For businesses costing under $350,000, a Vendor's Statement (or Section 52 Statement External link (opens in same window)) must also be provided by a seller to a prospective buyer. Learn more about long service leave. Business profits In buying a business, you need to make sure it will continue to make a profit by checking the following: Commercial life of the business The value of a business fluctuates throughout its commercial life. For instance, changes in the economy, the need to replace failing equipment, and cancelled contracts will all impact on the viability of the business and its ability to remain profitable. A business can't always be resold later for the same amount of money. For example, if you're running a corner store and a large supermarket chain opens down the road, this will devalue your business. Opportunity costs The cost of passing up the next best choice when making a decision to invest represents opportunity costs. This accounts for the purchaser missing the opportunity to get income from other possible investments, such as earning an income, or putting the money into a term deposit. Work out your finances Find out how much it costs to take over the business. Seek out possible sources of financing and speak to your financiers on loan or investment options. Checklist: How to Start a New Business in Australia Starting a new business can be very rewarding and provide an opportunity to achieve greater work-life balance and pursue your passions. However, a lot of prospective small business owners don’t have much background knowledge in terms of how to get their new business up and running. We’ve put together a checklist to get the basics right when you’re starting a business so you are well prepared. There is a great deal to think about when starting a new business, from product development to marketing and from IT issues to finance. The distractions and demands are numerous.
However, if you get the set-up of the business right, meaning the basic registrations and systems are in place, then you are preparing for success in a business environment that naturally encourages performance. 1. Figure out the best business structure Are you better off as a sole trader, partnership, trust or company? Each has its own advantages and comes with specific tax reporting responsibilities, regulatory necessities and work health and safety obligations. Speak to your accountant or lawyer to find out which best suits your current, and future, structure. 2. Where is your funding coming from? If your business needs funding, discuss with your accountant the pros and cons of each option, whether it be banks, venture capital, personal savings, personal loans or one of several other options. 3. Decide on a business name and get it registered It’s very important that you make sure you can register your business name or company name before having business cards, letterheads, logos, websites and so on designed, and before purchasing a URL. Is the name accepted by the Australian Securities and Investments Commission (ASIC) and is it available? Start the process at ASIC Connect. 4. Should your business name or logo be registered as a trademark? Do you need to protect your business name or logo? What about patent or copyright protection? For a proper understanding of intellectual property issues, visit IP Australia. 5. Apply for an ABN If you’re going to be registered to collect GST (annual turnover of $75,000 or more), then you’ll likely need an Australian Business Number (ABN). To apply, visit the Australian Business Register. At the same time, if you’re opening a partnership, trust or company then it will need its own Tax File Number (TFN) from the Australian Tax Office (ATO), too. 6. Familiarise yourself with PAYG withholding responsibilities Employee salaries must have taxable amounts withheld from their payments. Certain contractor payments must also receive a similar treatment.