Setting up your business is an exciting time however there are a few things you must have in place to ensure that you have a solid foundation for your businesses success. Although the thrill of diving in head first to sign up your first client can be overwhelming, to ensure you can provide the best service possible, it is important to put the following in place.

Finance Infrastructure

1. Accountant

2. Corporate Structure

When setting up a business you can chose different business structures. You are not locked into any structure. You can change the structure as your business changes or grows. Some of the factors to consider when choosing the structure most suitable for you are:

  • legitimate tax minimisation
  • establishment fees and maintenance costs
  • asset protection
  • type of business.

If you are setting up your business as a coach, we recommend that you register your business as a Sole Trader.

3. Entity Details

Entity details are those which are used to register your business, and may also include the details you give to your customers. They include; business name, business address, primary contact person, contact phone number, email address, bank details and so on.

4. Insurance

Starting a small business is a risk. Insurance is one means of minimising the risk. Insurance facilitates reimbursement during crisis situations, insurance means promise of compensation for any potential future losses. There are different insurance companies that offer wide range of insurance options and an insurance purchaser can select as per own convenience and preference.

Several insurances provide comprehensive coverage with affordable premiums. Premiums are periodical payment and different insurers offer diverse premium options.

The periodical insurance premiums are calculated according to the total insurance amount. Insurance can be an effective tool of risk management. Quantified risks of different volumes can be insured.

There are many and varied types of Risk and General Insurance which are suitable, and indeed often essential, for the protection of small businesses and their owners. The most commonly used fall into two areas:

Risk Insurance — primarily personal insurance cover on a person for business requirements.

General Insurance — involves loss or damage of assets, or the protection of the business owner in the case of negligence. The following categorises these insurances and highlights their purpose.

Income Protection Insurance: This insures you against the loss of personal income whilst you are unable to work due to illness or injury.

Business Expenses: If you are self-employed and unable to work due to illness or injury, this insurance will cover the eligible business expenses which fall due each month e.g. leases & wages.

Personal Liability Insurance: This covers you for your legal liability for injury or damage you cause to others and their property if you are negligent, anywhere in Australia.

Public Liability Insurance: This is an essential cover for you as a business owner. It indemnifies you against legal liability for any unexpected and unintended damage to property or bodily injury to third parties caused by you or your employees.

Professional Indemnity Insurance (PI): This is a special form of cover designed to protect professionals for actions taken against them either by their client or a third party.

Business Insurance: This is a combination policy designed for common business risks such as:

  • Property insurance
  • Business Interruption
  • Glass cover
  • Money insurance
  • Liability Motor Vehicle Insurance

A Comprehensive Policy covers damage to the vehicle from accident, fire, theft and includes third party property damage.

As a matter of course, all coaches should consider both public liability insurance and professional liability insurance.

The coach shapes the future of the individual and there are chances that he/she may be privy to a lot of personal information of the client. The client usually follows what you as a coach tells him/her to do. When the client is successful it is fine, however when the client does not find success, that is when the trouble begins. Some of the candidates might even feel cheated by the course and take legal recourse; coach indemnity insurance is the only way to safeguard against such litigation.

Many of the candidates that you have coached would have benefited, those few who did not may take a legal recourse for compensating the loss for the wrong advice that you may given or the training which did not bear any fruits. Though their claims might be baseless and have vested interest, however you would have to defend yourself. Defending can take off a lot of finances from your savings. At such trying moments you should not be found looking at making the financial arrangements. At such times of crisis, it is important to focus on the case at hand.

Coach indemnity insurance allows you to focus on the legal proceedings rather than worry about the finances. This insurance is the financial safeguard from unwanted loss due to litigation. When you do not have to worry abut the finances you can go full blast in defending yourself in court.

Professional Indemnity insurance indemnifies you from the losses due to litigation against you for reasons like, breach of duty, any claim of defamation, inaccurate advice, loss of data or documents in your possession. The insurance helps you navigate the financial difficulty by helping you with monetary assistance during the out of court settlement of a claim, expenses for legal proceedings and in case the final verdict is against you, payment of the claim. The extent cover offered to you will be a function of the amount of the contract and the client you are catering to. The risk involved in the work that you do is also an important factor in determining the premium payable.

Registrations

5. ABN Registration

The Australian Business Number (ABN) is a single identifier for all business dealings with the tax office and for dealings with other government departments and agencies.

