Starting your own business? 17 key questions to ask first…
Starting your own business can be exciting and daunting at the same time.
You may be highly skilled at your profession but there is a lot more to running a successful business than that.
There are times when you’ll wonder whether you have the necessary skills and know-how to run a business.
Many of the teething problems can be avoided by simply asking the right questions before starting your own business.
To save you wracking your brains too hard, we’ve condensed it down to the 17 key questions you’ll need to ask. Some you will already have covered but others you probably won’t have considered…
- Do you have a business plan?
Running a successful business requires you taking the time to prepare a business plan. It is like a road map for your business that you can’t do without.
- Do you have a marketing plan?
It’s necessary to understand where your customers, clients, patients, etc. will come from and how you’ll reach them.
- Have you set projected budgets?
Operating your start up business with a budget in place ensures you have sufficient cashflow to sustain your business through your growth period.
- What the best structure for your business?
Are you putting your personal assets at risk with your choice of structure?
- Do you understand your registration requirements?
These include obtaining an ABN and a Tax File Number (if not operating as a sole trader)
- Are you required to register for GST?
If so, what method are you going to choose for reporting? Registering for GST also means you’ll be responsible for preparing and lodging Business Activity Statements based on the reporting period you are registered for (generally quarterly).
Note that if you’re not required to register for GST, you need to ensure that invoices are issued without charging GST.
- Are you going to employ staff?
If so, are you fully aware of your obligations including Tax File Number declaration forms, Standard Choice forms for superannuation and registering for Pay As You Go Withholding?
- What bookkeeping system is most suitable for your business?
Once this is decided, you also need to decide who is going to be responsible for managing your record keeping? Using a cloud-based bookkeeping system provides relevant, real-time data.
- Do you understand your compliance obligations?
These obligations include the preparation of financial accounts and income tax returns. Understand what these are before starting your own business.
- What types of insurances do you require?
You’ll have to consider whether you’ll need professional indemnity, public liability, workers’ compensation and income protection. Seek advice from an insurance broker or your relevant industry body to ensure that you have sufficient insurances in place when starting your own business.
- Do you understand how taxes are paid for the income you’ll be earning?
Are you going to be on salary and wages as an employee of your company or trust, or paying a percentage of your income as tax? Have you calculated a percentage that you need to be saving for taxation so that you aren’t slugged with a large bill at tax time?
- Will you need to register a business/trading name?
If so, you’ll need to make sure that the name is available on the ASIC website and you’ll need to pay to use the name.
- Are you developing a ‘brand’ for your business?
If so, consideration should be given to registering the Trademark for your brand.
- Have you considered potential capital gains tax implications?
If you’re starting your own business from home, this will be a factor you need to consider.
- Are you aware of the taxation deductions available?
Small businesses may get a tax deduction for the purchases of assets, for instance.
- Are you going to keep a vehicle log book?
If you use your motor vehicle for your business, it is recommended you keep a log book for 12 weeks to maximise the deductions available. Using a motor vehicle for your business has different taxation implications, depending on the structure you choose.
- Are you aware of your industry regulations?
If you work in the building and construction industry, for instance, are you aware of your Long Service Leave Corporation NSW reporting obligations or the Taxable Payment Reporting Obligations?
Are you still sure you want to start a business?
If so, take the right advice before starting your business to ensure you understand all the main considerations and obligations. Call us on 02 4322 9044 for a no-obligation chat.