Set Yourself up for Life
Human nature can truly be both a wondrous and frustrating
creature.
I met an acquaintance of mine recently over lunch and before I
could open my mouth to complement her on her choice of venue,
she immediately started regaling me (well, battering me really)
with details of a new business she had just established.
My friend (let's call her Christabelle - hey, I like the name
OK?) had just commenced business at home as a distributor of
hair care products and was eager to tell me her business plan
for the next year.
Given the numbers she was talking it sounded as if she was going
to be the next Loreal.
"Where are you storing all the stuff?" I asked, "Have you rented
premises somewhere?"
"No, that's the beauty of it. I'll save money by storing it in
my spare bedroom" she replied.
"But what if something goes wrong and it all gets stolen or
leaks or used as mouth wash or something?" I countered.
"Well, duhhh! Have you ever heard of home contents insurance?"
she responded.
"Sure, but that won't cover you and what about any negligence
claims?"
It was at this stage that Christabelle expressed her years of
business wisdom with the immortal word, "What?".
As I explained to her that quite a few home contents insurance
policies have exclusions for a business being conducted on the
premises and that steps should be taken to protect her if any
customer wanted to sue her for negligence if they somehow didn't
use the product properly (like eating it or something), I could
see her rapidly beginning to deflate.
Not wanting to stifle her entrepreneurial flair, I attempted to
rectify the situation with the reassuring words "Well, don't
worry. If anything did go wrong your business structure should
protect you to some degree."
"What do you mean business structure?" she replied.
At this stage I felt it prudent to order a bottle Chardonnay to
cushion her as I attempted to explain the benefits of setting-up
a business in Australia correctly, to take advantage of
taxation, protection and other business benefits.
I could see that my words were slowly starting to sink-in but I
had a further meeting to attend (and the Chardonnay had run dry)
so I told her not to worry and that we would discuss her
position the next day.
To cut a long story short, Christabelle was eventually able to
sit down with an accountant and insurance broker to look at her
business and determine the best way for her to proceed, to allow
Christabelle to concentrate on what she does best - selling!!
Is there a moral to this little tale?
Don't skimp the dollars when it comes to advice!! Actions taken
to save money in professional fees at the outset usually result
in twice as much being paid to rectify the problem down the
track.
For example, if you are thinking of selling your business down
the track, do you know if your current business structure will
allow you to pay NO tax on any gain you make on its eventual
sale? You didn't? Naughty-naughty!
Business regulations in Australia ARE complicated - that's why
you should discuss them with experts!
Don't let a fantastic business idea get flushed down the s-bend
simply because you wanted to save a few dollars. If you set-up
business correctly at the beginning, you'll be set-up for life!