If you're setting up a new business then you need to decide what kind of entity it will be structured under.
A business name (or 'sole trader') is generally for those companies that are starting out. This structure has certain liability attached to it that makes the business owner personally liable and is essentially the same as trading as an individual but with a business name or title.
A company structure on the other hand provides a formal entity and a shareholding which numerous parties can be shareholders of and provides a structure that offers directors (individuals that run the company) to run the business with a limited liability while also offering the ability to have numerous shareholders who control the equity in the business. Shareholders can appoint directors to run the business and a shareholders agreement outlines how the business equity will work and who controls the business based on their share type and quantity.
Companies provide a platform for doing numerous arrangements in future and offer flexibility to stakeholders.
Companies provide protection for individuals providing they meet the basic running requirements of a company. Their personal assets remain somewhat protected. Unless a director offers personal guarantees then it is not expected that his or her own assets will be security for any company failure.
While this is not accounting or legal advice, this advice is provided from a business management perspective and is in relation to the structuring of a business for best running practice.
By structuring the business as a company (In Australia this is known as Pty Ltd or Proprietary Limited company) it offers business directors the ability to be excluded or included in the shareholding of the company. This provides numerous benefits for taxation reasons and also provides the ability to have multiple companies interacting with each other for a global purpose. In other words, those who run the company may not be those that own it.
The taxation benefits of a company structure also may be beneficial when compared to personal tax treatments. Essentially business owners use companies as an entity structure to provide separation between themselves and the business. They can also use company structures to provide protection for valuable intellectual property and revenue centres.
Protection against fraud and operating risk is also a reason why company structures are utilised. For example; a company holding a valuable amount of intellectual property may structure itself to have a trading entity and an intellectual property entity. The reason for doing this is that if the trading entity is sued due to an issue in business then the intellectual property that another company holds remains separated from this risk. Companies often work together using a number of business instruments generally in the form of licensing and contract agreements between themselves.
It is not uncommon that multiple entities will share a similar share structure and that structures are put in place for business strategy reasons including risk mitigation, preparation for a public entry to bring liquidity to shareholders, asset protection, lending suitability, corporate governance and individualising profit centres.
Governments generally support the establishment of companies to offer entrepreneurs a buffer with respect to the risks associated with growing businesses as generally they see it beneficial to stimulate the economy while also providing entrepreneurs with a realistic risk profile in terms of their own personal risk attached to any one venture.
Shareholders in a company enter a shareholders' agreement with the knowledge that there is a certain amount of risk associated with dealing with a Proprietary Limited Company and therefore the governance of a Pty Ltd company is somewhat relaxed when compared with a public company.
Shares in Pty Ltd companies are often relatively speculative and entrepreneurs sell shares in companies as a means of generating the required investment to take their company to the next level or for liquidity reasons to realise some of their hard work. Pty Ltd shareholders are usually either initial contributors to the business either via intellectual property, labour contribution or they may invest through financial contributions (Start up capital).
Every country works slightly differently with respect to registering a company and/or business. Here is a link to some great info in Australia:
So you have been thinking about getting a business coach but you are not sure what they can actually do for you. That is okay; standard. Many people struggle with understanding the benefits of a business coach.
Probably, the most important thing to recognise is that as an entrepreneur, there is only so much you can know about business. Your skill is your core-business or the field of expertise you have chosen to follow. However, a business coach has spent their life dedicated to the field of business as a whole.
The strategies behind business are somewhat the same no matter which industry you apply them to. The theory behind making businesses successful is complex and requires an expert in this field.
Imagine for a second that you are an international athlete; you are an expert at your specific field of sport, but the science behind health, nutrition, muscle, creation, sports therapy and mindset coaching are each individual areas of expertise that you can benefit from. It is the same in business.
Many of the world’s most successful business people are experts in a particular field that they have chosen to focus on but they rely on the general expertise of others to mentor them to see opportunities that they would otherwise be unable to identify.
There are two ways to improve your general business knowledge that will pay dividends for you long term.
The first is to surround yourself with people that have a different skill set to you.
The second is to find yourself an expert in the specific area of business that you are looking to improve. For example, if you are looking to grow your business, then a marketing or business growth specialist will be the adviser for you.
