You’ve got an idea, you’ve done your research and you’re ready to hit the throttle. Then you realise you haven’t got the first clue where to start. If you’re bootstrapping your business, you don’t have the cash to splash out on financial and legal advisors right away. You need to take the do-it-yourself route wherever you can and make your pennies go as far as possible.
If you’ve come up with a product or service that’s new to the market, you’ll also be in a rush to get to market as soon as possible.
Here are our top tips on how to make your dollar go further and get started fast when setting up your own business:
1. Check the trade marks register and business name register
If you’re ready to go, we’re betting you’ve already got a name in mind. For some this is the easy bit, while for others it takes months (if you’re still struggling with this one, check out some tips for coming up with a business name). Nevertheless, once you’ve got your name, do yourself a favour and check IP Australia’s trade mark register for your chosen name. Do this before you start using any business name, as you might be unknowingly infringing someone else’s trade mark (in which case you can expect a nasty cease and desist letter in the mail, which may or may not be accompanied by a request for financial reparations).
If it’s in the register, check if the class of goods or services it’s protected in is the same as the class your business will be operating in. If so, in most cases it’ll be back to the drawing board (if you’re absolutely tied to the name, think about talking to an intellectual property specialist about other options that may be available).
Once you’ve cleared the trade marks issue, check the business name register to make sure the name is available.
2. Decide on a business structure
Choosing the right structure for your business is a crucial step in your start up journey. The consequences of using the wrong structure can be disastrous. On the other hand, if you pick the right structure, you can enjoy benefits including paying less tax, protecting your personal assets and making your business more attractive to investors.
Do your research and assess the various options against your personal circumstances to decide which structure is the best for you.
A company is one of the most popular structures for business owners in Australia, primarily for its advantageous tax rate (at the time of writing, 30%, or 28.5% for small businesses) and the ability to limit liability of shareholders (shielding the personal assets of the company’s owners from business creditors). If you decide to operate your business through a company, and you don’t anticipate a complex structure, you can register a company yourself quite easily online: you can head to the Australian Government website or check out eCompanies to register. There are plenty of other online companies that offer company registration as well – a quick Google search will bring those up.
3. Apply for an Australian Business Number (ABN) and register your business name
Once you’ve registered your company (or set up your other structure), you’ll need to apply for an ABN for the business. If you’re operating other than as a sole trader, this will be different from your personal ABN.
Once you’ve got your ABN, you can apply to register your business name online.
4. Apply for a Tax File Number (TFN)
You’ll also need to apply for a TFN if you’re operating a company or trust. This is separate from your personal TFN, and means you’ll need to file a separate tax return for the business entity.
Many entrepreneurs can’t afford an accountant straight out of the gate, and if that’s the case it’s worthwhile spending some time familiarising yourself with your tax obligations, to make sure you don’t end up handing a shoebox full of faded receipts to a busy accountant at the last minute come tax time. The ATO runs free seminars and has an excellent video series on tax basics for small business available online.
5. Open a business bank account
If you’re operating other than as a sole trader, you’ll need to keep your personal and business funds separate, so you’ll want to set up a business bank account. Many lenders offer specialist business accounts.
The bank will need to see a copy of the certificate of incorporation for a company or trust deed for a trust, and you may need to visit a branch to provide proof of your identity if you’re not already a customer of the bank.
6. Use free images for your website and socials
Make sure you familiarise yourself with copyright law before you start using images for commercial purposes. The Australian Copyright Council’s website is an excellent free resource to help you understand your rights and obligations. Beware of online forums and Facebook rumours on copyright – there are plenty of myths going around that are based on American copyright law or are just plain false. Always do your own research and consult a copyright specialist if in doubt.
There are several sites where the creators of images make their work available to the public, such as Pexels and Unsplash. Check these out to get started with images for your business – just make sure you comply with any attribution requirements.
Never use images you find on the internet (such as Google images search) without fully understanding their copyright status. If you find an image you want to use, contact the copyright owner and ask for permission to use the image. Make sure you get that permission in writing. If you’re unsure - err on the side of caution. Large image libraries like Getty Images can and do pursue claims for copyright infringement.
7. Apply to register a trade mark
You can also use the IP Australia website to apply to register a trade mark online. If it’s your first time, you’ll want to use the TM Headstart service – a pre-application service where a trade marks examiner will check your application before you officially lodge it and alert you to any issues with the application. This will save you time and money by giving you the opportunity to correct any errors with your application before filing (whereas an incorrect application officially filed may be rejected and filing fees forfeited). An application is by no means a guarantee of registration, so if you have any doubt it’s best to see a trade marks specialist to help you.
8. Sign up to industry organisations in your field
Find industry organisations in your field online and sign up (especially if membership is free). They do all the hard work for you and often provide free industry updates via email, keeping you up to date on relevant changes to laws that might affect your business. Some even offer templates, such as the Arts Law Centre of Australia, which offers a wide range of discounted templates to subscribers.
Reusable templates are a great tool to get your business up and running quickly – if you can find templates from reputable suppliers, which are suitable for your business and circumstance and you’re confident you understand and can use them appropriately.
If you can’t get your hands on a suitable template, at least make sure that you reduce all your agreements– with partners, collaborators, suppliers and so on – to writing. If you try to rely on a “handshake deal” or verbal agreement, there’s a lot of scope for misunderstanding, which frequently ends up in fights, relationship breakdown and can even lead to business failure.
Something is better than nothing in this case, so even if you don’t know if what you’re writing is “legally correct”, write it down as best you can anyway. Lawyers will often charge less to review a document than to draft it from scratch, so splurge if you can, especially if it’s an important deal.
9. Get cyber secure
Put a cyber security policy in place. Get familiar with best practices in your industry: password protection, need-to-know access to secure information, reputable anti-virus software and so on. Set this out in an internal policy document and make sure you stick to it.
10. Take out insurance
This is a case of money you can’t afford not to spend. Think about the risks in your business that you can’t reasonably protect, then seek out appropriate insurance to protect against those, such as loss or damage to business equipment and tools, loss of income due to illness or injury and public liability. There are plenty of options available online, including exclusive deals for small business. Just make sure you read the policy and check it’s right for you.
If you’re running an online business, you can’t go past cyber insurance these days. With ransomware attacks on the rise, cyber insurance is a worthy investment, with policies offering access to a team of cyber nerds who’ll help try to recover documents in the event of a ransomware attack and even pay a ransom in the event it’s necessary.
The wrap up
Thanks to the internet, there are plenty of ways to save time and money when starting your own business. The important thing to remember is that once you’ve got proof of concept and you start making money, your business will quickly outgrow a DIY approach. Re-invest with professional legal, financial and tax advice as soon as you can afford it - get strategic and see your business soar.
About the author:
Courtney Bowie is the founder and principal of Her Lawyer, a virtual law firm for ambitious women in business. Find out more at www.herlawyer.com.au or contact Courtney at email@example.com. You can connect with the Her Lawyer team on Facebook at www.facebook.com/herlawyerau.