About Angus Jones

Angus started his first small business in 1989 and has since gone on to have a successful career in marketing. He realised although there were many websites for small business none was addressing the question of how to. Angus has a passion to articulate benefits that add value to customers/readers.

NDA – Non Disclosure Agreements

Posted on July 14, 2020 by Angus Jones

Shh can you keep a secret? Most people cannot. What if the success of your business depends on a 3^rd party and you need them to keep quiet about what is discussed? This is when you need to have either a lot of trust or you have them sign a non-disclosure agreement. This guide will discuss what a NDA is and how to create one.

A Non Disclosure Agreement or NDA is a contract through which the parties agree to not disclose information covered by the agreement. An NDA creates a confidential relationship between the parties, typically to protect any type of confidential and proprietary information or trade secrets. As such, an NDA protects non-public business information. Also known as a Confidentiality Contract, Confidentiality Agreement, or Gag Order.

WHY do I need a Non-Disclosure Agreement NDA?

Some of the typical needs for an NDA include:

Entering into a business relationship – If you have created a product or service and are looking to sell it to another business, you may need an NDA while you are negotiating the deal.
Getting feedback – After developing a product or service, you may wish to run beta testing (trial) and gather feedback from your network or those in your industry.
Bring on a new employee – It’s a good idea to have employees sign a document that they will not share company confidential information such as plans, business models, financial or products.
Pitching to investors – If your business is looking for investment, you will likely reveal confidential business information when pitching your company. Always insist as they could steal your idea.
Asking a competitor to help you on a project and stop them from stealing your designs and ideas and pitching independently.

WHAT would I use an NDA for?

An NDA will cover:

A description of the confidential information;
Confidential rights and obligations of the parties;
Protection of sensitive information;
Return of confidential information at the end of the agreement;
Obligations regarding the proper use of the information; and
Circumstances where disclosure is permitted.

An NDA normally protects ideas, products, app functionality, designs, source code, plans, business models, records, recipes, and any other commercially sensitive documentation.

HOW do I get an NDA created?

An NDA is a legal document but is only as good as the contents. You can get an NDA as

A free template
A purchased template
Written by a lawyer as fit for purpose

Prices increase as you go down the list as does its ability to possibly be successful if you go to court.

HINTS

Once you have an NDA template chance are you will be able to use it again for similar circumstances.

You should consider:

How long you want it to last
Is it mutual or one way (both parties or only one)
Having a specific definition (broad will result in ambiguity)
Will a court consider it reasonable
Implications if someone will not sign
What other steps you need to take to protect your secrets, for example, lock them in a safe
Locations it applies to, including overseas
All details are correct

SUMMARY – Protect Confidential Information

An NDA will help you protect the information you want to share with 3^rd parties. Templates to create one can be easily obtained but the use of a lawyer will increase your protection.

PLEASE NOTE: All information provided on this website is general in nature and may not be appropriate to your individual circumstances. It does not replace advice available from experts such as lawyers, accountants, business advisors, brokers, etc. We further recommend when using these experts you ensure they have the appropriate licenses and endorsements.

Shareholder & Partnership agreement

Posted on July 14, 2020 by Angus Jones

You are probably reading this guide because you are at the beginning of your business venture however it could be because a partnership or shareholding has gone wrong. This guide is all about helping you get that first shareholder & partnership agreement right so down the track there is a clear predetermined plan of how things should happen.

A Shareholder & Partnership Agreement is a legally binding contract between the shareholders or partners of a business. A Shareholder & Partnership Agreement covers the funding, structure, management and direction of the business. It outlines the responsibilities and obligations of the business owners.

WHY should all partners be in agreement?

In the excitement of starting a new venture, it is very easy to put this important task aside. A shareholder agreement is to protect the multiple owners’ investment in the business, to establish a fair relationship between the owners and govern how the company is run.

It is best to put a shareholder and partnership agreement in place when the business is first established. At this early stage owners should be like-minded and if this is not the case questions should be asked why you are going into business together.

WHAT is in a shareholder & partnership agreement?

The agreement should contain important, specific, and practical rules relating to the business and the relationship between the owners.

The agreement should (but not have to) include:

define who are the shareholders, in what percentage ownership over what term
define how important decisions are to be made
describe how the business is going to be run
indicate if any intellectual property is not owned by the business
set out the owners’ rights and obligations including time spent on business
agreement on accounting processes and reporting
decide how profits will be divided and income paid
regulate the sale of shares in the business including full sale and withdrawal or addition of an owner
define dispute resolution procedures – if 2 owners have equal decision making decide how will you break the stalemate
outline any additional powers of minority shareholder/s so not always overruled on key decisions
define what constitutes a breach of the agreement and what action should then take place – possibilities include termination or mediation
include restrictions to stop shareholders from starting a new business in competition
identify how an owner may exit the business
have terms around specific circumstances like:
- Hiring and firing of employees
- Who can authorise payments
- Taking on debt
- Approving expenses

If a disagreement does occur in the life of the business and there is a clear shareholder agreement it gives a clear roadmap to move forward.

