When it comes to selecting the most appropriate structure for your business it is important to remember that what is right for one person might not be right for you.
Too many times we see examples of someone “doing it themselves” and setting themselves up with a structure which isn’t right for their circumstances (usually because “that’s what my friend did”).
The correct approach to business structuring is to start with the end in mind. What do we mean by this… simple… let’s look at a quick example.
Client 1 – Wants to start a coffee shop in a busy inner city location.
Client 2 – Wants to start a coffee shop in a busy suburb.
On the face of it the businesses were exactly the same, but in reality the appropriate structure for these two clients will be totally different. It is not until you explore the goal for your business that you can establish an appropriate structure.
So what’s the difference (and no it isn’t the location)? Remember… start with the end in mind.
Client 1 wants to run the business himself and eventually hand it down to his daughter who is about to finish high school.
Client 2 wants to bring on a partner into the business and potentially franchise his business into other locations.
These differences in the client objectives will have a major impact on the ultimate structure for this client.
When we provide advice on business structures to clients we always take into account:
- How to minimise income tax on an ongoing basis
- How to minimise capital gains tax on eventual sale
- How to maximize asset protection
- How to allow for the admission of new business partners or investors
- Any structural issues specific to your industry
- The cost v benefit implementing the proposed structure.
What structures are available?
The most common structures in Australia include;
- sole trader
- unit trust
- family (discretionary) trust.
What’s the next step?
A one hour structure meeting in our office will help you explore these options and it might surprise you that we do not charge for this initial meeting. We would prefer that you get the right structure from day one, rather than having to fix the mess in 12 months time.
To arrange a meeting call our office on (07) 3160 7386.