1 – Do you know where to find support and advice?
WHEN starting a business, there is a range of advice and support available from government and other organisations.
This includes information and advice on managing cash flow, stocktaking, and obtaining funding and training.
For information get in touch with the nearest government funded small business advisor using the Advisor Finder search tool.
Just enter the type of advice that is wanted, the industry and location, and Advisor Finder will produce a tailored map with details of the nearest advisors.
The site business.gov.au provides an initial point of contact to get access to information and referral services that assist small businesses, including independent contractors.
Chat online with questions about business, business information, using business.gov.au, referral services and other queries at business.gov.au – Web Chat.
2- Do you know what business events are happening near you?
SMALL business workshops and seminars are run regularly in most areas of Australia and deal with issues such as planning, financial management, innovation, employing staff and exporting and expanding businesses.
Developing networks enables businesspeople to keep up to date with industry and local information, promote business through new contacts and learn key skills from other businesses.
3- Do you know whether your activity is a business or a hobby?
BUSINESSES pay tax on the money they earn, can claim for deductions on expenses and generally need an Australian Business Number (ABN). These do not apply if an activity is a hobby.
4- Do you know how to develop:
• A business plan.
• A marketing plan.
• An export plan.
• A succession plan.
• An emergency management and recovery plan.
5 – Have you worked out your best source of finance?
There are several sources to consider when looking for finance for your business, such as:
• Loans from a bank or other financial institution.
• Using personal savings.
• Borrowing money from friends and relatives.
• Chattel mortgages.
• Finance leases.
• Venture capital.
• Government funding.
Contact a business advisor for advice. Also consult your accountant or solicitor.
6 – Do you know which business structure suits your business?
Before starting a business, you should consider the advantages and disadvantages of each type of business structure and decide which best suits your needs.
Your business structure can affect the safety of your personal assets and taxation obligations.
A change in ownership of an ongoing business may require a new registration to be made depending on the type of structure the business operates.
• Sole trader
A sole trader is a type of structure where the business has no separate legal existence from its owner.
Sole traders need to be responsible for their business liabilities.
They need to report their business income on their personal income tax return, along with any other income.
• Partnership
A partnership is a type of structure where two or more people start a business and can legally share profits, risks and losses according to terms set out in a partnership agreement. They must lodge a separate partnership income tax return.
• Trust
A trust is a relationship where a business is transferred to a third party who has legal control and has a duty to run that business to benefit someone else. You must lodge a separate trust income tax return.
• Company
A company is a legal entity separate from its members (shareholders). A director of a company has additional legal and reporting obligations. They must lodge a separate company income tax return.
7 – Are you an independent contractor?
It’s important for a businessperson to establish if they’re considered a contractor or an employee under common law before they enter into a contract with a hirer, as their status will determine which laws apply to the contract.
For example, contractors need to be treated differently to employees for tax and superannuation purposes.
It is possible to be an employee for some work and a contractor for other work.
Having an Australian Business Number (ABN) does not automatically make you a contractor.
8 – Are you aware of your taxation obligations?
Contractors have different taxation obligations to employees. For more information, visit the Australian Taxation Office (ATO) website at ATO – Business or phone the ATO Business tax enquiries line on 13 28 66.
9 – Are you aware of your superannuation entitlements and obligations?
10 – Do you know what to consider when charging for your services?
Unlike employees, contractors are not entitled to a minimum rate of pay or conditions such as annual leave, sick leave and redundancy entitlements.
Fees are a matter for negotiation between the parties.
However, it’s important that the fee covers the true cost of providing the service, including the costs associated with running a business. It also helps to know what competitors charge.
11 – Do you know your Work Health and Safety obligations?
12 – Do you know your Paid Parental Leave entitlements?
13 – Do you have workers compensation insurance?
Some contractors are entitled to receive superannuation. Contractors may choose to arrange their own super contributions.
14 – Are you aware of Intellectual Property (IP) related issues?
Although contractors may have created or contributed material to products and ideas they may not be entitled to IP ownership of these items. This will depend on the contract.
15 – Do you know what to include in a contract?
Avoid disputes and misunderstandings with hirers by making written contracts. Getting the contract right in the first place means fewer problems down the track.
16 – Try to prevent problems and deal effectively with things when they do go wrong
Try to prevent disputes, as they have the potential to take up time and resources away from growing a business. Read Business Victoria’s publication Independent Contractors: Preventing and Managing Disputes.
For more information on all these subjects go to business.vic.gov.au.
