starting a business

[breamnut]

well i have sold my boat to ''chrisallangler'' and am now in the prosess of savin a bit more and gettin a new alay craft 445 shaddow with the new honda.
but i have asked the dealer to get me a price on gettin it in survay but i wanted to know how much is is for a licence these days??
i want to start lure fishing charters on tweed and a few other waterways.
i have my tickets eg coxwains so i am legaly allowed to start one up.
i will also be able to write some of the costs of on tax.

[Leighton]

Public Liability
Income Protection Insurances
and a Good accountant

[PinHead]

so called writing things off on tax is a furphy...you have to spend the money in the first place.
Do a business plan...and don't make it all sound rosy as running your own business can be far from it.
You will have to consider:
Gov't License fees
multiple insurances
replacement for boat and other equipment
taxes
yur wages
and then on top of that..a profit.

THEN..an exit strategy..if it is all going pear shaped have it planned how to get out with the minimum of coast to yourself.
plus..have a strategy as to when you would like to get out of the business and at what size you want it at that point..then fill in the gaps with growth etc
but keep it all realistic.

Then..have a minimum of 20k avaialble at any time.

[rubba]

pinhead pretty well sums it up mate

[FNQCairns]

Suspect also you will need to sweet talk fisheries, that will probably be the biggest hurdle but dunno for sure.

cheers fnq

[Blackened]

G'day

Get onto smartlisence, a government agency you go too, tell them what you want to do and they say this, this this and this with regards to government and councils

Dave

[Tangles]

Pinhead summed it up,

Ill emphasize profit, different businesses have different overheads/expenses but from my experience in business

1: Cash is king!!

2: Have very clear and precise business strategy goals, ie growth or sole operator etc have a business plan, whats your market, what are your competitors, what do you offer to clients that competitors dont, whats your competitive advantage, why would I go to you and not others?

3: Determine the profit levels for type of business and if your not making at least 12% after everything is allowed for, ie expenses, taxes/overheads etc then forget it, your better of in a house/ shares...

In really simple terms this means you cant really spend more than 50 cents in the dollar before tax and overheads etc ( ie some restaurants operate on not spending more than 30 cents in the dollar before tax O/Hs ). By the time you take out overheads/taxes.. unexpected bills if your over your 50 cents in my opinion your going nowhere and just treading water. ( Its more complicated than this as different business have different wage/expenses/OH mixes but it gives you an idea, get advice !)

Once you have a business plan, stick to it and like Pinhead said have an EXIT strategy,

Get a business mentor as well and most importantly, pay any taxes on time!!, those boys do not muck around.

Good luck

Mike

[breamnut]

cheers guys
im really keen on doing it and not affraid of spending a bit of money.
a big thanks to pinhead and i will look into it.
i have a good mate who's mum is an accountent and ive already talked to her and it seems to be going ok.

[Tangles]

Breamnut,

Mate i would seriously consider an independent accountant who isnt family or friends as a second opinion.

mike

[boatboy50]

Breamnut,

Firstly, I have a couple of Qld commercial survey Polycraft's available second hand which may suit such a business. PM me if you are interested.

Secondly, I'm in the same boat kind of.

Can anyone tell me if a guarantour is a standard thing on a commercial lease? The lease is in the company name, but i've been asked to sign as guaranour, which I didn't expect or feel comfortable with.

Any ideas?

Regards

Darren

[Davey1]

I read an article about tax and boats a few years back. Basically the conclusion was that the ATO assumes that anyone trying to claim boat related business expenses is having a lend of them. They have very strict rules & evidence requirements. The article advised get detailed advice from a tax expert as the ATO has seen it all before when it comes to blokes buying boats for, er, business purposes.

That's not a reason not to have a go though, good luck with it.

[Mtx]

Boatboy, it is not uncommon for a commercial lease to be signed with a guarantor. The guarantor is most likely required to be a director of the business that the lease is under.

Otherwise, you can close the business and bugger off any they have a folded entity that they can extract no money from. When a director signs, they are effectively offering their assets to back the lease.

Very common practice.

[blue_mako]

i have my tickets eg coxwains so i am legaly allowed to start one up.


How'd you fit in a years seatime? :S .

Troy

[tigermullet]

Breamnut,

Mate i would seriously consider an independent accountant who isnt family or friends as a second opinion.

mike

I certainly agree with Aigutso!