Sometimes, the role of the business coach is simply to help you decide which areas of your business you need to improve.
Different business coaches use different strategies for achieving results. Some of the key metrics that business coaches use to improve businesses are:
- brand awareness
- consumer traffic
- consumer enquiry
- sales conversions
- customer retention
- customer frequency
- service delivery
- profit margin
- risk profile
- recurring revenue.
These are just some of the ways that business coaches improve businesses on a regular basis.
So how do you identify the right business coach for you and your business?
It generally starts with identifying someone that you can relate to and that you respect enough to listen to and take advice on board. Finding this person can be challenging, however, it is important that you invest the time upfront to find this person as going with the wrong coach can actually work negatively in your business.
There are a lot of business coaches out there that simply act as an emotional guide rather than offering real substantial information that can help you on a daily basis to improve your business. Be careful about engaging business coaches that have a reputation for being merely a support system. You ideally want to be engaging individuals with a proven track record in business and legitimate testimonials that they can offer, which shows their abilities have been put into practice and results have been achieved.
How Much Does a Business Coach Cost?
A good business coach can cost anywhere from a few hundred dollars an hour to tens of thousands of dollars a year. Be careful to avoid those companies that try to lock you into long-term contracts as often the reason for doing this is because they predict that customers would not see value long term, therefore, they see it as a requirement to lock their clients into long-term agreements.
The best business coaches are those that charged on a performance basis or allow customers to come and go freely because they are confident that the advice they offer will be valuable and relied upon for the long-term.
Finding a successful business coach who has successfully mentored others to success is critical if you are going to grow your business with the assistance of a professional. Taking advice from the wrong person can be very risky and you need to be careful that the business coach you engage is speaking from a place of experience and can offer you some assurances with respect to the outcomes you can expect to see from implementing their ideas.
The Difference between a Motivator and a Business Coach
One of the most dangerous things to confuse is the role of a motivator with a business coach. A business coach should be someone that is highly experienced in the art of business and growing businesses with as little risk and as aggressively as possible. A business motivator on the other hand is simply someone that you meet with regularly who can push you to explore the depths of your own intelligence and ingenuity to perform yourself.
Management consultants are traditionally where public listed or large-scale businesses and governments go for business coaching style advice in a more formal fashion. Management consultants offer management the knowledge that maybe missing within their enterprise as if it were their own, adding to the businesses intellectual property and intelligence bank without the traditional motivational approach. Corporate and highly-governed businesses tend not to want the motivation portion of coaching but rather prefer to focus on an information or best practice approach to business coaching thus it is packaged as management consulting.
So are you looking for a management consultant, a business coach or a mentor? This is the question you will need to answer yourself but finding somewhere to start is step one and the best place to start is somewhere that will put less risk on your business but provide you with ample opportunities that you can take advantage of as they make sense.
Good luck with your coach and let me know if you need an intro to one who can perform in your industry.
There are heaps of advantages to having a 1300 or 1800 special number. Check out my short video here on why it is so critical that you update your old mobile or landline to a 1300 smart number RIGHT NOW. It really does make a difference to your marketing and it really does help you appear more professional. You can also save a lot of money as many clients have reported that they could completely replace their receptionist with the use of IVR (Internet or Interactive Voice Response) that offers a PUSH 1, PUSH 2, PUSH 3 set of automated options for callers. Also note that 1300 numbers don't require any hardware which makes it ideal for start-ups too.
The most exciting thing about business is that ANYONE can do it. Literally ANYONE. From trading basketball cards with your friends on the football field as a kid, to washing your neighbor's car; doing business is in our blood but many of us get caught up in the rat race, thinking it’s too hard or expensive to start a business so we settle with a relatively boring life.
The number-one reason that employed people don’t start a business is the perceived risk of leaving a regular salary.
The following information is designed to inspire budding entrepreneurs by breaking down the steps of starting a business. No matter what your starting capital, if you are passionate about doing it then it can be done. You don’t have to be rich but for every cent you save you better be willing to invest your time. The good news is; it will pay dividends.
Here are the steps to getting started in business:
LMNT provides on-the-money resources to those people most passionate about success in every aspect of their life.