{"id":13427,"date":"2021-08-31T00:25:57","date_gmt":"2021-08-31T00:25:57","guid":{"rendered":"https:\/\/swoopfunding.com\/au\/?post_type=blog&p=13427"},"modified":"2024-03-27T11:14:38","modified_gmt":"2024-03-27T11:14:38","slug":"how-do-i-start-a-small-business","status":"publish","type":"blog","link":"https:\/\/swoopfunding.com\/au\/blog\/how-do-i-start-a-small-business\/","title":{"rendered":"How Do I Start a Small Business?"},"content":{"rendered":"\n

At the end of 2019, Australia had over 2.3 million businesses actively trading in the Australian economy. For a nation of 23 million, that is an encouraging number of entrepreneurs and innovators! If you are looking to start your own business, this article answers three frequently asked questions about business structuring, Intellectual Property protection and which online legal documents you will need.<\/p>\n\n\n\n

How Should I Structure My Business?<\/h2>\n\n\n\n

The simplest business structure is operating as a sole trader<\/a> where you trade as an individual rather than an incorporated company. The table below sets out the advantages and disadvantages of this structure.<\/p>\n\n\n\n

<\/td>Advantages<\/strong><\/td>Disadvantages<\/strong><\/td><\/tr>
Startup Costs<\/strong><\/td>
Low startup costs. You will need an Australian Business Number (ABN) and Tax File Number to start trading. Applying for an ABN is free and can be done online.<\/td>		None. This gives you more money to invest back into your business.<\/td><\/tr>
Liability<\/strong><\/td>None.<\/td>The liability of a sole trader is unlimited. This means you are personally responsible for any liabilities your business incurs. Your personal assets, like your house, may be up for grabs if your business runs into trouble.<\/td><\/tr>
Control<\/strong><\/td>You have complete ownership and control over the business.<\/td>None.<\/td><\/tr>
Tax<\/strong><\/td>This depends on your personal circumstances. The Australian Tax Office treats business income as personal income, and you pay income tax at your nominal rate.<\/td>You are personally liable for all tax on your business\u2019 income. You cannot share business profits and losses with family or friends.<\/td><\/tr>
Administrative Requirements<\/strong><\/td>You do not need to pay to register a business name as you do not need one (i.e. you can use your personal name to trade). You do not need a separate business bank account, but the law requires that you hold onto your financial records for at least five years.<\/td>None.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

As your business grows, you can change your structure from a sole trader to a company<\/a> relatively easily. You can do this by lodging an application through the Australian Securities and Investments Commission (ASIC) to register your company. The primary benefit of a company<\/a> includes limited liability. Hence, your personal assets are separate from your business assets.<\/p>\n\n\n\n

Should I Register a Trade Mark?<\/h2>\n\n\n\n

If you are not trading under your personal name, you need to register a business name<\/a>. You can do so online with ASIC. However, registration does not give you exclusive rights to use the name. The best way to obtain this exclusive right to use your business name is by registering a trade mark<\/a>. This is done online with IP Australia.<\/p>\n\n\n\n

A trade mark is a sign that distinguishes your goods or services from another person\u2019s goods or services. You can register a trade mark for your\u00a0business name, slogan or logo.\u00a0IP Australia maintains a national register of trade marks, putting other traders on notice that you have the exclusive right to use a mark.<\/p>\n\n\n\n

As your business grows, your business name and logo will become some of your most valuable assets. You should take steps to ensure that you can use these marks exclusively. The risk of not registering a trade mark is that another business may be able to register a similar mark and prevent you from registering your own.<\/p>\n\n\n\n

Trade mark registration is a low-cost preventative action you can take early in your business. Trade mark registration costs are much less than the costs associated with trying to protect an unregistered trade mark or defending an infringement claim.<\/p>\n\n\n\n

What Legal Documents Do I Need to Sell Online?<\/h2>\n\n\n\n

If you are offering goods or services online, you will also need legal documents to protect your business. These documents feature on your website. <\/p>\n\n\n\n

Privacy Policy<\/h3>\n\n\n\n

A privacy policy is a document that explains how your business handles personal information. It should act as a guide for how your business collects, holds, uses and discloses personal information.<\/p>\n\n\n\n

Personal information is information that can be used to identify a person, whether true or not. Your business probably collects all sorts of personal information, such as: <\/p>\n\n\n\n