As an entrepreneur, you should realise from the outset that many of the problems, if not all of the problems and day-to-day issues that you are likely to encounter will have been experienced by others before you. That is why a section such as FAQs is probably one of the most important ones on this website.
The ‘shape’ or running order of this section is going to be roughly in line with the whole process of starting and running a business and I would like you to consider this as a resource , not only in the sense of finding solutions to questions that you may have, but contacting us and sharing your own insights with the other readers and members of the site.
Remember, we value your opinion and want to hear of your experiences, both positive and negative , so that we can all learn together.
When you first make the decision to start a business, it is probably going to be one of the most important decisions of your life and that is why it is best to be informed about as many aspects of the process as is possible.
Before we launch into the section, I think it is important that you should study the following websites which will give you the official view on everything that you are likely to see in these FAQs: business.gov.au and the Australian Small Business Commissioner. (the second link would be the most useful to you if you are interested in the legal framework and legal aspects of starting a business in whatever form within Australia)
Whether you are a new businessperson starting with an idea, just the will to work for yourself or whether it is a product that you are passionate about… whatever the reason, it is very difficult to launch any sort of business without understanding the rather mundane aspects such as your legal obligations and your tax.
There is no right or wrong when starting a business, but there are certain things which are unavoidable. Whether you are providing a service or distributing a product, you will need to carry out some research of your potential marketplace, you will need to talk to someone about raising finance. It doesn’t matter what the source of finance is – that’s up to you, but for instance, did you know that there are grants available and each state has its own set of rules? Unless you intend to start by working from home, you will need to locate premises and maybe even employ people. Once again, by far the best source of information (unless you want to spend days, weeks or months carrying out research) is a ready-made business adviser. For instance you may even want to start a franchise – and even in that case it is a good idea to seek professional advice.
As a guide, it is important that you:
- have a clear business plan in place
- have undergone self assessment to ascertain your suitability to the business you are planning to establish
- ensure that you have all the necessary licenses and permits to meet all regulatory requirements that apply to the type of business you are planning to establish.
To know more about the compliance responsibilities of starting a business, please visit the Australian Business Licence and Information Service.
You are probably realising by now that the letter ‘T’ contained in an acronym which is in any way connected to government departments, stands for ‘tax’. TFN stands for Tax File Number. So, whether you are a sole trader, a partnership, trust or even a limited company, you will have your own unique TFN. You can apply for it when you apply for an ABN.
ABN stands for Australian Business Number and consists of 11 digits which identifying your business. The Australian taxation office (ATO) prefers to deal with businesses that have that identify, as do all other government departments. Having said that, an ABN is not compulsory but it is a good idea to apply for one at the outset.
Unfortunately, GST is something that you are very unlikely to escape from which means that you are going to have to considerate it in all your calculations, right from the outset. It stands for Goods and Services Tax and the likelihood is that your business will be affected by it. GST is absolutely mandatory and you should be registered for it if you have a turnover of $75,000 plus. You can register, either through your tax agent or by phoning 1300 720 092.
In the business context, a trust is no more than a legal device for holding income or property for the benefit of others. Very often the family business is operated as a trust.
Once again the accountant or business adviser should be to help you with this. Unless of course you have your own contacts within the financial services industry. You could go for a loan from your bank, you could use your personal savings and of course there is always the availability of venture capitalists. Your business adviser may also help you to obtain a government grant, which is slightly different to start up capital. Unfortunately, start-up funding is something the government does not involve itself in – purely because it is not in the business of risking taxpayers’ money.
The short answer is ‘no’, you do not need a business name – but you may wish to distinguish yourself from the competition and you may wish to create a certain kind of image. If that is the case, then yes, it may be a good idea to think about the business name – and you may even wish to think about protecting your business name by registering it as a trademark in order to give you and your business a certain level of protection.
Whatever the initial setup of your business is, you should know that you need to register your business name with the Australian Securities and Investments Commission (ASIC) – unless you’re a sole trader, trading under your own name, or if you are a partnership with you and your partner(s) using your own names. Obviously if you’re trading under your name, the tax authorities will find it far easier to identify you. You may also of course decide to launch as the director of a company, in which case you need to register with the ASIC. One of the most important things to know is that whether you decide to operate as a sole trader, partnership, trust or company – you will probably need the help of a professional. There is a readily available list of business advisers officially published by the government and they can be found here: business.gov.au