Question: I’m thinking of starting a retail business and although I have an ABN, I have not registered for GST because I do not expect that I will earn the specified amount. However, as a retail business, I will be charging my customers GST on the products they buy. How do I calculate and put aside the GST portion for the Tax Office?

Answer: If you are thinking of starting a retail business then you should register for the GST. GST is more than just 10% and a $50,000 threshold. Registering for the GST allows you to claim back input tax credits that are applied to the goods you are selling and any other goods you purchase for your business, such as stationery etc. Plus, if you are selling products which have GST added to them, you will need to give that tax back to the ATO. To do this, you will fill out a Business Activity Statement which will help you calculate how much GST you will have to pay. You should have a separate bank account for your business which will help you keep track of your funds and work out how much GST and other tax you will need to pay. A good accounting software package will help with this too. I suggest you talk to an accountant about how to ensure your business is set up correctly and what accounting records you will need to keep in order to comply with government regulations.

Filed under: Starting a Business, Accounting & Tax | Post a comment

Question:
How do I find out what licences I need if I run my business from home? I’m in Brisbane.
Alex

Answer:
Alex, a good place to start is the Queensland Government’s Smart Small Business site, in particular, their page called
Getting the licences permits and registrations you need.

Filed under: Starting a Business, Legal Issues | 1 Comment

Hello Greyhound People!

A lot of you coming to this site will have seen our web address, SmallBusinessLibrary.com.au, as an Albion Park greyhound race name on Friday 10th November 2006.

We’ll very shortly be adding all manner of business articles, business software and gazillions of links to Australian government services and products for small businesses.

But at the moment, we’re only guessing what you want. So we need you to tell us.

1. ARE YOU RUNNING OR MANAGING A BUSINESS? (if not, see my next question)

If you’re already running or managing a business (or at least your part of one), what one thing would make your work life easier?

Seriously. If you could wave a magic wand, what one thing would you change, fix, eliminate, introduce, acquire, produce, save time on, figure out, learn or otherwise, to make your life easier?

It doesn’t matter how big or small it is, or whether you think it’s relevant. If it’d make your work life easier, let me know. (OK if there are two or more, you can include them, I’m just trying to make it easy for you, and help you focus).

2. ARE YOU, OR SOMEONE YOU KNOW, THINKING OF STARTING A BUSINESS?

Similar to my question above, but I recognise that your needs are a bit different to people who are already up and running. I’d like to focus on what information you’d like to have - what do you want to learn more about before starting your business?

Or, if you reckon you have or can get most things you need to get going, what’s stopping you from starting your business right now, today?

Leave your comments, questions and feedback in the form below

(Don’t see a form? Try this).
We need your email address to contact you, but it won’t be published. If you don’t want your question or comment published here, just let me know in your message - all messages have to be approved before they’re published.

Filed under: Business Blog, Starting a Business, Managing a Business | 7 Comments

Question:
I intend to start a small retail business, selling various giftware and books in a small town of about 1000. There is already another business in town which sells something similar and the owner has heard of my plans, through a mutual supplier. The owner of this store now has approached me about buying into my business instead and although I initially thought it would a good idea, I’m now having second thoughts, particularly as I do not know whether I could work with this person. Is the owner only doing this because of the threat my business could be? How can I involve this person in my business but not make her a partner or part-owner?

Answer:
Well, if she is not going to be a partner or part-owner, the only way to “involve” her would be as an employee. I would be suspicious though of why she wants to join your business if she has pretty much the same one already, particularly as she doesn’t know yet what sort of competition or threat you are going to be, if any.

It could mean her store is in financial difficulties and you may want to investigate that further before starting your own business. It could also be that a town of 1000 may not be enough to sustain the type of business you are thinking of, let alone two.
You will need to do some careful research first and prepare a thorough business plan. Your other option is for you to buy her existing business but again, you should thoroughly investigate it.

Filed under: Starting a Business, Buying & Selling a Business | Post a comment

Question:
I have recently moved from the city to the country and I am planning to start a new business there. I have already registered my business name, so can I claim on my tax return the cost of the move or for the purchase of my computer?

Answer:
I don’t believe so. You have not started your business nor have you moved your business so it is not a business expense, merely a personal one. Plus, capital equipment, such as a computer, cannot be claimed as a deduction if it has been purchased to start a company, only if it is purchased as part of a business’ ongoing operations/maintenance. You may, however, be able to “depreciate” your computer over time, depending on what it is used for.

I suggest you contact the ATO directly if you wish to confirm this or talk with your accountant. We don’t advise anyone starting a business to do so without first consulting with an accountant as an accountant should become the single most important “asset” of your business and can mean the difference between your business succeeding or failing.

Filed under: Starting a Business, Accounting & Tax | Post a comment

Question:
I’m thinking of starting a retail business and although I have an ABN, I have not registered for GST because I do not expect that I will earn the specified amount. However, as a retail business, I will be charging my customers GST on the products they buy. How do I calculate and put aside the GST portion for the Tax Office?

Answer:
If you are thinking of starting a retail business then you should register for the GST. GST is more than just 10% and a $50,000 threshold. Registering for the GST allows you to claim back input tax credits that are applied to the goods you are selling and any other goods you purchase for your business, such as stationery etc. Plus, if you are selling products which have GST added to them, you will need to give that tax back to the ATO.

