So you want to be an Entrepreneur

So you want to be an Entrepreneur…

You have had this great business idea bubbling away at the back of your mind for a while now and it feels like the right time to make it happen, but how? From one Mumpreneur to another, starting a business is not easy! As much as I would like to say it gives you the flexibility to set your own time frames and manage your own destiny, unfortunately the reality is that you often spend a lot of your so-called “free” time working on your business outside of work hours! But with a bit of forward planning and research, you can get your business set up in the right way early on and hopefully avoid some of the more costly mistakes that can occur when starting a business.

First, you need to think about how you want to structure your business as a legal entity – are you going to be a sole trader, a partnership, or a company? If you are going to register a company, who will be the shareholders – you, other family members, a family trust? When you are trying to decide on the right business entity, you need to consider the right structure for your business right now, but also think about how your business is likely to change in the future. It might be quicker and simpler when you are just starting out to be sole trader, but what if your business grows and you decide to take on a partner to share the load, or your level of risk increases and you need the sort of asset protection that a company or trust could offer. These are all important considerations when deciding on a business entity as well as the financial, taxation and reporting requirements of each structure. Get some legal and financial advice regarding the various types of business structures available before you get started so that you can make the best choice of business entity for your circumstances.

Another issue to consider before you get started is what legal documents you may need to get in place in order to set up and protect your business for the future. Depending on the type of business and the business entity you have decided on, there could be a number of things you need. A company constitution or trust deed will be required if you are going to operate as a company or a trust. A partnership or shareholder agreement can be crucial to sorting out potentially costly disputes later if you are operating as a partnership or company. If you are a professional services business, you may need a template contract for your clients to enter into so that the services to be provided and fees are properly disclosed. If you are engaging subcontractors, a subcontracting agreement should set out the agreed payment rates for work performed and timing of payments as well as the requirements for the subcontractor to have their own insurance in place. These are just some of the more basic examples of the sorts of legal documents a business may require. Keep in mind that any legal documents also need to be reviewed at regular intervals to confirm that they continue to comply with any updates in the legislation and remain suitable for your business as it grows.

Like all great ideas, you also need a place where your business can grow and thrive. If you are planning to work from your home, check with your local Council regarding any restrictions in your residential zone – these commonly include restrictions on the number of signs/advertising you can have at the property, the number of employees a home business is able to have onsite, and any parking considerations that may be required for customers. Be aware that if you use a specific area of your home to generate income, you could be liable for capital gains tax in the future. If you are going to lease a commercial space for your business, make sure you understand the terms of the lease, the period it applies and whether you have an option to renew the lease in future should you wish to do so. Whether you are going to be working from home or a commercial space, ensure that you have the appropriate public liability or other insurance in place in case of any accidents.

If you are thinking about starting your own business, these are just some of the early issues you could face. The best thing you can do is get the right information and plan ahead so that you can get started on the right foot. It is going to be a challenge, but it could also be the start of something great.

This business owner will be celebrating the first birthday for WNB Legal on 1 May 2021. To my amazing clients that have either moved with me or have decided to engage my services in the last 12 months, my supporters who have gone above and beyond to help me make this work, and to all my fellow local business owners that refer clients to me regularly, you have all been wonderful and my little business has grown substantially and become a success thanks to all of you. I am looking forward to many more business birthdays in the future. Cheers! KC Hilton, Solicitor, WNB Legal.