Far too many get caught up in the excitement of going into business for themselves that they miss some critical steps that can make or break a business.
Whether you are planning on opening a fish ‘n’ chip shop, starting your own bank or buying your first truck, there are some basic principles you can follow in order to start and then continue to grow a successful business that will ensure you give your business the best chance to survive and prosper.
When you start a business, chances are you decided to go into business for the following reasons:
1. You are good at what you do
2. To make money
3. More freedom
4. To build an asset
The more effort and time that you put into your business via the things that you are good at will ultimately determine how much money you make, how many assets you can accumulate and how much freedom you can allow yourself.
That being said, the key to your business is obviously YOU and how much time YOU have to do what you know best; that is to service and build your customer base and run your business! There are certain areas of your business that will require external areas of expertise, such as, accounting, finance and insurance.
Before you spend a dollar, it is vital to the success of any new business to seek expert guidance from an expert in each of the following specialised fields such as accounting and insurance.
Although every business is different, the key to your success will be the foundation upon which you build your business. So, after you have brainstormed your business idea, seek out and consult with an accountant and an insurance broker that specialise in your type of business.
An accountant will advise the best way to set up the structure of your business for taxation purposes and also help with your business and GST registration (if GST registration is required in the early days).
Your accountant will also crunch the numbers for you, based on a realistic income and expenses projection and if they specialise in the type of business you are about to start, they may also be aware of any other potential expenses that you may not have already factored into your figures. It’s always a good idea to consult with your accountant before purchasing any high value item.
Your accountant may also have the ability to advise the most suitable accounting/invoicing system which will greatly assist you in keeping track of your invoicing and debtors; these invoicing programs can help reduce the amount of paperwork you need to do, once again freeing up more of your time.
Yes, everyone hates insurance, but, like it or not, it is a very important part of any business.
Public Liability is a must for every business as is Workers Compensation if you have an employee. These 2 insurances are a statutory (Legal) requirement for anyone operating a business in Australia.
It is best to find yourself an insurance broker that is familiar with your type of business, for example transport. A specialist broker will identify the types of insurance policies that you need and will provide advice on the correct cover for your business needs.
Some common insurances you will need as a transport operator are: Commercial Motor Vehicle, Public Liability and Marine Transit. Depending on your operation other policies may also be required.
A very common mistake when starting out in any business is that most people leave their insurance to the last minute. Big mistake! It is vital that you seek advice from your insurance broker before you look for any finance as you will need to factor in the TRUE cost of insurance to enable you to firstly determine if the business is financially viable and secondly, you will need to add the insurance cost to your business plan that you present to a finance company and before they provide any loan to you they will request a copy of your insurance.
It may come as a surprise to you, that, the monthly cost of your insurance if starting out in a new business as a transport operator can be equivalent to your monthly finance repayments on your truck and trailer. You need to consider this when deciding if the business is actually a viable venture.
By enlisting a specialised accountant and insurance broker you are effectively freeing up your time to concentrate on what you do best and leave the worry of taxation, insurance and finance to the ones that specialise in these fields.
About the author: Mark Brown is a leading industry insurance broker with TBI Insurance Services based in Wagga Wagga.
Important: All answers and information contained within this article should be considered as General Advice Only. This advice should only be considered as General in Nature and its intent is only to prompt the readers to investigate their own individual insurances. It has been prepared without taking into account the readers own individual objectives, financial situation or needs. Because of that, before acting on the above advice, the client or any persons should consider its appropriateness (having regard to their objectives, needs and financial situation) and seek further independent advice from their own financial advisor.