” Where there is no vision, people perish…” ~ Proverbs 29:18
Starting a Small Business will feature success and failure. As sometimes to succeed we might just fail first. Starting a small business or buying into a small business in Australia has changed a lot over the past 10 years. Especially the seven years under a ALP and now Liberal Government. If your business turns over less than $1 million dollars a year then we like to classify that type of business as a Micro Business. Micro doesn’t necessarily mean micro amount of work involved.
From our experiences starting a small business whether micro, small, medium or large each have a defined criteria to follow in terms of attitude towards accounting practices, legalities, and company requirements. Lack of consistency in any of these areas will undoubtedly determine the fate of that business.
The ATO (Australian Tax Office) have moved the goal posts in the past couple of years and it would be fair to say that they have benchmarked most small business classification turnovers in Australia. This means they have a median average on turnovers, GST, cash receipts and earnings of most business types. What you have got away with in the past might be a tad difficult to attempt now. This has created an enormous melting pot of opportunity for accountants in Australia because of the proclaimed compliance issues the ATO keep shouting towards accountants who are basically sub – associates of the ATO now. The ATO insist you must be using one or a licensed tax agent/bookkeeper.
Our advice is that when starting a small business that it is difficult to afford the fee’s that accountants now charge on a monthly basis. Get yourself some good ‘Cloud’ or MYOB Accounting software and learn how to use it. Then use accountants once or twice a year for Company taxation requirements and submissions. You will save yourselves thousands and thousands of dollars and you are still complying with current Australian Tax Laws. Learning is complusory when starting a small business.
Cash flow is the biggest single problem with starting a small business in New Zealand or Australia today. That and BAS (Business Activity Statement) submissions. GST requires you to pay 10% of your earnings to the ATO less your expenses. Unless you have a business that purchases capital equipment often it is most likely you will be writing a cheque to the ATO quarterly or yearly. A lot of small businesses have been ducking and weaving this in the past and now the ATO simply hand the file to Dunn and Bradsheet to collect or close you down. All businesses are tax collectors for the ATO in one form or another.
Most small businesses are essentially just buying you a job with far more responsibility than being an employee. Have a very good hard think about this before you engage in any business venture. You might make more money and you might not. Lethargy towards learning and developing yourself is not an option. The first thing to invest in when starting a small business is the right mind set and how to achieve and maintain that mind set for success. This is no easy feat. Just ask any successful business person.
These are our 10 Commandments for Staring A Small Business ~
People in business who are successful look at life very differently than someone who is an employee. Business people mix with other business people. Probably better explained as if you want to be successful, hang out with successful people! Remember starting a small business takes vision to be successful whether it’s a micro, small, medium or large size Company.