Figures from the Australian Bureau of Statistics show Australians are still keen to be their own boss with new business entries continuing to rise. However, it is important to consider some important planning points before you leap into a new enterprise.

• Make sure you have a business plan.

Failing to plan is like planning to fail, right? Putting pen to paper and writing down your objectives and strategy for the new business is essential before you start. This means you have to face tough questions like projected cash flow, profits, marketing including an articulation of how your product really stands against existing competitors that are already out there. It means you will think through problems that might occur before they happen and come up with contingency plans. It is important to get an adviser on board during this early stage to provide an outside perspective that will help you through the process.

• Working capital

You need to consider how much capital you can invest in the business from the beginning. You need to have enough money to last for the first three months. If you register for GST, you must ensure you have funds to pay the quarterly payments. In addition, you may also need to cover rent, stock, equipment, insurance fees, and, if relevant, employee wages. Business loans can be sourced at good rates from financial institutions, but it is important to get some independent advice from an accountant before deciding on the level of debt you propose take on.

• The best structure for your business

How you structure a business from the beginning will be crucial. You must decide if you will operate as a sole trader, a trust, or a company. Each structure has different advantages depending on your circumstances and if you employ staff. You may need to consider a company structure if you want to distance your personal assets from your business.

• Invoicing and accounting

The most important part of running a business is invoicing and tracking when you get paid. There are now many automated software packages that will make that job much easier. Consider a package like Xero which can do a lot of the hard work for you – good business software can help you automatically invoice clients, monitor payments and can even keep track of your projected cash flows. Ask us for details as dmca advisory specialises in designing customised Xero packages for small business in a variety of industries.