Business Frequently Asked Questions
Starting/Buying a Business
Do I need a registered business name? Yes,
if you are not using your own name. Companies do too if they are
using another name.
Do I need a business licence? Many specific
industries need a licence(s) or registration(s). Check with
us.
How much should I set aside for starting my business?
We strongly recommend preparing a realistic budget or cash
flow projection that will allow the purchase of stock,
allowing two to three months of credit, meeting your finance
obligations, income tax, GST, etc...
What risks are involved in starting my own business
Many risks are undertaken when starting in business. If you
haven't worked in an industry before there are many
more inherent risks. It takes a certain personality to cope
with the need to ask for help in things you're not skilled
at. Your homework may be optimistic but there will be laws
you didn't know about. You need to concentrate more on how
you will manage and profit from your business rather than
how you will deliver your product or service, leave the
technician behind.
Is it better to be a sole proprietor or to be incorporated?
The answer to this question depends on the specific
circumstances. It may be simpler to be a sole proprietor,
and in other cases it may make more sense to incorporate
because of risk. If you make the wrong decision there are
stamp duty and capital gains tax implications if you need to
change so our advice to you is really for you to seek advice
.
What should I be aware of when buying a business?
Be
wary when promised cash in hand - buy only on figures in tax
returns etc... Do as much homework on the vendor as you can
. Will he/she really retire, is there another business that
could inflate figures, watch for cost cutting too - stock
being run down, advertising not being renewed.
What government subsidies are there to help me start up? No
government will put money into your business to get it
going. There are specific programs however, such as R & D or
COMET and even export grants. Check out
The Government Business Entry website
for more
Running a Business
How can I cut costs in a recession? It
is not easy. Its tempting to run down stock, run down
marketing and to cut margins to compete but you won't have a
business left. You must have sufficient working capital to
begin with. A business living on borrowed money will
invariably get into trouble.
We believe in
focussing on income, though cutting costs is wise if
variable costs are excessive but there's a limit to how many
costs can be cut; income can grow indefinitely if the
business plan is sound.
What are the warning signs of fraud in my business? Its
best to prevent fraud by implementing documented systems and
procedures to deter, or make difficult, any opportunities
for fraud.
Watch for anyone
who won't take leave. Unusual stock returns. High debtors
write offs, or high cancelled sales. These all point to
someone who doesn't want to be found out, taking stock off
the shelves, & pocketing cash from customers. Talk to us
about those systems to prevent fraud.
Business
Development questions of interest.
How do I develop my business?
A Unique Selling Point is essential to stand out from your
competitors otherwise you're just competing on price. There
are too many possibilities to cover here. But you think your
product is similar to your competitors, then focus on the
service before & after the sale. Can that be made different?
How do I get my staff to perform? Every team
situation is unique, but here a few tips: Hiring staff
should be based on attitude. The function can always be
taught. People are your biggest asset and staff turnover can
be very costly in downtime & retraining. Make the positions
as interesting and varied as possible. Define
responsibilities and expectations. Monitor employee
performance. Your staff need to understand what’s
expected. Be clear with instructions. Its not their fault if
they don't understand, its yours; if staff don't understand it
is not their fault but generally yours. Trust them. Allow
for some mistakes. We all do respond to trust. Be clear when
delegating. Set the boundaries of what to do, how to do it,
when to do it and what not to do. Don't take over when
problems happen but intercede if no apparent headway is
being made and there may be an adverse cost incurred.
Show them how to fix it bearing in mind that if you need to
fix the problem you may have the wrong employee in the job.
Give regular feedback. Its human nature to criticise but try
to compliment where it is due. Good work is "expected" So
keep them informed. Lastly, remunerate on performance,
this is critical.
What interview questions should I ask potential employees?
When candidates are nervous,
they may not be at their best.
So, ask questions that will make them comfortable and get
them to talk. Ask them to go over the résumé in their own
words. Ask about problem solving situations. Explore
some particular given examples. Ask some questions that will
flush out their personality. Would they work in a team or
prefer working independently, how would they handle deadline
pressure, what are their future aspirations & how this job
will assist them. How would friends describe them, even what
may be a favourite book & why. Whilst first impressions are
critical this line of questioning should prove your first
impression.
How do I get new clients/customers Are you sure
that is the only answer? The cost of acquiring new clients
is many times higher than working with or retaining existing
clients. Ask us about your Profit Improvement Potential to
highlight some differences.
New client/customer
strategies differ from business to business.
You need
to plan, & test the results. Some things to think about are
1. Just sell: Make calls, have meetings, put in tender
proposals, whatever
2. Marketing: Too many
techniques to cover here, but remember to test & measure
each strategy
3. Referrals:
Don't be frightened to ask for referrals of the clients
you want to have
4. Alliances:
Partner with others. Look for those alliances
Why is a business plan important Fail to plan,
plan to fail. Have a goal, do you prefer to either
drift along & see what happens, or plan to get there.
Most small business
fails at a rate of 50% in the first year, 80% are by 5
years. A successful business has a plan.
What should it contain? Business plans are
often provided to banks or other sort of financier,
look at it from their point of view. For example the history
of the product or service outline, the market share, your
product or service' placement in the market; what are the
market trends, your targets, what are the constraints to
growth, what do you need to grow? What are all the details
for management, production, IT, capabilities, strategies &
time lines etc...within your business. Have you done a SWOT
analysis?
What's an exit strategy? Why is it important?
One day you will want to retire, how you do that and
maximise your price when you sell depends on how you plan
your exit now.
Too many businesses
just close their doors. Make sure yours is valuable
because it’s a turn-key operation.
Disclaimer
We recommend you seek specific advice about your specific
issues. The information here is general in nature and
neither purports nor is intended to be advice on any
particular matter.
Neither
Ashfield Taxation Services or any member or employee
undertakes any responsibility in any way whatsoever to any
person in respect of this information, including any errors
or omissions herein howsoever caused.
Business Home|
Business Development |Industry Comparisons
| Frequently asked questions
in business|
Business Links