A partnership or shareholders agreement can be drawn up by a lawyer and you will find several providers offer a template-based solution that can be adapted to your specific needs via the internet for minimal cost.

HOW do you deal with conflict?

Conflict will inevitably arise with shareholders at some point in the running of a business. It does not matter how well you know your fellow owners, irrespective if they are a family, friend, or business partner it is best to have a shareholders agreement in place that you can refer to when conflict arises in your business relationship.

A lot of successful small businesses have been known to have shareholders with stormy relationships. A business relationship, whether good or bad, can have a huge impact on whether a company is going to be successful or not.

Decisions should be made through discussion, compromise and ultimately deciding what is best for the business. More progress can be made on working out how to resolve conflict rather than how to win a conflict.

Being a minority shareholder and having a shareholders’ agreement that includes the requirement for all shareholders to be unanimous ensures that you have a say in the important decisions that impact the company. This could be decisions on:

Adding or removing owners
appointment or removal of staff
taking on new debt
changing business operations

However, if all decisions must be unanimous this could cause problems and ultimately prevent your company from carrying out its business.

In a scenario when two owners each own 50% each of the business it is important to have a dispute resolution provision included. Without an agreed procedure to resolve disputes no decisions can be made leaving the company unable to operate.

You can terminate a shareholder agreement in one of 3 ways:

By mutual agreement – the original shareholder agreement should have had a provision on this
Termination by a breach – unless there are clauses for mediation of a breach in the agreement can lead to termination
One owner withdraws – the shareholder agreement should have a provision that maps out this scenario

To force an unhappy shareholder to stay in a business may cause more problems than having a new shareholder who is interested in the business being successful. Shareholders’ agreements will often include rules around share sales and transfers – who shares can be transferred to, on what terms and at what price.

HINTS

Decisions can be specified to be based on equity holdings or unanimous by all owners.

Discussing the worst possible scenarios at the beginning of your business journey and having a roadmap to resolve them will save a lot of headache down the track. The more comprehensive the better.

Owners need to enter into an agreement voluntarily.

Any new shareholder must be bound by the terms of the original shareholder/partner agreement.

SUMMARY – shareholder & partnership agreement for profit

A shareholder or partner agreement is a legal document that creates a set of rules for the owners to follow when a business is first established. It helps deal with certain scenarios that may occur in the future to reduce the chance of conflict. Those rules deal with equity, decisions, obligations and the ultimate end of the agreement. A well legally written agreement can be produced inexpensively from templates or through a lawyer.

Contracts – written legally binding document

Posted on July 14, 2020 by Angus Jones

In our everyday lives, we are always making contracts, whether it be for a new mobile phone plan, to have electricity connected, or arranging for a plumber to fix a broken pipe. In this guide, we will look at what a small business needs to know about contracts and how to write or agree to one that is legally binding.

A contract is an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration. Contracts are at the heart of most business dealings. The agreement may be enforced in court.

WHY should I have a written contract?

A conversation and a handshake is indeed a contract. If a tradesperson writes a price on the back of a business card and you agree to go ahead with the work then that is a contract. This is all fine until something goes wrong and a dispute arises. A handshake cannot be enforced by a court.

A written contract, on the other hand, provides certainty to both parties and should set out what has been agreed. Typical items set out in a contract would include payment, timeframes and materials.

WHAT do I need to know about contracts?

A court will not enforce a non-written contract as they will be unable to prove the existence of a contract or its terms.

Depending on the type of contract being created or agreed to it may be a good idea to have a professional such as a lawyer or business advisor review or write it.

A written contract should always be used when:

The contract price is significant enough to affect your business if you don’t get paid.
Quality requirements, specifications or specific materials that have to be used.
Doubt that the hirer may not be able to pay you.
Insurance required for the type of work you are doing.
Key terms are used, such as a critical date for the completion of the work before payment.
Information must be kept confidential. See our guide on NDA’s
Legal obligation requires to have a written contract.

Beyond written and verbal contracts other contact types include:

Standard Form Contracts – is a pre-prepared contract that has most sections already filled out and there is minimal or no negotiation between the parties. Includes employment contract or insurance agreement.

Period Contracts– is used for business engagements where work is performed from time to time. Popular in building industry for contractors.

HOW do I create a legally binding contract?

For a written contract to be legally binding it must contain four essential elements:

an offer
an acceptance
an intention to create a legal relationship
a consideration (usually money).

