Talking Cents

Small business accountant in Sydney - why did you start your business?

For people starting a small business the reasons can be as varied as the people that start the businesses. Knowing why can be a critical part of your success and allow you to focus on determining what you want out of your business and how to go about it. The famous quote “begin with the end in mind” is really a valuable thought process.

For some, starting a business simply means the freedom of not having a boss telling you what to do, doing it your own way and generating an income stream to replace your wages from your old job. This path doesn’t really have an end in mind. Will you get to retirement age, close the business and live of the pension? For all the hard work in running a business I’m not convinced that the people that take this option have really looked at the end point before beginning.

For others, it may involve an inspirational product or service that they feel they can create, market and sell better than their competitors. Taking this approach can be a long-term game as developing new products requires long lead times and capital investments. The pay off, if done well, is a sustainable business that can be sold at a profit thus generating a lump sum payment at a later point in the business cycle and the owners working life.

The third reason is to open a business that can, both financially and socially, sustain a certain lifestyle for the business owners. Such an example might be opening a surf shop by the beach, as it allows you to hang around fellow surfers, make a few dollars and enjoy the beachside lifestyle.

Setting up a business from the beginning involves careful choices about legal structures, asset protection and tax minimisation. All of these factors need to be considered in light of the above three reason’s and combined to ensure the true reasons behind opening a business can be satisfied by the business. Not caring about having a business you can sell in twenty years’ time can lead to very different choices than just wanting to maximise your shorter income stream from the business to sustain your lifestyle choices.

For more on building a sustainable small business contact mas accountants located in Sydney and Melbourne.