Where do you begin?
Starting your own business can be daunting to begin with. There can be so much information that it is overwhelming or you may find all different types of information that it’s difficult to sift through and figure out what to do first. I have come across this question in many online forums and decided to launch my first blog with hints and tips on how to start your own biz!
My background prior to launching my own business in 2013, was in the wholesale and manufacturing industry where I was employed with the same company for over 11 years. I managed 30+ staff and oversaw the entire administration operations from Customer Service to Accounts, to the IT Dept. The basis behind the information I share with you in this blog is garnered from the experience from my working life, alongside the personal experience I gained over the years by starting my own business.
Information in this blog is not considered professional advice but it is written in hopes that it will assist those who are looking into starting their own entrepreneur journey. I also acknowledge that each business owner conducts their business in the manner they see fit and hope the info in this blog may help in their decision making.
Business Vs. Hobby
The first thing you need to determine is if you are running a business or a hobby. According to the ATO it comes down to intent. Do you intend to act like a business? Make a profit? Seek out new customers? Create social media pages to seek new business and encourage new customers? Trade under a name other than your legal name? If so, you would be considered a business and therefore will need an ABN.
Click HERE for info from the ATO regarding Business vs. Hobby
Applying for an ABN
Applying for an ABN is free via the ATO website. Follow the link HERE to be taken to the ATO website to apply.
Registering your Business Name
According to ASIC, if you are trading under a name OTHER than your legal name, you must register your business name. This includes adding words onto your name for eg. “Your Name Handmade” etc. Registering a business name requires you to have an ABN number so be sure to attain your ABN first.
When you have your ABN number, registering a business name is easy and minimal cost. If you register directly with ASIC the costs are approximately $34/1 year or $80/3 years. You can register your business name directy with ASIC HERE.
It is important to note that registering your business name does not give you legal rights over the name. It is merely added to a register to protect consumers and is a method to finding out who runs a business. If you would like to “own” your business NAME then you would need to think about a trademark which requires further research and even better – sourcing a Trademark Lawyer. We have connected with Lisa Win over at Win Trademarks who is a Trademark Attorney and can assist in this area.
There are many things to consider if you choose to pursue registering a Trademark, so it is highly encouraged to seek professional advice for your particular situation. Lisa has put together this awesome checklist to help you decide if Trademarking your business name is suitable for you.
To download Lisa’s free “Should I Trademark my Business Name?” checklist click HERE.
With an ABN you are required to complete a tax return each financial year. However as a sole trader, this can be completed via your personal tax return online. It is a simple process and if you have no other income streams and have earned less than the tax free threshold ($18k) you more than likely won’t need to pay tax. It is important to note that if you receive benefits from Centrelink that you seek advice from Centrelink pertaining to your particular situation and declaring your income etc.
Registering for GST
When registering your business name and applying for an ABN, it is not a requirement to register for GST. You are only required to register for GST once you have a sales turnover of $75k over any rolling 12 month period. If this applies to your business then you will need to register for GST and are required to complete Business Activity Statements (BAS). You are able to register for GST if it suits your business model but is generally not required. It is important to note here that you should seek advice from your Accountant re: GST and your business.
Whilst insurance is not a mandatory legal requirement it is most definitely recommended. In every line of work there is the potential for something to go wrong and by having insurance it provides protection for your business and your customers. In the event that a claim were raised against you, your insurance will cover the costs of legal representation and subsequent payouts should they be necessary.
- PRODUCT INSURANCE covers you for claims of bodily injury arising from the failure of goods sold by you through your practice. You can have warning tags to make customers aware of a risk, and depending on the product – tags are mandatory, but if something happens and you are found liable, you could lose everything including your house and future income.
- PUBLIC LIABILITY INSURANCE covers you and your business for losses or damage that a third party suffers (or claims to have suffered) from your business activities. This includes being market stallholders and having customers pickup directly from your home and/or office.
Another perspective is looking at it as protecting your customer. If your product were to somehow fail or gave someones baby/child permanent life altering injuries, then by having product insurance means that the medical costs for that childs life plus compensation would be covered,
At the end of the day it is up to each business owner to weigh up the risks of either being covered with insurance or not, but the risk is very real. My insurance broker informed me that Australia is fast becoming like the USA where customers claim/sue for anything. Therefore, I believe being without insurance puts you and your family at risk.
Our recommendation for business insurance is with the brokerage firm that we use – Mark Mellish over at Richard Mellish Insurance Services. Pop over to their website to obtain a quote for your individual business situation.
There are particular items that require mandatory standards be adhered to like toys for infants (be it teething toys or soft toys) and children/infant sleepwear. The ACCC regularly conduct compliance checks by anonymously purchasing products and testing them to ensure safe products in the marketplace.
Depending on the product, (not all items have mandatory standards) they can be found online at SAI GLOBAL. It is important to remember that some insurance policies require your products to pass mandatory regulations and the only way to ensure that they do adhere is to have your items independantly tested.
Note: Our handmade bubblegum bling jewellery items are considered fashion accessories and are therefore not required to meet any mandatory regulations.
There are alot of things to take into consideration when starting a business and this is just the start! I believe that if you put your mind to it, make a plan and set goals for yourself then you can be successful – and remember everyone measures success differently! Find your niche and something you love to do and you can be great!
- Business vs. Hobby – on the ATO website HERE.
- Applying for an ABN – on the ATO website HERE
- Registering your Business Name – on the ASIC Website HERE
- Free “Should I Trademark my Biz Name” Checklist – on Win Trademarks Website HERE
- Insurance Recommendation – Integra Insurance Brokers Website HERE
- Mandatory Regulations – SAI Global Website HERE