However, it may still be considered invalid if it:

entices someone to commit a crime, or is illegal
is entered into by someone that lacks capacity, such as a minor or bankrupt
was agreed through misleading or deceptive conduct, duress, unconscionable conduct or undue influence.

A written contract will include conditions that if not met are grounds to terminate the contract and seek compensation or damages.

When negotiating the contract terms make sure the conditions of the contract are clearly defined and agreed to by all parties.

Contracts may follow a structure that can include, but are not limited to, the following conditions:

details of the parties, including ABN’s, ACN’s and any sub-contracting arrangements
description of the goods and/or services that your business will receive or provide, including key deliverables
payment details and dates, including whether interest will be applied to late payments
duration or period
definitions of key terms
ownership of intellectual property rights.
treatment of confidential information
key dates and milestones
required insurance and indemnity provisions
exclusivity agreements and restraint of trade
damages or penalty provisions
renegotiation or renewal options
complaints and dispute resolution process
termination conditions
special conditions

HINTS

Even if a contract is a low value, if it is in writing it removes risk.

You should read every word, cross out blank spaces, negotiate if appropriate and keep a copy of the contract. When negotiating be clear and remain professional.

If you are having some design work done like a logo created, the copyright remains with the designer unless the contract specifies the copyright passes to you.

Small businesses are protected from unfair terms in a standard form contract where it is for the supply of goods or services, the sale or grant of an interest in land, at least one of the businesses employs fewer than 20 people, and the price of the contract is no more than $300,000 or $1 million if the contract is for more than 12 months. https://www.accc.gov.au/business/business-rights-protections/unfair-contract-terms

More details on how to prepare a contract can be found here https://www.business.gov.au/products-and-services/contracts-and-tenders/how-to-prepare-a-contract

SUMMARY – contracts must be accepted

A written contract is a legally binding document that can be used in a court of law. It must contain an offer, an acceptance, an intention to create a legal relationship, and a consideration (usually money). The contract will include various conditions that should clearly define the agreement between the parties so there is no confusion on what will occur. If these agreed conditions are not met it is ground for termination and possibly damages.

Register a Company

Posted on July 14, 2020 by Angus Jones

In our guide Choosing a business structure, we listed the various choices including starting a company. In this guide, we will look at the process to register a company which is more complicated than the other business structures.

A company is a legal entity with higher set-up and administration costs. Companies also have additional reporting requirements.
A company is run by its directors and owned by its shareholders.
While a company provides some asset protection, its directors can be legally liable for their actions and, in some cases, the debts of the company.
Companies are regulated by the Australian Securities & Investments Commission (ASIC).
Australian Tax Office

WHY set your business structure as a Company?

There is less personal liability to its owners.

A company is its own legal entity and as such can borrow money, take legal action, and be legally sued by someone else. As a shareholder of a company whether it be 10% or 100% you are only liable for any unpaid money on your shares. So in theory they cannot come after your house, however as a director of that company if it is found you are in breach of your legal obligations to that company you could be sued. A company is owned by its shareholders but controlled by its directors.

WHAT you need to understand to register a company

A business name is not the same as registering a company name, they indeed can be identical bar the abbreviation but don’t need to be the same. See our separate guide on Registering a Business name. However in the case of a company you must register its name as well. For example you may have a company name “Your Town Fruit Pty Ltd” trading with your registered business name called “Your Town Fruit Shop”. We recommend you go through the process to determine your company name listed on the ASIC website. https://asic.gov.au/for-business/registering-a-company/steps-to-register-a-company/company-name-availability/. A company’s name must show its legal status and include an abbreviation at the end, for example, “Your Town Fruit Pty Ltd”. The abbreviation relates to the liability of its members.

Full Word	Abbreviation
No Liability	NL
Proprietary	Pty
Limited	Ltd

HOW to Register a Company?

At this point it is our strong recommendation that you get assistance from a professional. You can easily find them by Googling “registering a company”. For a minimal fee they will do all the hard work for you based on you answering some questions and providing information. These are usually accountants or solicitors and are known as Private Service Providers. More details can be found https://asic.gov.au/for-business/registering-a-business-name/before-you-register-a-business-name/private-service-providers/

One thing you cannot escape as a company director (assuming you make yourself a director) is your obligations to keep details up to date, maintaining records and details on a register and paying the annual fees. Australian companies also require 1 or more directors to reside in Australia depending on the structure.

HINT

The fees to register a company can be found here. https://asic.gov.au/for-business/payments-fees-and-invoices/asic-fees/fees-for-commonly-lodged-documents/starting-a-company/

If you do not go down the Private Service Provider route be prepared to understand and decide on a constitution or replaceable rules, share structures, etc.

