Things to remember when starting a small business

Starting a small business can be an exciting life choice. 

Operating a small business offers many benefits, such as flexibility, independence, and the ability to be your own boss.

However, there are things that all prospective business owners should consider before taking the plunge. This is because starting a business isn’t as easy as you might think.

Prospective business owners need to ensure that they have the necessary liquid capital to be able to cover their initial startup costs. Startup costs will depend on the type and structure of business you’re planning on creating.  It’s a good idea to seek legal advice at this stage to be fully informed of your options. 

Some common startup expenses include:

Supplies, equipment and other expenses

This one is a bit of a no brainer. You can’t make cheeseburgers without cheese. You can’t make cake without a mixing bowl. You can’t make a pizza without pineapple, well, maybe you can. 

Point being is that you will need to ensure that you have the necessary equipment to be capable of making your startup succeed. 

It’s not just supplies and equipment that you’ll need to consider. Electricity, rates, internet, phone connections and fuel expenses will need to factor into your businesses’ budget. 

Bear in mind that it may take several months for your business to get up and running and become established. Therefore, you should also consider the amount of money you will need for the supplies, equipment and other expenses necessary to get you through the startup period until such time as your business begins making a profit. 

Your supplies and equipment will also need to be protected, which brings us onto the next start-up expense.

Insurance

If you intend on starting up a business that possesses plant and equipment, these assets will need to be insured to avoid potentially calamitous events. You will also need to consider public liability, Workcover and other insurances.  Do your homework and speak to a broker about the insurance available for the type of business you are purchasing.

You wouldn’t want your new business to end up on the front page of an obscure website. News travels quickly in 2021, and having an online presence is more relevant than ever. 

Domain names

A domain name is a website’s online address.

In the 21st century, you may find it hard to get ahead as a startup small business without an online presence. There are many web services which provide domain name registration services. Depending on the type of service you plan on providing, taking out a domain name might be an essential decision. 

Having a domain could work wonders for your businesses’ branding and marketing development. 

It could really put your businesses’ name on the map, which leads us to…

Business name registration

Have you already thought of a great name to call your business? If you have, you might want to consider checking to confirm whether it’s available for registration.

You can check the availability of business names online by visiting the ASIC website

If the business name is available, you will have the option to register it for a period of one or three years.  

It’s a legal obligation to register a business name if the name is different to the name of the legal entity that owns the business (ie: your own name). A registered business name can help customers locate and interact with your business, so choosing the right one is important. 

Employees

A good business rarely ever functions without a dedicated team of employees to help make the wheels turn.

Before starting up it’s a good idea to think about the number of employees you might need to make your business reach its potential from the first day.

You’ll also need to consider your legal obligations as an employer pursuant to the Fair Work Act 2009. 

It’s worth noting that as of 27 March 2021 casual employees can now apply for full time employment through a process called ‘casual conversion’ in circumstances where they have worked for an employer over a period of 12 months.  

For more information on these changes, read our recent blog exploring the matter in detail. 

Agreements

If you’re wanting to start a small business, you will quickly become very familiar with agreements.

Commercial agreements are binding contracts which outline the rights and obligations of all parties involved. If you are a supplier of good and services you should consider what terms and conditions you want to provide them under.  Terms are not one size fits all.  Terms tailored to your type of business will offer the best protection for your new venture.

Prior to entering into agreements, it’s crucial to be fully informed of your rights, responsibilities and obligations.

The team at Cohen Legal can assist by providing advice and preparing the necessary agreements to help your business kick some goals. Our business is protecting yours.