When is the best time to start a business? Starting a business is a lot like starting a relationship. If you aren’t willing to put the work in it’s probably going to fail. There may be no perfect time to start a new business but there are some criteria you should consider.

TIME

First off, you have to ask yourself if you have the time to commit to a new venture. If you can’t commit 150% to this thing it’s going to fail. If you are going through a divorce or having a child or planning a wedding you might not be able to do this.

PERSONALITY

It takes a certain kind of person that will be successful operating a business. You have to have a number of different skills. From managing and organization to marketing and advertising – you have to wear a lot of different hats.

FINANCIAL

You might have the best idea in the world but if you don’t have the money to back it up you’re going to be in trouble. Many businesses are going to to struggle for at least the first few months and you will have to have the money in place support the operation at the start.

FAMILY

The stress of starting a new business is going to take a toll on you but also on the people around you. Your family will be affected by your decisions both financial and in terms of the time you have to spend with them. You need to have enough time set aside for them or you are going to be unfulfilled.

Today we are going to interview Craig Vaughan an award winning mortgage broker with many years’ experience. I’ve worked and advised Craig through much of that time. I wanted to invite Craig to join us on the show today to talk about focus in business. Phase 1 of the Business Legal Lifecycle deals with goal setting. Those goals can change as the business progresses. The challenge is how to change focus without compromising your company’s profitability or long term viability. Craig’s career is a great example of how to change a business’s focus successfully. Craig first started by running a mortgage brokerage business. That eventually morphed in a mortgage broker software business. As the business grew he also had to secure investment in this new venture.

Today we are going to talk about choosing the right name for your business. You want something that will stand out and will be easy to market. You have to choose something that’s right for you. To get you started we want to run through four tools you can use to choose the right name.

Search Engine

It may seem simple but using Google to search for your idea for a name to see if it’s already in use will save you a lot of time. A web search will also reveal the names of other businesses in the same sector as you which might help you generate some name ideas.

Doman Search

You want to search through existing web domain names to ensure your company name is available with a .com suffix. Go Daddy will tell you whether your web address is available.

ASIC Search

The Australian Securities and Investments Commission keeps a database of all registered businesses in the country. Every company in Australian needs to have a unique name and a quick ASIC search will tell you if the name you want is available.

Trademark Search

Even if the business name is available someone may have already trademarked that name or phrase. You want to ensure that you aren’t going to run afoul of trademark rules and end up in a lawsuit.

Recently we had a client who tried to trademark the name of the business he had spent 20 years building. When we went to register there were already dozens of businesses with that name. It took him months and a lot of money to rebrand the business. You want to make sure you select a unique name so you can protect your business.

We continue our discussion of Phase 1: Conception by asking a simple question: What are you doing? If you don’t know where you’re going you’re never going to get there. Setting goals is the key to achieving great results with your business. Very few people start their business with the end already in mind. You don’t need to know exactly where you’re going. But you should have a few key concepts figured out. Those include:

Business name

What are you going to call yourself ? Does anyone else have that name? Is it trademarked elsewhere? You need to get the answers to those questions before you begin to setup your firm. You also need to have a name for your company and your legal entity. They are not the same thing and you need to know the difference.

Buying a new Business

Business Purchase

When you do a business purchase it allows you to structure yourself in such a way that you can sell various parts of business without selling the whole company. If you run a real estate company you would be able to sell the sales part of the business while keeping other parts. There are advantages and disadvantages to this but having a business as a separate entity allows you to slice off parts of the company when you want to.

Share Purchase

Share Purchase allows others to take a stake in your company. If you have several businesses operating under one legal entity the investor will be able to take a position in all of those businesses. There are some disadvantages which include the investor having to take on all the liability of the business.

Share Subscription

This is similar to a Share Purchase but it differs in a few ways. If 100 shares already exist for you company you could choose to issue additional shares. You might want to do this for tax reasons. There are lots of complicated rules around this and in future episodes we will go into greater detail about how this works.

Setting up a new business

Before you put out your shingle you need to have the proper structures in place. This is where you are going to rely on your lawyer, accountant and business advisor. Some of those structures include.

Companies

When you have your business in a separate entity it helps protect you from liability. If something goes wrong with that business without a company you will be on the hook for those debts. That’s way too big a risk. Yes, it costs more at the start but setting up a company could save you a lot of money in the long run.

Discretionary family trusts

A trust is structured with the Trustee at the top of the pyramid. There are also beneficiaries of the trust and an Appointee who has the power to appoint a new Trustee. The Trustee owns the business and there are tax benefits and risk protection elements to structuring your business in this way.

Unit Trust

A unit trust is set up very similarly to a discretionary trust. Like a company its unit holders are entitled to a percentage of the businesses income. A unit trust does not have an individuals as the trustee. Rather, a separate company is created to carry out that role.

Partnerships

A partnership agreement allows for equal management and ownership of your business. There are liability issues with partnerships as well. They are not as popular as they used to be but partnerships are still the best structure to use for certain industries.

For Fast Fix Monday we are going to give you a quick primer on how to set goals for your business. There’s a quote by Buckminster Fuller “The best way to predict the future is to design it. If you don’t think about the future than you can’t adapt to the changes.

Stephen Covey wrote in his famous book The 7 Habits of Highly Effective People that that starting the process with the end already in mind is key to success. Many people start out on their business journey without a clear goal. Do you want to eventually sell the business to a multinational? Do you want to use it to support a comfortable income? Would you like to eventually hand the firm over to your children? You should have at least asked yourself these questions before you start your business.