The ABN is a unique 11 digit identifying number that businesses use when dealing with other businesses. For example, you generally need to put your ABN on your invoices, or other documents relating to sales that you make. If you don’t, other businesses may withhold 46.5% from any payment to you.

Registering for an ABN is not compulsory, but you will need one to register for the GST. Your ABN allows you to:

  • facilitate a single Business Activity Statement
  • confirm your business identity to others when ordering and invoicing
  • avoid PAYG tax on payments you receive
  • claim GST credits
  • claim energy grants credits
  • obtain an Australian domain name.

You can register your business here.

6. GST Registration

The Goods and Services Tax (GST) is a broad-based tax of 10 per cent on the sale of most goods and services and other things in Australia.

You must register for GST if:

  • your business has a GST turnover of $75 000 or more ($150 000 or more for non profit organisations)
  • you provide taxi travel as part of your business, regardless of your GST turnover.

By registering for GST, you will be entitled to claim input tax credits for the GST included in the price paid for things that you acquire for use in your business. If you are not registered, you will not be able to claim input tax credits. To register for GST you will need to complete an application. You use the same application to register for an Australian Business Number (ABN). You will need an ABN to be part of the GST system. Your ABN will also be your GST registration number.

If you are registered for GST, you need to include GST in the price you charge your customers for goods and services they purchase from you (called sales). However, you will be able to claim a credit for the GST you have paid on your business expenses and other inputs (called a GST credit). You have to pay the difference between GST charged on sales and GST credits to the Tax Office periodically.

7. Tax File Number

If your business is set up as a Sole Trader, you are not required to apply for a business Tax File Number (TFN), you can use your individual TFN. For more information about Tax File Numbers click here.

8. Bank Account

Registering your business bank account allows you to receive funds for your services. You require these details for invoicing and if you wish to use a Direct Debit service. Click here for more information on setting up a business bank account.

Contact Details

9. Business Address

This is the primary address where your business activities take place. If you do not have an office, this is your home address.

10. 1300 Number

Depending on your business set up you may consider registering a 1300 number for your business. 1300 numbers can be used nationally for customers to contact you, and can be redirected to any phone number elected by you. 1300 numbers can not be used outside of Australia and are useful if you have a receptionist, or virtual receptionist, which you would like all of your calls to be directed to.

11. Mobile Phone Number

This can be either your personal phone number or a business phone number. This will be the number your clients and potential clients contact you on, if you do not wish to give out your personal number, you may consider registering a 1300 number and get this redirected to your mobile phone.

12. Email Address

The best email address is created using your domain name. For example info@mycoachingdomain.com.au

This email address can be promoted on all of your online platforms, and your business card. If you do not have an email address, or do not want to use a custom domain, we recommend setting up a gmail account as this gives you access to the entire Gsuite of apps and provides a centralised account for all of your business functions. In addition to this, gmail can be accessed via the web and allows you (or your team) to access your email account from anywhere in the world, without having to set up IMAP and POP settings.

Business Details

13. Business Name

A business name is simply a name or title under which a person, or other legal entity, trades. You don’t need to register a business name if you plan to conduct your business under your or your partner’s, first name and surname, or initials and surname. If you alter your name or use a different name, then it must be registered.

If the business structure you have chosen is as a sole proprietor, a partnership or a trust, and not as a company, then you are required to register your business name in the state or territory in which you will operate. Businesses are registered for three years through the Office of Fair Trading. There is a registration fee and a renewal fee for business names.

If you plan to set up your business in more than one State, you need to register your business in each State/Territory.

Registration of a business name does not in itself give you any proprietary rights – only a trade mark can give you that kind of protection.

14. Business Name Registration

If you are operating as a Sole Trader using your own name, you will not need to register a separate business name. For more information on when to register your business name click here.

15. Logo/Brand

Your logo and brand is how your customers will recognise and identify your business. Choosing a logo and brand can be a personal decision, however it is important to create your brand based on what market you are targeting and what will resonate with your customers. That isn’t to say that you cannot add a personal touch however, if your market is male CEO’s and your branding is hot pink with an image of a kitten, this may not provide credibility and allow you to connect with male CEO’s, particularly if they see your brand online without meeting them.

If you require support in creating the right brand to fit your niche market, book a strategy session with us. In this session we will work with you to create a brand you love and give you advice based on over 17 years of experience in branding.

16. Website Domain

A domain name is a textual address for a location on the Internet that corresponds to the actual alpha numeric address which the Internet computers can read.

