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07 May 2009

Testing the Waters, Toe by Toe - What business structure should I adopt?

The first question I had in mind was about my Business Structure. I had a basic understanding of this, all thanks to the Accounting Course I took during my MBA. There was only one problem; I did it 4 years ago!

So I needed a bit of a brush up. Since I wanted to bootstrap my business, going to an accountant at this "very early stage" was out of the question.

My first step was to find relevant free online resources and they were aplenty. I stuck to Govt. sites and while browsing through them, I stumbled upon DTED's (Department of Trade and Economic Development) web site. DTED is the South Australian Government's key economic development agency.

I was excited to see that DTED provided "Absolutely Free" training to people starting their own business. I went berserk and registered for all the available courses I thought would be of help to me. There were courses ranging from Accounting & Finance to Exporting for Beginners.

These courses were run normally from 5.30 PM and lasted 3 hours. The classes were facilitated by people who ran multiple businesses over the years and/or subject matter experts. I found this very useful as the training was relevant and comprehensive.

The other advantage was, the attendees were mainly Small and Medium Business owners. This meant that I was able to understand the common issues and possible solutions pertaining to the Small and Medium Businesses.

Coming back to where I started, I attended a course on Business Structure and it made all the concepts clearer. After the course, I was beginning to think that I should start as a sole trader and set up a company & trust once it makes sense to do so. However, after a few days, while I was discussing my plans with a couple of other Business Owners, they suggested that I should go for the company structure by buying a shelf company online.

They also talked about the Tax and Legal implications that I would need to consider. I got a bit confused. I realised that I really should consult an accountant after all, but I did not want to go to the one we already had!

I was not sure where to start as there were so many accountants in Adelaide. A situation similar to the one we encountered while searching for a builder for our home...

When I did the Business Structure course, I found that, in addition to training, the center also provided Free Mentoring. The mentors were volunteers and veteran business owners.

My mentor gave me the details of a few accountants but added that ultimately it is a personal choice and that I must feel comfortable talking to him/her. The other important aspect to consider was to see if the accountant was proactive in giving appropriate suggestions and updating the client with relevant information. The advice he gave me really made sense as I could relate to the "proactive" bit, with my current accountant!

A few days later I went for the "Understanding Business Finance" which was a follow-on to the "Business Structure" course. It was run by an Senior Accountant at BDO who gave the attendees a free 2-Hour consulting session.

I decided to make use of it as a part of my "finding an accountant" saga. Luckily, I was quite comfortable discussing things with him and he knew exactly what he was talking about. He gave me some good suggestions based on my circumstances and he also gave me a simple plan of action which really made sense.

Finally, that piece of the puzzle was solved!

Read Part 3 - Testing the Waters, Toe by Toe

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