SUMMARY – Company means less personal liability

A company structure will reduce your risk of personal liability but is more complicated to establish and maintain. Using a private service provider is an economical and pain-free way to do the setup.

Ending employment

Posted on July 14, 2020 by Angus Jones

OK, you have to fire someone, let them go, end their employment. Maybe one of your key staff has resigned. This can be an emotional exercise on both parts. In this guide we will cover ending employment, what is important for you to understand around entitlements and how to protect yourself from unfair dismissal claims.

Ending employment is an employee’s departure from a job and the end of an employee’s time with an employer. Termination may be voluntary on the employee’s part, or it may be at the hands of the employer.
Unfair dismissal is when an employee is dismissed from their job in a harsh, unjust or unreasonable manner.

WHY will someone leave your employment?

The most common reasons employment ends are:

resignation
redundancy
termination or dismissal

Resignation is when someone decides to leave on their own accord. It is their decision and you cannot reject a resignation. The most common reasons for people to leave are insufficient pay or unfair pay practices, lack of honesty/integrity/ethics, poor manager, lack of work-life balance, and unhealthy/undesirable culture.

Redundancy occurs when an employer either becomes insolvent or bankrupt or the job function is no longer needed. This is a tough decision especially if you are letting go of a hard-working and loyal employee.

Dismissal is when you let someone go for poor performance, conduct or changes to operational requirements.

WHAT is important to understand about resignation, redundancy & dismissal?

There are different rights, obligations and legislation that come as a result of ending employment.

Your obligations as an employer will depend on whether you are under the state or national industrial relations system.

Notice periods

You must provide a notice period to an employee when ending employment except for some cases of dismissal. The length of notice will vary based on their length of service, type of employment, award, agreement or employment contract, and age. You can have the choice to let the employee work their notice period or you can pay them out (known as pay in lieu of notice). If you pay them out, they must be paid the same amount as if they had worked to the end of the notice period.

During this notice period, the employee may take annual leave only if you approve it and sick leave with sufficient evidence.

Notice periods do not apply to employees who are: casuals, employed for a specific period or task, do seasonal work, fired because of serious misconduct (such as engaging in theft, fraud or assault), and daily hire working in the building and construction or the meat industry.

Employee entitlements

You must pay an employee all their entitlements when employment ends. These may include:

outstanding wages
accumulated annual leave
accrued or pro-rata long service leave
redundancy pay

Genuine Redundancy

Some businesses have wrongly used redundancy to unfairly dismiss an employee. According to Fair Work Australia:

A genuine redundancy is when:

the person’s job doesn’t need to be done by anyone
the employer followed any consultation requirements in the award, enterprise agreement or other registered agreement.

When an employee’s dismissal is a genuine redundancy the employee isn’t able to make an unfair dismissal claim.

A dismissal is not a genuine redundancy if the employer:

still needs the employee’s job to be done by someone (eg. hires someone else to do the job)
has not followed relevant requirements to consult with the employees about the redundancy under an award or registered agreement or
could have reasonably, in the circumstances, given the employee another job within the employer’s business or an associated entity.

Redundancy Pay

If someone is made redundant, they will be entitled to redundancy pay and special taxation rates will apply to those payments. https://www.fairwork.gov.au/ending-employment/redundancy/redundancy-pay-and-entitlements
https://www.ato.gov.au/Individuals/Working/Working-as-an-employee/Leaving-your-job/Redun d ancy-payments/

Unfair dismissal

You must have appropriate policies and procedures in place to manage employee performance. Terminating or dismissing an underperforming employee must be done in a manner that is fair, reasonable, and just.

HOW do you ensure you have terminated an employee correctly?

Small businesses with fewer than 15 employees have greater abilities to end employment via dismissal. The Small Business Fair Dismissal Code provides a framework for dismissal to ensure the procedure is fair. It also provides small business owners with some level of protection against unfair dismissal claims.

Under the Code an employer can dismiss an employee without notice for serious misconduct includeing theft, fraud, violence and serious breaches of occupational health and safety procedures.

In other cases, the small business employer must warn the employee a reason that he or she is at risk of being dismissed if there is no improvement. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to the Fair Work Commission, including evidence that a warning has been given. Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

The small business employer must provide the employee with an opportunity to respond when a warning is given and allow the employee a reasonable chance to rectifying the problem. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

An employee who is on a probation period is not likely to have worked the minimum period to qualify to make an unfair dismissal claim. The Fair Work Act 2009 indicates that an employee must be employed for a minimum of six months, or 12 months if the employer is a small business with fewer than 15 employees to make an unfair dismissal claim.

