Choosing the right vehicle for your business

Choosing the right vehicle for your business.

Let’s just say you want to drive across the Sarhara,” says Jim Vass. “The likelihood is that you’re not going to go and buy yourself a Mini Moke to do it in, because it’s just not going to get you there.”

Quite simply, it’s the same in business. You must have the right vehicle to move forward, to take you where you want to go.

When you start in business, it’s not always easy to know exactly where the business is going.

You can have a strong vision, but things change – and there are many factors that can affect the way you grow.

It’s also a fairly well-known fact that a whopping 60 percent of Australian start-ups fail. Why? Most of it comes down to inadequate prior planning.

Planning before you even begin, is vital, for many reasons. But mostly, because it will help you to determine the right structure for your business. Your initial business plan and forecasting as well as your vision and broad guidelines for growth, will determine how you structure your business.

What is a business structure?

“Choosing a business structure might seem, on the face of it, to be fairly straightforward. But … don’t be fooled,” says Jim Vass.

What is a business structure

“All businesses in Australia are required to be registered with the Government, and your business structure is essentially, the way the government defines your business operations for legal and taxation purposes.

“For example, the structure you choose will dictate your business’ GST obligations, how the profits and any losses of your business can be divvied up. It also affects who pays what taxes and exactly what you can claim at tax time. It also determines who is liable – that is legally responsible – if something goes wrong.”

Business structures

Business structures

The four most common types of business structures in Australia are: Sole Trader, Company, Partnership or Trust. And within these categories, with the exception of Sole Trader, you also have several options.

You may also choose to set up a Co-operative, an Association, or a Not-for-profit organisation, depending on what you want to achieve, although these are much less common.

“The thing you must realise,” says Jim Vass, “is that once you’ve chosen a business structure, it is not easy to change.”

“It can be done, but it often involves restructure. This may then have stamp duty or capital gains implications. It’s likely to involve legal fees, valuations, and business advisory fees. It can be time consuming and expensive.”

Get professional advice

Get professional advice

It is widely recommended to seek advice from a professional business advisor before you decide which business structure to use.

A business advisor can help you to decide what’s right for your business, and also how to go about setting it up.

“Take a look at our 5-Step process and our free e-book – both are invaluable resources when you have a young and growing business for helping in both set up and ongoing planning,” says Jim Vass.

“A lot of people rush in, without realising how important it is to get the basics right. But, just as when you’re building a house, foundations need to be well thought out and solid, or when you’re planning a trip, research is necessary so you can make the most of your time away. When you’re setting up a business, getting the core structure right from the ‘get go’ means you can move forward with confidence, knowing that you’ve got the right vehicle for your journey,” he says. “If we can help, contact us.”


Simply enter your details in the boxes below. Click ‘Send Request Now’ when you have completed your details and we’ll email to confirm your appointment.