I can barely believe what I am reading on this thread. It is too late to go into detail because in a few hours I have to help a friend move a large boat.

Boatboy - please get independent, qualified advice also. Not understanding the role of a guarantor, even for a commercial lease, is fraught with danger. Not expecting to have to sign, is worse because it indicates that you have not got any sort of legal advice.

Please be very careful and always keep in the forefront of your mind the answer to that old question, "What do you call a guarantor?" "A fool with a fountain pen."

Over the years I have lost count of the numbers of people financially ruined because they did not know the bleak truth of that answer.

In your case it might be ok to sign as guarantor if you are the only, effective, director but if any other party is going to be responsible for the lease and you are signing just as a guarantor then run the situation past a solicitor.

Better still, if you are thinking of signing as a guarantor for some other person then drop the pen and run like hell.

[TheRealAndy]

I am a business owner. Number 1 rule, BE REALISTIC. Can you really make a quid of what you want to do or is a just a pipe dream? Writing stuff off tax wise is great, but you have to be making money first. Listen to you accountant, they know what they are talking about...

[TimiBoy]

Can anyone tell me if a guarantour is a standard thing on a commercial lease? The lease is in the company name, but i've been asked to sign as guaranour, which I didn't expect or feel comfortable with.

Darren

Mate I have a heap of Business finance, and I am guarantor on every contract (I am also the sole Director). They simply want to be able to make claim on your personal assets should it all go pear shaped - it also gives them a feeling that you are committed to the Business.

After all, if you won't guarantee it, does that help them form the perception that what you are proposing is something you believe in? If you believe in it, guarantee it. If you don't, then don't get in in the first place!

And don't try shifting all the assets into the wife's name - they'll smell a rat, and you'll find it harder to get finance anyway.

Cheers,

Tim

[TimiBoy]

In your case it might be ok to sign as guarantor if you are the only, effective, director but if any other party is going to be responsible for the lease and you are signing just as a guarantor then run the situation past a solicitor.

Better still, if you are thinking of signing as a guarantor for some other person then drop the pen and run like hell.

What he said!

DO NOT GUARANTEE IF YOU ARE NOT THE SOLE DIRECTOR!

If it's a partnership and the other party is not prepared/ doesn't have assets/ hasn't been your best friend for 500,000 years, march. The bastard'll screw you, count on it.

[PinHead]

I sign no guarantees at all..had a few businesses want me to open aco####s with them..they wanted personal guarantess..told them no way. I am the sole director of a company..a company is a separate legal entity to myself..has its own TFN and pays it own taxes. I will sign on behalf of that legal entity but under no circumstances will I guarantee anything for the company.

[boatboy50]

I certainly agree with Aigutso!

I can barely believe what I am reading on this thread. It is too late to go into detail because in a few hours I have to help a friend move a large boat.

Boatboy - please get independent, qualified advice also. Not understanding the role of a guarantor, even for a commercial lease, is fraught with danger. Not expecting to have to sign, is worse because it indicates that you have not got any sort of legal advice.

Please be very careful and always keep in the forefront of your mind the answer to that old question, "What do you call a guarantor?" "A fool with a fountain pen."

Over the years I have lost count of the numbers of people financially ruined because they did not know the bleak truth of that answer.

In your case it might be ok to sign as guarantor if you are the only, effective, director but if any other party is going to be responsible for the lease and you are signing just as a guarantor then run the situation past a solicitor.

Better still, if you are thinking of signing as a guarantor for some other person then drop the pen and run like hell.

Thanks TM,

Sorry to hijack the thread, but it came literally as the problem came under my nose. Ihad thought about putting it on here, but didn't know where.

I am planning on getting advice form a solicitor, but have yet to do it, so am after ideas on what's expected and what's not, as i've never been here before.

I am the director of the company (newly formed), with no other interested parties, apart from my soon to be staff.

Regards

Darren

[boatboy50]

I sign no guarantees at all..had a few businesses want me to open aco####s with them..they wanted personal guarantess..told them no way. I am the sole director of a company..a company is a separate legal entity to myself..has its own TFN and pays it own taxes. I will sign on behalf of that legal entity but under no circumstances will I guarantee anything for the company.

Thanks Pinhead,

This is the train of thought I had.

