Hey busy business owner, do you ever wonder if you’re missing something obvious?
Don’t stress, you’re not the only one!
Sometimes you don’t know what you don’t know.
To help you out, we’ve put together a quick list of 6 things every business owner should be aware of:
- Business Structuring
- Intellectual Property
Keep reading for a super short lesson on each below…
Most people start their business as a sole trader but as your business grows, so do its needs. You should consider whether a different structure such as a company or trust is more appropriate now that you’ve gained some traction.
Structuring your business correctly can save you money by reducing tax, minimising risk and protecting your personal assets.
It’s quite common for a sole trader or partnership to become a company once the business has been up and running for a while, or if the business is particularly risky.
One of the main benefits of a company structure is that it protects your personal assets from creditors. This happens because a company is a separate legal entity. On the other hand, if a disgruntled client or customer tries to sue your sole trader business, they’re actually suing you – the person.
This means that your personal assets like your house and car could be on the line. If the same situation occurs and your business is run through a company, they’ll have to sue the company and it’s unlikely they’ll be able to get access to your personal assets.
You probably have a lot of valuable intellectual property in your business, and you dont even realise it!
This includes intangible assets such as trademarks, designs, patents, ways of doing business, and business secrets.
You want to protect your intellectual property and there’s a few ways to do that:
- Non-Disclosure Agreement (NDA) – This should be used where you’re disclosing confidential information or intellectual property to another person who isn’t already covered by a contract with your business.
- Trade Mark registration – once you start using a mark, such as your logo, business name or tagline, you have a ‘common law’ trade mark. In order to ensure the greatest protection over this property, you should register a trade mark. A registered trade mark proves that you’re the owner of the mark, gives you exclusive right to use the mark for ten years and makes it much easier to stop others from using it. We recommend undertaking our Tactical Trade Marks project to find out more before rushing to registration. This will save you time, money, and effort.
- Other rights – Depending on what goods or services you offer, you may need to consider protecting your property through another means such as a patent, design or something else.
If you’re a business that hires people, you should be clear on your responsibilities as an employer and on the minimum entitlements of your employees. If you also contract workers, you should be confident that they are indeed a contractor and not an employee. Getting this wrong can have serious consequences under Australia’s strict sham contracting laws.
As an employer, you owe certain duties to your employees and other persons who enter your business. This includes duties under work health and safety law to provide a safe place of work and to take steps to minimise risks.
Employees will have different entitlements depending on their occupation, position and tenure. However, all employees are covered by the National Employment Standards (NES), which sets out minimum standards for leave, hours, holidays and notice periods.
It’s best to speak to an insurance broker about your particular circumstances and what is suitable for your business. However, there are certain insurances that you may need, such as worker’s compensation insurance, professional indemnity insurance, and product liability insurance. This should be part of any business’ strong risk minimisation strategy.
It’s imperative that your business has the right contracts in place.
If you’re a service based business, it’s crucial that you have a Client Engagement Agreement (sometimes called a Service Agreement or Terms of Business). This contract outlines the scope of your work with the client, changes to scope, payment, cancellation, consequences of termination, refunds, intellectual property and more.
If you’re a goods based business and you sell online, you’ll likely need Ecommerce Terms and Conditions that govern similar important terms such as payment, delivery, risk, refunds, and more.
You’ll also want to think about contracts that manage your relationship with other stakeholders such as suppliers, collaborators, employees, distributors and contractors.
The Australian Consumer Law (ACL) outlines certain standards that have to be met where you’re providing a good or service to consumers. This includes important consumer guarantees, regulations pertaining to product labelling, and advertising. It’s really important you understand your obligations under the ACL, especially as this governs things you deal with every day like advertising and refunds.