Be aware that domain names allocation rules have changed so that you may now be eligible to obtain a domain name that matches your registered trade mark or registered trade mark application, even if it is not your registered business name (if this name has not already been allocated). For more information on the new domain names eligibility and allocation rules, see the .au Domain Administration (auDA) Ltd website.

You can register your domain name as a trade mark as long as it meets the requirements of the Trade Marks Act 1995.

Finance Systems

17. PaySmart (Direct Debit)

Direct debit is a method of billing available to you to process payments from your clients. When you have a direct debit authority from your customer you are given permission to directly debit your customer’s nominated account in payment for goods or services. This account may be either a bank account or a credit card.

If you are using a direct debit provider, your business will enter into an agreement with them. Once the necessary arrangements are in place you will be provided with a direct debit request or authority form. This authority is an agreement between your business and your customer which will allow you to debit their nominated account.

In the case of a direct debit linked to a bank account you will give the merchant a Direct Debit Request. The Direct Debit Request will be sent to your direct debit provider in most cases to enter into their system, at which time the direct debit will then begin being processed. The form is not sent to the bank unless there is a dispute. The direct debit provider is able to participate in the direct debit system because a financial institution has sponsored them into the system. It is on the basis of this sponsorship that your bank will allow the direct provider to make debits from your customer’s account and deposit the funds into your account.

A direct debit can:

  • be for a fixed or a variable amount; and
  • operate at regular intervals or pre-determined dates.

Customers love being able to make smaller payments. Make it easier for them and use a billing solution that will facilitate the sale. The costs and convenience of a direct debit system are far more favourable than other payment methods (e.g. cheques and money orders).

A good direct debit provider can have a new direct debit form ready for you to start billing that customer with 24 hours. Your customer will have peace of mind that their bills will be paid on-time, every time.

Is your direct debit provider going to charge you a fixed or percentage based transaction fee? Generally, direct debit providers charge a fixed fee for bank accounts and a fixed and percentage fee (to cover their merchant costs) for credit cards. Generally all fees can be passed directly onto your customer, but talk to your direct debit provider.

It is essential your business has the flexibility to debit your clients either on a fixed schedule or variable amounts as required. Don’t limit yourself or your business! Also make sure you can collect fund “on demand” – being able to only collect funds on a certain day not only limits you but may also be inconvenient to your customer.

A good direct debit system should be available outside of the standard work day. Make sure your direct debit company is available when you need them and just during typical “office hours”.

The majority of direct debit providers provide a similar product and they are all very good. But what are the little extras they offer to make them stand out. Do they have strategies in place to reduce the number of failed payments due to insufficient funds? Or can they implement a system that is a variation of the typical direct debit? Is there any customizability?

18. PayPal

PayPal is an online payment platform which allows you to collect money online. You may decide you don’t require PayPal at this stage in your business, however if you are planning to sell products online or run events which requires you to sell tickets, we recommend that you sign up for PayPal. For more information about PayPal click here.

19. Xero

Creating a system for collecting revenue, paying employees, suppliers, and taxes correctly and on time is part of operating a small business. You may choose to operate a manual or electronic financial record keeping system, but regardless of its format, it should be simple, easy to understand, reliable, accurate, and provide information when you need it and in an accessible format.

Electronic record keeping systems are an efficient way for keeping your financial records, and generally provide complete accounting functionality. Electronic accounting programs provide the option of using accrual accounting principles where you record revenue and expenses when they are incurred. For example, you record a sale when you raise the invoice, not when you actually receive the cash from the client.

Using computer accounting programs, you can easily generate orders, invoices, aged debtor reports, financial statements, employee pay records, and inventory reports. Many programs have a direct email facility for sending invoices to clients, orders to suppliers, or BAS returns to the Australian Taxation Office (ATO). Some allow you to monitor actual business performance with financial forecasts.

There are various commercial computer accounting programs available from commercial software retailers. Before purchasing a system, it is advised you discuss the decision with your bookkeeper and accountant to ensure your selection is compatible with the systems they use.

Choose an accounting program that will work for your business. Do some training to gain confidence about using and getting the most out of your system. Also be prepared for the cost of keeping the software up to date.

You can find computer accounting programs by conducting an Internet search. The more common software packages include:

  • Xero
  • MYOB
  • Quickbooks

The accounting software we recommend is Xero. You can find out more about their packages, and sign up here.

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