The business is a seperate entity to me, and if it can't pay the bills, good luck getting that kind of money from me alone as an unemployed individual!

I've spoken with the accountant, and know the business inside out, and everything is extremely viable.

I don't understand why I should sign as a guarantour. Commercial real estate is extremely expensive because of the risk. Why should I write off that risk but still pay the high price?

Thanks again for the answers guys. I'm a newbie to this world and appreciate all and any advice.

Regards

Darren

[Dicko]

Whilst the business advice so far is fair comment, besides figures there is more to consider.

Are you prepared for the lifestyle choice ? How are you with people ? Catching fish is one thing, but your personality will leave the biggest impression of the clients the day. (Moreso if you're catching bugger all). You will lose, or build a reputation over this.

Accountants/solicitors etc can be pretty anal when giving advice in these areas, and realistically, this type of set up shouldn't be looked as a pure money making excersise as they will.

There are a dozen reason why this type of business will struggle to ever be a 'large' business. The main reason is your future expansion is limited as you are the business.

If you're comfortable in that and it's more a lifestyle choice that you want to make a living out of, then go for it.

Be realistic with set up cash needed and have a time frame in mind in which you want to be making a dollar or call it quits.

Have a calculated target of your break even point. ie x amount of clients at x dollars. per week.

Have a calculated target like above of where you want to be. i.e sustainable and making a dollar.

These calculations are a bit variable to work out with costs, but you need to do it or you're flying blind.

Buy boat. (you'll own it if it doesn't work out).

The rest you've got to be prepared to lose if it doesn't work out.

Set up cash

Liability Insurance: ring around & find out

Advertising: where are you going to get clients from ?

Good advertising costs big bucks. How much are you going to spend ? Where are you going to spend it ?

Aside from spending money, beat your feet around the tourist info centres and motels intro yourself and leave brochures.

Living costs set aside till you make a dollar ?

Only you can answer that. 1 month ?, 6mths ? 12 mths ?

Can you start part time a few days a week & still do your current job ?

Oh, as someone else said, stay on top of your paperwork. The ATO is ruthless if you owe them a dollar.

You could add heaps more to this but I'm into my third coffee after a few too many bourbons last night and struggling to wake up properly.

[Dantren]

There is no substitute for capital.

Might be a good idea to have a years wages in savings before taking the leap.

Never listen to anyone who says it can't be done.

[Reel Nauti]

Probably the single most important tool to the consideration of any business proposal is the Business Plan. A carefully and HONESTLY constructed plan is your best friend. Every single core expectation is defined in the business plan. You can source formatts etc on line, or you can obtain the assistance of a professional. It is very easy to say 'She'll be right" but I can absolutey and categorically guarantee to you that without a business plan you will struggle.

Secondary, but just as important, is a budget. A forecast or proposed budget for a new venture can be a challenging proposition, but with careful research (as outlined in the business plan) and exagerated expenditures against conservative inputs, you will draw a picture of fiscal direction for your business. The first 2 years is usually the most challenging as you market yourself (also thoroughly described in the business plan) and build your reputation.

Another tip I would give you would be to get used to the jargon of your accountants. It is not their responsibility to communicate in simple speak, it is your responsibility to understand.

Have faith in yourself, be realistic, energetic and cautious. And one more: Pinhead's advice is excellent.

Cheers and good luck to you

Dave

[lampuki]

Yeah, I think i will be taking the leap, but not yet......not realistic at this stage....fuel prices will be something i (and other potntial operators) need to consider...particularly for offshoe fishing

[tigermullet]

Yeah, I think i will be taking the leap, but not yet......not realistic at this stage....fuel prices will be something i (and other potntial operators) need to consider...particularly for offshoe fishing

Very wise!

The most recent disaster I know of was caused by fuel costs and bad weather. Every single charter cost more than it brought in. Meanwhile, the other costs, Marina fees, registration, survey etc., etc., just kept on going. And the boat, motors and gear were depreciating every day.

Long story but it resulted in both husband and wife having nervous breakdowns and, of course, that compounded the problems resulting in a huge loss of capital and loss of their house. Fortunately they had just enough cash left over to buy into a house way out in the country where they will spend their remaining years, until the pension age arrives, trying to recuperate.

As others have said, an exit strategy is absolutely essential. Banks do not give out sympathy nor do they try to enroll the unfortunates in counseling sessions.