More details and a checklist can be found here. https://www.fairwork.gov.au/ArticleDocuments/715/Small-Business-Fair-Dismissal-Code-2011.pdf.aspx

Those businesses with more than 15 employees’ details around unfair dismissal can be found by visiting Fair work Australia. https://www.fairwork.gov.au/ending-employment/unfair-dismissal

HINTS ending employment

You should always treat people with respect and simply put yourself in their position and treat them how you would expect yourself to be treated irrespective of the circumstances.

An exit interview can be a great way to understand more about your business. This could help you measure morale, see what needs improving, and understand how well they were managed.

If someone is leaving for a better opportunity be happy for them and thankful for how they have helped you to date. Be proud that you may have helped them to the next step.

SUMMARY – ending employment via dismissal

People who leave by their own accord or others that you must remove have certain entitlements. The Small Business Fair Dismissal Code provides a fair framework allowing greater abilities to end employment via dismissal.

It is critical you perform this process correctly and follow the rules. If you are not experienced in this area we advise speaking with an employment lawyer or at the very least visit the Fair Work website for further clarification. https://www.fairwork.gov.au/ending-employment

Hire Staff – hiring the right people

Posted on July 14, 2020 by Angus Jones

A business is only as good as the people it employs. Do they work hard, do they work smart, are they loyal or do they just want that paycheck and be out of there. This guide will look at if you have a need to hire staff, defining the role they will do and the task that must be completed. Will they be full time, part-time, casual, or a contractor?

The common types of employment are:
full-time: an employee who works 35+ hours per week on an ongoing basis
part-time: an employee who works less than 35 hours per week and has a guaranteed minimum number of working hours
casual: an employee whose work hours may vary each week, depending on the work available
fixed term: an employee who works for a fixed period of time e.g. 3 months
shift workers: an employee who works shifts and gets an extra payment for working shift hours
An employee works in your business and is part of your business. A contractor is running their own business.
contractor can be great for short term projects and can also be paid by the hour without superannuation requirements.

WHY hire staff?

You may not have the skills or the time to do some tasks, or perhaps your time is better spent working on other parts of the business. If so and its time to hire staff assuming their efforts will drive more profit than their salary.

WHAT do I need to understand before you hiring staff?

Ask yourself, what level of skill will this person have and how much will you need to pay to attract the right candidate? You do need to comply with government legislation in regard to award pay levels which can be found here https://calculate.fairwork.gov.au/findyouraward and discrimination laws here https://www.humanrights.gov.au/our-work/employers/quick-guide-australian-discrimination-laws

HOW to hire staff?

Finding candidates

To find the right candidate, you can either do this yourself or use a recruitment agency. A recruitment agency will charge you either a set fee or a percentage of the employee’s salary. If you can afford this it offers a great way to only interview a small number of vetted candidates. If you decide to do this yourself make sure you don’t hire the first person you interview. Even if they turn out to be the right person you need a point of comparison. You can find people by word of mouth, an advertisement in your window, the local paper, social media post, or a post on your website or newsletter. A job board like LinkedIn or Seek is handy and with a small fee, it will significantly increase your pool of candidates.

Candidate selection starts before the interview stage where you decide who you will interview. Many businesses may have 100 applicants for 1 position. Start by setting the criteria that are most important from a skill perspective to perform the job, for example, must have managed people before. If the candidate has not they are out of contention. Seek has a function where you can ask candidates set questions during the submission process. Once this is determined start reducing your list of candidates down to around no more than six people. Your time is valuable and you cannot interview everyone. A very important criterion is to ensure the candidates have the right to work in Australia. There are ways around this but require a significant investment of time and regulation. https://www.business.gov.au/People/Hiring/How-to-hire-an-overseas-worker Even those with working or student visas have restrictions, students only being able to work 40 hours in a fortnight and holiday visa workers are not able to work for someone for more than 6 months.

Interview

Now it is time to interview. Consider where you will interview them, for how long, by whom, and specify if you want them to bring anything. Remember they are interviewing you as well as you interviewing them. A candidate wants to understand your business, and you as the boss, to decide if they indeed want to work for you. So some points to consider include what you wear, how you treat them and what questions you ask. You do not want to be a tyrant and you are not their friend so remember to treat them with respect. A successful practice is to ask each candidate the same questions and to rate them against each other. That way you have a clear comparison and a method of comparing the person you interviewed today with the one two weeks ago who you can hardly remember. You should take into consideration how each person fits with the skills set you defined earlier, how they will fit into your organisation culture, if they can show you their previous achievements and if they are passionate (remember a small business is only as good as its people).

In some industries it is common practice to test potential employees through a trial. We recommend that you pay them and give them a proper opportunity to show their worth.

