Starting a business
You have gone through the process of deciding you are the right kind of person to own a small business and that there is potentially a business opportunity in your idea. It is time to turn your dream into a reality.
Starting a food-related business is the same as starting any other business plus more, as there are many issues surrounding food safety and quality to address.
- What is your main business/product?
- Who are your main consumers?
- What is your main capability?
- How healthy is your current financial situation?
- Have you done a business plan?
- Have you spoken to your accountant/financial advisor?
Start or buy?
An existing business may already have the appropriate infrastructure and market presence to allow you to ‘hit the ground running’ from day one. If you have a new product to develop, the existing business will give you the all important cash flow to run the business whilst developing and getting the new product out to the market. However, you will have to pay for the business.
You will need to consider:
- Existing sales
- Existing costs
- Assets and liabilities
- The seller and you
- The availability of trustworthy financial records
- The purchase agreement
The seller will generally ask for payment for goodwill and so great care must be taken in valuing the goodwill as it is intangible.
You will need to think carefully about the seller’s motives for selling. Are there hidden problems with the business? Are they intending to set up another competing business nearby?
It is important at this stage to appoint an accountant and solicitor and run all the above information past them for their advice. An accountant will help you put a value on the business, based on the assets you are acquiring and the income generated by the business.
If you are considering starting a business from scratch you should find out if consumers will buy your products or services and who the competitors are in the market.
For more information about starting from scratch, visit SouthAustralia.biz – Doing Business in SA.
Need advice?
Business structure
There are a number of options, the most common being:
- Sole trader
- Partnership
- Company
- Trust
While a sole trader is the lowest cost option at start up, ‘companies’ are widely used for good reasons, including liability limitation, legal status and taxation purposes. Discuss with your accountant which structure is most suitable for you.
Business name
Unless you are running the business under your own name (without any additions) by law you must register your business name. In South Australia, the Office of Consumer and Business Affairs manages this process.
Visit Compliance for more.
Australian Business Number and general tax requirements
The Australian Taxation Office can help obtain an Australian Business Number, and with general taxation information.
Licences and permits
It is law to notify your local council.
Details of other licences and permits can be obtained from your local Regional Development Board, Business Enterprise Centre, or the Business License Information Service.
A food business, including mobile food operations, must comply with the provisions of the Food Act 2001, Food Regulations 2002 and the Australian New Zealand Food Standards Code (FSANZ) (including the Food Safety Standards).
Visit Food Safety for more.
How can the SA Food Centre help?
Contact the SA Food Centre for assistance or further contacts to help your business planning.
- Page last modified: November 15, 2011, 5:51 pm
- Welcome URL is http://www.safoodcentre.com.au/
- This page: http://www.safoodcentre.com.au/business_fundamentals/staring_a_business