To do this, you will fill out a Business Activity Statement which will help you calculate how much GST you will have to pay. You should have a separate bank account for your business which will help you keep track of your funds and work out how much GST and other tax you will need to pay. A good accounting software package will help with this too.

I suggest you talk to an accountant about how to ensure your business is set up correctly and what accounting records you will need to keep in order to comply with government regulations.

Filed under: Starting a Business, Accounting & Tax | 1 Comment

Question:
I am planning to import some lighting products from China and distribute them in Australia. Can I deal directly with the lighting shops or do I have to sell to some distributors first? Is there any distributor contact list for each industry? How can I establish business relationship with the retailers such as Big W, Woolworths and so on? Is there any trading fair to promote the products in Sydney area?

Answer:
As far as I am aware, there are no restrictions regarding dealing directly with lighting shops. However, you will need to do some research in the market to find out whether these shops are willing to purchase directly from you or prefer to deal through a distributor.

In order to find out who the main distributors are for the lighting industry, we suggest you visit the Yellow Pages online and they should have a comprehensive list for each state. We suggest that you also try to contact the relevant industry association as they will most probably be able to help you as well. If you have trouble getting in touch with the industry body, we suggest contacting a lighting shop as they will probably have a contact.

As for the big retailers, they tend to deal with certain distributors so you will need to contact the head office of these retailers to find out who these distributors are and who makes the decision to stock what items. They will also have their own criteria for what it takes to become a distributor for them.

Filed under: Starting a Business | 1 Comment

Question:
My husband and I are considering buying a Caravan Park in New South Wales. One that interests us presently is located in a National Park - the land and most assets are leased. It has 17 chalets, and about 140 sites. We would like to know what steps we should follow in assessing the profitability of the business, what information to request from the vendors and what professionals to engage to aid us to assess the information.

We are particularly unsure how to assess the leasehold aspect. We would like to do a preliminary assessment ourselves before getting professionals involved. What publications do you have, or know of, that would be of assistance to us in the purchase and running of this business?

Answer:
Obviously, your first step in assessing any business is to look at the accounts/books. While you can do this yourself, I would recommend you hire an accountant for an eventual thorough review.

You should also find out the history of the site, how much tourism there is in the area, visitors to the national park etc. Tourism NSW may be able to help you with information on entering the tourism industry plus reports on the estimated tourism for a certain area.
As far as leasehold is concerned, you need to find out which government organisation manages the land and for administration so you can find out if the government currently has any additional plans for the land or surrounding areas. You will also need to see a copy of the “lease” so you will know exactly what can and can’t be done on that land and what your responsibilities are. You should also find out when the lease expires, whether you are then able to extend it and if there are any conditions on selling the lease. The owners or government department should be able to help you with this.

At the same time, you should ask the owners why they are selling the business and check with the local government department in the area you are considering to make sure there are no future projects which could adversely affect your new business, such as a new highway which would take tourists away from the National park or a motel being built nearby etc.

In addition to assessing the business’ profitability, you also need to develop your own business plan to see whether it will be financially viable for you. Having a rough idea of the income the park currently generates will help in this regard.

Filed under: Starting a Business, Buying & Selling a Business, Legal Issues | 1 Comment

Question:
I am applying for the Australian distributorship of a boat shoe brand and I have to provide a marketing plan. Where can I get figures of boat shoes imported in to the country during 2001? Australian Customs? Any other resources?

Answer:
I think your first stop should be AusTrade rather than Customs. They may have some statistics on who is importing what, or have an idea of where you can go for more detailed information. As mentioned, you can, of course, try Customs.

You should also ask your supplier whether they have any figures about the shoes and if there are any other distributors in Australia. If there are other distributors over here, you can always call them as a “retailer” and ask a few pertinent questions!

An outside chance might also be the Australian Bureau of Statistics and AusIndustry.

Please note, however, that the above is very much in the realms of ’secondary’ research. I think what you really need to look at is what your individual product is going to do. You are releasing a new range of existing product and will either extend/expand the market or take custom off existing products. One way to work out which, and thereby give you an idea on how to market your product, is through primary market research and the development from that of a business plan.

Filed under: Starting a Business, Government Assistance, Marketing | Post a comment

Question:
I want to start a small business in leather especially for cow leather, but only processing raw material to be used by factories to produce their products. The questions that I have are:

1. What is the procedure (processing scenario) that after I received the leather from the “cow copper”.
2. What kind of equipment is required to process it?
3. What kind of chemicals are required?
4. How about the waste and how to eliminate or reduce it?

Answer:
Unfortunately, we do not have the specific information you require for this sort of primary production business. You should contact AusIndustry in your State; or the Textile, Clothing, Footwear & Leather Industry Advisory Body on (03) 9866 8962.

You will also need to contact the Environmental Protection Agency in your State regarding disposing of waste material.

However, while we don’t have specific information regarding leather production, our library has a wealth of information geared specifically for small businesses which will help in the operations of a business. For instance, it will provide guidelines on how to create a business plan, something you will undoubtedly need if you are going to obtain finance for your new business. It also covers areas such as managing and growing your business which will be invaluable once you start your business.

Filed under: Starting a Business, Industries | Post a comment