You have now found the right person but before you hire them on the spot it is a wise idea to check references. Unfortunately, some people do lie, and the more you are sure about someone the better things will work out. Okay, all that checks out and the person has great references. Now it’s time to make them an offer. The offer needs to be clear around working hours, salary, place of work, anticipated start date, and may include additional items like employee confidentiality or IT policies. A template for an employment offer can be found here. https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/templates

On-boarding

Once they accept, congratulate them and provide them with any further information to ensure they know the next steps, like what time you need them and what the dress code is, etc. Now comes the hard bit. Unsuccessful candidates interviewed with you and chances are they put a bunch of effort into that process. You need to contact them and let them know they were unsuccessful. Ideally be specific with the reason, for example, they lacked a specific skill, so they can improve next time rather than some generic statement like the other candidate was better.

The big day has now arrived for your new employee. Before they turn up you need to plan to induct them into your business and decide what they need to be taught and by whom. Chances are it is you and it will take a lot of effort to begin with, but if done well you will have a happy and hardworking employee in no time.

You are now responsible for a new employee both personally and from a legislative perspective. If you don’t already have systems in place you must consider reporting like timesheets, payroll and taxation, superannuation, annual and sick leave, insurance, and workplace health and safety. (Be sure to check out our essential guides on these topics)

HINT

Candidates may attempt to negotiate employment terms such as wages. Always listen but remember it does not mean you have to compromise.

Additional information can be found here

SUMMARY – Hire the right people

Your people are your business. Having the right employees is critical to your success. To Hire staff can be a rewarding process and will become simpler the more experience you gain.

Freight solution to customers

Posted on July 14, 2020 by Angus Jones

Sending a parcel to someone seems like such a simple thing. You pop an item in a bag and you take it to the post office and you have a happy customer when it arrives. If you are looking for the right freight solution then this guide will explain what you need to know and what options are available for you to facilitate the shipping of your goods.

Logistics (or Shipping) is the commercial activity of transporting goods to customers. It is also the detailed organisation and implementation of a complex operation.

WHY do I need to deliver my goods?

If you have goods to supply you can have a customer pick-up or have it delivered. You want to increase your customer base to your immediate area, offer greater convenience or simply you do not want to offer a retail sale in a store you will need to offer delivery options. If you want to deliver you will need to select a freight solution.

WHAT do I need to know about shipping?

Let us make the assumption that you are not after a courier and that over a year you will have the need to deliver many parcels.

Your choices are:

Deliver them yourself or by an employee
1. If local could be a cheaper option but ties up your or your employees time.
Use Australia Post
1. Economical but you might have to take parcels to a post office
Use a specialised freight company
1. Will pick up from your location
1. Some even offer cheaper rates than Australia Post, with door-to-door delivery in a shorter time. Note however their service may not cover remote areas.

You need to package your goods. No good if they arrive broken. Thus, special care should be taken to ensure items are packed carefully and you select the appropriate size packaging for protection and economical shipping. A big box for a small item means you will pay to move air.

Specialised packaging might need to be considered to simplify shipping or protect the goods, like a padded bag which is fast to pack or a shipping tube for artwork.

Time is money and in this case the faster you want something to arrive the higher the cost will be. Thus the same day, airfreight, overnight, and even delivery at a specific time will cost you more. Some perishable items might require fast delivery.

Dangerous and prohibited goods may be banned or require special attention when shipping. This includes if an aircraft will be used. You should check with your freight company. The Australia Post list can be seen here. https://auspost.com.au/content/dam/auspost_corp/media/documents/dangerous-and-prohibited-goods-guide.pdf

HOW should I choose a freight solution company?

Cost– If you are starting off it is hard to estimate what your volumes will be but most freight companies including Australia Post will give you a contracted rate based on expected volumes. There will be sliding scales depending on distance so make sure you compare like for like. Also understand the delivery class of each, one might be overnight the other 4-5 days.

Tracking – Everyone offers to track these days but not all in the same way. Understand what tracking is available and how quickly it is updated and at what points in the process i.e notification only when picked up and delivered vs multiple notifications on route such as picked up, at a warehouse, in a van, and delivered.

Estimated delivery time – Not all companies use their own trucks and might rely on others. What you care about is how long they estimate delivery. Fast delivery equals happy customers especially if they have not paid a premium for that service.

Pick-up– Will your freight company come to you or are you required to drop everything at a depot or post office. This is likely to have an effect on the price.

Signature on delivery – Valuable items such as currency, jewels, or important documents may require a proof of delivery in the form of a name, signature, or photo.

Insurance – Most freight companies provide a minimal amount of insurance and if items are lost in certain conditions you can make a claim. For example, Australia Post may compensate you up to $100 for lost or damaged items. You should take note of what is covered for how much and in what circumstances. You may also wish to understand the costs of additional insurance if needed.

Integration – If you can integrate your e-commerce store or POS solution with your freight company you can eliminate a bunch of administrative work around labeling and booking saving you time.

