AMBITIOUS entrepreneurs starting a business without doing their homework first could lose more than a forgotten tax deduction in the long run.
Officeworks spokesperson Justine Davies (pictured) says Australian Bureau of Statistics figures show that 50 per cent of new businesses stop trading within four years.
"I think it can be tempting to rush straight in with a fabulous business idea for small business owners," Davies says.
"But you need to take a step back and look at the big picture. Set up a business plan mapping out what your goals are, what your strategies are, what sort of cash flow you're going to need to succeed and also a really good competitor analysis to see what's out there and where you're going to fit into the market.
"A mistake that a lot of businesses make is not doing that homework before they start."
Once the business is operational, Davies says it is crucial to manage day-to-day expenses to stay afloat.
"If it's the first time someone has set up a business, they might not be aware of what all their running costs are going to be and how hard it's going to be from day to day," she says.
"If your paperwork isn't organised and you don't know where everything is, at the end of the financial year you're probably not going to be claiming everything back on tax that you otherwise could.
"Simply because you don't have the paperwork to back it up."
Davies has more than 15 years' experience in financial services, including her role as finance editor at consumer ratings website Canstar, and says the biggest change in the business landscape has been technology.
"There's so much more competition now in terms of digital," she says.
"I think that it can make it both easier and harder. Easier to attract clients if you do have a good online presence or harder if you're not tech-savvy as well.
"If you don't have an online presence, you're cutting yourself off from a big portion of the market.
"If you're setting up a bricks and mortar business, no matter what type, having a digital presence is so important nowadays even if you don't sell your products online."
Davies shares her top ten tips to maximise a new business owner's dollar:
1. Have a written business plan: Mapping out your goals, strategy and the steps needed to achieve success will drive direction and provide a clear business path from day one.
2. Familiarise yourself with your financial obligations: Before setting up your business you'll need to decide on a business structure, apply for an ABN, register your business name and website, organise any licenses you'll need and understand your tax responsibilities. All of these things, if you do them properly, will save you money in the long run. Visit business.gov.au for guidance.
3. Invest in accounting software: The key to a successful business is a detailed and realistic budget, plus excellent cash flow analysis, which is why accounting software will be invaluable. Ask an Officeworks team member at any of their 153 stores nationwide to help you choose the right software for your needs. They also offer longer trading hours, installation services and on-site support should you encounter any issues.
4. Furnish simply: Unless clients will be visiting your office frequently, it doesn't need to be decked out in expensive furniture. Clean, simple and matching furniture can create a pleasant space without the extravagant price tag.
5. Be organised: Invest in sufficient filing and storage solutions. A tidy, organised workspace will reduce the amount of time spent chasing paperwork and ultimately impress your customers. Additionally, consider a shredder to dispose of unwanted paperwork securely.
6. Start digital: Scanning important documents and saving to a USB or hard drive may be more economical and environmentally friendly in the long run depending on your needs. If you need to refer to documents on a regular basis, chat to an Officeworks team member regarding the most appropriate at home printer for you.
7. Buy in bulk: Be smart about stocking up on office supplies by thinking ahead. Take note of how often you need to replace basic essentials such as ballpoint pens or storage containers, and consider buying in bulk next time you're at Officeworks you'll be pleasantly surprised with how much you can save.
8. Stay connected: Particularly for micro or small businesses, it's crucial for customers to be able to contact you whether it by via smartphone, tablet, or laptop. Small business owners and employees often juggle many roles so you may also require a wireless printer and scanner to stay connected on the go. Depending on your business, there could be a need for a mobile point of sale payment device - ask your financial institution for more details.
9. Get insurance: All your hard work getting your business off the ground could be ruined without insurance to cover both yourself and your business premises. Talk to your adviser about personal insurance for your life and income, property insurance for your business and liability insurance.
10. Know what you can claim on tax: Make sure you keep records of anything that might be tax deductible. This could include your office furniture, stationery, utilities, phone bills and insurances. Take a copy of all paperwork to your accountant to seek professional advice.
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