective. And as accountants we can offer a full suite of services from solid forecasting, business planning, management accounting, cash flow forecasting to annual compliance.
 
Our advisors are here to help you through the stages of your business whilst helping to identify risk and maximise opportunities. It’s important to speak with your accountant at the start of the process to ensure the correct foundations and business structure is well planned.

BUSINESS PLANNING – GETTING STARTED

To open a business is easy but to keep it open is an art. A business plan is important to plan for the ongoing success of the business. Some of our wealthiest clients have presented concise plans on just a few pages, others with heavy detailed business plans.
 
Business research helps you to identify the size of your market, whether people are interested in buying your product or services, who your competition is and whether your business is sustainable. It will help you to find the right business strategy for your needs, for example through differentiating your business from competitors.
 
Elements of a business plan may include:
  • One page overview
  • Purposes and objectives of going into business
  • Marketing research & analysis
  • Marketing plan / strategy
  • Operations plan
  • Management plan
  • Financial plan with costing’s and financial projections
A business plan should not sit on the shelf but become a fluid ongoing document that should have regular reviews and updates. You should also consider how to protect any intellectual property.
 
 
The first step when considering registering a business is to determine if you are carrying on a business or hobby.
 
If you are in business:
  • the money you earn from your business activities is generally assessable income
  • you can generally claim a deduction for the expenses you incur in earning that income
  • you may be able to offset any loss you incur against other income you earn or carry the loss forward to offset future income.
If your activities are a hobby, the above points do not apply.
 

CHOOSING A STRUCTURE

When starting a business, it’s very important to choose the business structure that best suits your needs. There are four main business structures commonly used by small businesses in Australia:
  • sole trader
  • partnership
  • trust
  • company
 
Your business accountant can assist you in choosing a structure appropriate to your specific circumstances. The structure you choose may affect the tax you are liable to pay, asset protection, ongoing costs, or perhaps your clients – for example, some prefer to deal only with companies. Whichever structure you choose, make sure you understand the responsibilities that go with that structure. Typically, costs and complexity increase as you move from a sole trader to a partnership to a company or trust.

TAX OFFICE REGISTRATIONS

You will need to register your business for a number of tax obligations which may include;
 
  • Tax File Number (TFN)
  • Australian Business Number (ABN)
  • Goods and Services Tax (GST)
  • Pay as You Go (PAYG) Withholding 
  • Fringe Benefits Tax
  • Fuel Tax Credits 
  • Luxury Car Tax
  • Wine Equalisation Tax 

WORKING OUT IF YOU NEED A TAX FILE NUMBER 

If you have decided to operate your business as a sole trader, you use your individual tax file number for both your business and personal dealings with the Tax Office.
 
If you have chosen to operate your business through a partnership, company or trust, you will need a separate tax file number. You can apply for a tax file number when you register for an ABN.
 

WORKING OUT IF YOU NEED AN AUSTRALIAN BUSINESS NUMBER 

You do not have to have an ABN, but having an ABN will:
  • make it easier to register for GST and other business tax registrations such as PAYG withholding
  • avoid having amounts withheld from payments to you – businesses must withhold 46.5% of any payments they make to you unless you quote an ABN.
Each entity (sole trader, partnership, company or trust) receives one ABN, regardless of the number of commercial activities or enterprises it undertakes. For example, a single entity running a cafe and a newsagency would have only one ABN. But if you set up separate companies, partnerships or trusts, each entity must register in its own right.

WORKING OUT IF YOU NEED TO REGISTER FOR GST

You must register for GST if you are carrying on a business or enterprise, and any of the following apply:
 
  • your current or projected annual GST turnover is $75,000 or more ($150,000 or more for non-profit organisations)
  • you provide taxi travel
  • you wish to claim fuel tax credits.
If your annual GST turnover is below $75,000, you can choose to register for GST.
 
You must continually monitor your turnover. As soon as you realise that your current or projected annual GST turnover is $75,000 or more, you have 21 days to register.
 
The above is just a few of the considerations and questions you may have about starting a business. 
 
Our team specialise in helping small businesses and would be delighted to meet with you to discuss your needs. Contact our team today