Phone support – What hours and support can the freight company provide to you. If you have a lost package at 6pm on a friday can you get help finding it?

HINT

Don’t underestimate the time it takes to pack an item ready for shipping, organise the transport, and attach the labels. It all adds up.

Freight companies charge by both volume (dimensions added up) and weight. If you have a light bulky item you will pay based on the volume. If you have a tiny heavy item you will be charged by the weight.

These two websites do a comparison of freight charges as a one-off and may be useful to help you decide which freight companies to contact to ask for contracted rates.
https://www.comparecouriers.com.au/
https://www.parcel2courier.com/

SUMMARY – a Freight solution is a cost and a customer service

Offering delivery of your goods can increase your customer sales. These customers must be kept happy and have a good experience in a timely manner. Importantly, keeping your freight solution costs lower will increase your profit. Pick the right freight company for your needs today then review your decision at least every 2 years.

Finding a business premises

Posted on July 14, 2020 by Angus Jones

You are ready to make that big move and open a restaurant, or maybe the home garage is not big enough anymore, maybe you want to be considered seriously and need a professional workspace. How do you go about finding that property? This guide will help you on that journey of finding business premises.

WHAT do we need to decide first to find new business premises?

Your journey starts by deciding on the criteria by which you will make your decision. The better your list the better result you will get.

You need to consider:

Will you buy or lease/rent a property?
Would you be prepared to share it with others? There are options around co-location or shared offices where you can run your business from a location shared by other businesses and thus share some of the facilities like a conference room or even a receptionist.
What are your needs and wants in a property? – If you are opening a restaurant you probably need to be in a popular location. If you are opening a retail store does that need to be in a mall. Will customers find you in an industrial estate? How much room will you need? If you are establishing an office you would need around 10 square meters per person. Do you need a kitchen or 3-phase power? How much parking will you need? Can trucks access your location easily? Do you need to be close to your customers? Is there a need for public transport so your workers can get to work? Do you need to consider your future needs?
Will council zoning impact your choice? For example, some business types cannot operate in a residential area.
What is your budget? Can you afford it? Also consider other outgoings like office set up, moving costs, annual rental increases.

HOW do I find the right business property?

Now the search begins in earnest! There are several ways you can find properties:

Find the location yourself by searching for your desired area. A For Lease sign is a dead giveaway
Speak to a local real estate agents
Contact a commercial real estate agent
Find a Property Broker, they will search on your behalf
Use the commercial sections of property websites realestate.com.au or domain.com.au

Using your search criteria and now having a list of possible locations, it is time to visit those properties. Be patient, do your homework and be careful not to make hasty decisions.

Once you have made up your mind it’s time to negotiate the price. Chances are you can get it for cheaper so start talking turkey.

HINT

A good idea is to ask existing neighbors questions about the location/ intended premises.

Be sure to read our essential guide on renting an office

SUMMARY – Finding the right business premises!

Decide if you will buy or lease then come up with a want/need criteria list. Be patient and don’t forget to negotiate on price.

Expense management

Posted on July 14, 2020 by Angus Jones

If you have employees, chances are they will spend money that they will claim back from the business. Is the $200 bottle of wine an acceptable expense? Is there an easy and quick way to process those expenses? This guide will look at how you can use expense management software to improve employee productivity and ensure your records are more accurate.

Expense management refers to the systems deployed by a business to process, pay, and audit employee-initiated expenses. This most likely will include policies and procedures that govern such spending, as well as the technologies and services utilised to process and analyse the data associated with it. Expense management software helps simplify this.

WHY consider Expense Management Software (EMS)?

Imagine you leave a restaurant, open an app on your smartphone, take a photo of the receipt, select the applicable expense item, and submit for approval and payment. You are done in less than a minute. Why? – Because EMS cuts down manual processes, it is easy and fast for both the employee and employer.
Predominately being cloud-based solutions make the software affordable.

What is the difference between manual vs automated expense control?

Advantages of automated expense control:

Productivity. Time and money lost due to misplaced receipts, forgotten expense approvals, and error-prone manual data entry, can put a significant drain on employee productivity and morale. Expense management software can curb these issues and increase efficiency.
Captures GST. The GST on each receipt can be accurately captured for allowable credits (talk to your accountant to understand what is allowable, for example, entertainment is not)
Automatic integration. Allows expense data to be loaded straight into your accounting package without any manual processing.
Analyse spending. The ability to track spending by expense category, unit or vendor provides insight into spending trends and identifies areas for cost savings. Organisations can improve their cash flow cycle and forecast for future expenditures.
Compliance. Internal policies, as well as external government and tax regulations, can cause non-compliance risks for a business. Expense management systems help reduce risks by evaluating expense reports against internal and external regulations.

How do I select an expense management system that is right for me?

