The logistics of starting a business from scratch can appear near impossible to navigate. Failure to research and plan is one of the biggest causes of failure for many start-ups.
However, having experienced advisors on your side in these early stages vastly improves your odds of success. They can help manage a lot of the more overlooked aspects of starting-up and avoid nasty surprises when you can least afford them.
Here are some steps you should take to ensure your business launch is one which lasts:
Make a business plan
It might seem obvious but you should never start a business without first making a business plan. As well as your overall proposal and objectives, ensure you include your research conducted on the competition, your projected profit and loss, cashflow analysis, and a thorough marketing plan.
Choose your advisors
When choosing your advisors, you may ask for recommendations by family or friends, but do your due diligence as well and choose people that fit your requirements and have the requisite experience in your industry or the field of expertise you require.
Select a business structure
Establishing whether your business runs as a sole trader, partnership, company, or trust is one of the earliest and most important decisions to make. Make sure you consult with your lawyer on this decision and choose a structure that will fulfil both the current and future needs of your business.
Sign a shareholders’ agreement
Often overlooked, this is a crucial step to minimise disputes that may arise in the running of your enterprise. Even companies with only two shareholders should still have a shareholders’ agreement prepared. It forces the partners to discuss and agree on how they will address matters such as illness or intent to resign, buy-outs, and transition matters.
Register your intellectual property
Protecting assets such as your business name, logo, and any novel business idea from misuse by external companies is imperative. You should also check if anyone already owns or is operating under your proposed business name or logo.
Ensure your licences and policies are in place
Obtaining the necessary licences and permits, as well as implementing privacy and workplace health and safety policies, will prevent costly litigation down the line.
Choose how to finance your business
Traditional bank loans, venture capital, outside investments, and sales of shares can be confusing without appropriate legal advice. If you are considering crowdfunding, note that crowdfunding equity is now regulated, and certain procedures need to be followed.
Sign employee agreements
Even if your employees are under a Modern Award, it is important to have employment agreements in place to detail all remaining conditions, including matters of confidentiality and policy. Be careful falling in engaging an employee as an independent contractor to avoid employee obligations; the law will class an independent contractor as an employee in many circumstances.
Prepare good terms and conditions
Legal drafting ensures terms and conditions which are legally effective. Although it can be expensive, it is one of the greatest investments you can make for your business.
Take out insurance cover
Insurances such as workers compensation insurance, public liability and contents insurance for your premises are vital and often required by law or by your lease, but you should also consider other insurance policies that may be useful to your business, such as cyber insurance for data breaches. A lawyer can review a policy to confirm if it addresses any specific items of cover that are of concern to you.
Nadia Sabaini, Business Advisory Expert, Bennett and Philp Lawyers