Features you should evaluate include:

Accounting integration – Many systems integrate with popular accounting packages such as Xero and MYOB allowing for easy export of reports and eliminating the need for manual data entry. Be sure to read our essential guide on Accounting Software.
Expense compliance – Having some spending policies is a good idea, like a meal allowance whilst traveling. Will the software enforce spending policies and assist with fraud detection flagging expense overruns, duplicate expenses, missing documentation, and so forth?
Car mileage – Ability for an employee to track kilometres traveled for a work trip using their car.
Approval – Does it streamline the review and approval process by enabling you to approve based on expense type and other variables?
Analytics reporting – Will reports help forecast and budget for future expenses, identify spending trends, and highlight cost savings opportunities?
Automatic expense import – Do you want it to connect to email accounts and credit cards, allowing users to pick and choose charges to add to expense reports?
Smartphone receipt capture – Enables users to scan, email, or take a picture of receipts for easy submission.
Direct deposit – Do you want it to link directly to employee bank accounts for quick and easy expense payments.

Summary – photo receipts and accounting software integration

There can be some very fancy features offered from the expense software vendors but in the case of the small business, we recommend you go with the software that offers the basic features like uploading photos of receipts and accounting package integration to minimise costs. You may also find your accounting package either has this feature built-in or an add on module can be purchased.

Bank account for small business

Posted on July 14, 2020 by Angus Jones

You have started your new business, you open your wallet and pull out some cash, and you wonder is that my money or some petty cash from my business? Even if you have chosen to be a sole trader it’s a great idea to open a bank account, if you are any other business structure you must have a business bank account for tax purposes. Once you do it opens up the ability to articulate which money belongs to you and which to the business. This guide will help you understand the benefits of having a business bank account and help you understand what you should consider in selecting an institution.

A bank is a financial institution that accepts deposits and recurring accounts from the people and creates demand deposit. Lending activities can be performed either directly or indirectly through capital markets.
Wikipedia

WHY have a separate Business Bank account?

When running a business you must keep account of business transactions and a bank account is a great way to have an auditable paper trail.

A separate business bank account will help you to:

Clearly show your business finances separate from your personal finances
Analyse your cash flow
Monitor your business income and expenses
Extract information needed to meet your tax and reporting requirements
Get detailed records of your business transactions. These can be downloaded to a spreadsheet or imported to an accounting package.

WHAT else can you do with a Business Bank account?

If you have a credit card attached to your business bank account and do most of your transactions through your credit card, your bank statements will, in effect, be a checklist of those expenses.

Some banks offer overdraft facilities, essentially providing a loan facility to go into a minus balance.

To open an account you will need an ABN and ID documents of an authorised owner or director of the business.

HOW to choose a business bank account?

So which bank should you choose? In fact you may not choose a bank, it may be a building society or credit union. The answer is the one that suits you best and you should consider these points when making your decision:

What are the fees and charges?
Do they offer merchant facilities like EFTPOS?
Are their interest rates competitive if you need to borrow?
Do they cater to the needs of small businesses and do they have offers/solutions to suit?
Is there a local branch in case you need to visit?
What is their online banking interface like and will it integrate with your accounting package?
What information is reported on each transaction?
What security measures do they offer for online transactions to protect your business?
How fast do they transact instructions and until what time at night?
Do they offer foreign transfer arrangements and what are the charges?
Can you have access to your own bank manager or business banking specialist?

For more information and comparing various bank accounts visit
https://www.finder.com.au/business-banking

For taxation purposes, the ATO provides the following guide on record-keeping https://www.ato.gov.au/Business/Record-keeping-for-business/Detailed-business-record-keeping-requirements/Running-your-business—records/Banking-records/

Here you will find useful information such as the requirement to keep records for 5 years including the period of review. For example, did you know that if you did your 2015 tax return in 2016 you would need to keep your 2015 tax records until 2021.

HINTS

Regularly bank all the cash your business receives so your income and expense information is always up-to-date and you can easily reconcile your accounts and analyse your cash flow

Register for online banking – this may simplify your record keeping and bank reconciliation process as you can:

easily get detailed records of your business transactions
download financial information from your online account to your accounting package
identify extra transactions in your account including bank fees or interest charges, and direct debits and credits
check and record any errors or omissions

Regularly reconcile your bank records, which may help:

you be more confident that your records contain all the information you need to prepare your tax return and activity statements
you to better understand your cash flow
reduce the time it takes to prepare your activity statements or tax returns

SUMMARY – Small Business Banking

Unless you are a sole trader you must open a business bank account. It will help you manage your finances and different providers will have an offer to suit your needs. Always check to see what other services the bank may be able to offer your business.

A handy comparison of bank rates and fees is available here to help you compare. https://www.finder.com.au/business-banking