We live in a capitalistic free enterprise system which, by its very nature is competitive. In any competition there will be winners and losers. Generally there are more losers than winners in business.

Those who start out without bothering with sound, conservative business plan, professional advice and a full understanding of the commitment of time, effort and financial resources involved need to be slapped silly.

[garman1]

All info so far has been excellent, I had a welding business set up as a sole trader, I wish I had some of the info that has come forward so far. I made headway and had an employee, but I worked hard for my business.

The previous info about attitude is also a massive bonus, I found that the best form of advertising is by word of mouth, giving someone a discount if something wasn't up to their expectations etc can bring in better advertising than having an ad on TV.
Good luck with the new venture, I can only add one other bit of advice ...............

1..But never forget to have a "bit of fun along the way"
2..Run the business............... don't let it run you !!!!!!!!!!!!!!!!!!!!!!!!!!!;)

Sounds easy eh.........but remember those words, trust me

Cheers Garry

[STUIE63]

garman and pinhead have got it nailed get good legal advice and an accountant . have a plan . STAY ON TOP OF THE PAPERWORK . have fun on the way and run the business don't let it run you .
most businesses go broke in the 1-2 year timeframe due to not enough startup capital . or the owner realizing that it just won't generate enough profit .
my business nearly went broke at 2 years because of account customers taking 2-3 months too pay the bigger I got the more I owed . now after 7 years I am over the hump and it is going sweet.
Stuie

[For Steve]

Business plan
Legal advice
Accountants advice
Exit strategy

Also, speak to your local council and tourism organisations. This may help with some of the data needed to prepare your business plan. You're already doing the right thing - seeking others opinions, sharing their experiences and so on.

Operating your own business can be a very rewarding venture. It can also be heart-breaking. If you don't understand something you'll need to either seek advice by paying a professional or perhaps completing a course on the topic. You may also be able to have a job while your business is in it's infancy to keep some money coming in.

You obviously love fishing and you'd like to start a busy where you go fishing. It's a wonderful thing to work doing something you love. Being passionate about it and willing to dedicate yourself to it is the first step. These guys are offering great advice and are not trying to talk you out of it. You NEED to know this stuff and the possible pit-falls and risks. This is what it takes.

Maybe I'll be booking a day out on breamnut's fishing charters one day!

[Getout]

The best thing you can do Breamnut, is to start the new venture in a conservative way. Maintain a survival income with your current job and work your charters on the weekends. Slowly build up the charter business as bookings increase.
Its good to have a fallback if things go pearshaped.

[Dodgy_Back]

Just as getout says start slow and build it up, by the looks of your age you have plenty of time.

I only saw this mentioned a couple of times but as retired small business owner and having spent 3 long years in litigation make sure you have relevant and adequate insurances
Even if you are only doing the odd job you still need insurance.
Without it I would be stoney broke by now.
But if that's your dream to start a charter fishing go and grab it by the horns and get it up and running.

Cheers

Mick

[matt fraser]

Great to have so much free flowing advice! Breamnut - listen to it! It's not easy starting a new business!

Apart from all the business advice, I'd recommend talking to as many other guides for their advice. Perhaps not local ones that you may be competing against, but other guys around the traps. There are many pitfalls which you may not have considered. Do your research and dont rush into anything.

Matt

[Simmo2]

I have a mate up here that owns a charter business.
He wants to sell, but will never recoup the outlay.
He started out his charter business coz he was a keen fisherman, would fish every day if he could.....
Well he did...and 4 years down the track....battling different conditions (people, weather, laws etc ) he is busting to get out of the 'game'.
I would imagine, that my mate could have earnt the same money pumping petrol at McDonalds (sic) 9 to 5 40 a week ....than the hours he put in with two boats running punters out to find fish.....

[tigermullet]

For those expressing a wish to start charter businesses (or other businesses for that matter) the fact that the Royal Bank of Scotland issued yesterday a warning of imminent decline in equity markets around the world might be relevant.

Almost at the same time there was another warning that the Hindenberg omen has popped up again. Briefly, the Hindenberg omen is a chart pattern generally used for stocks listed on the New York Stock Exchange but can serve as a warning for other markets.

Taken together both of these predictions point to tough times ahead for the United Sates, Europe and emerging markets. Australia is not as insulated as many of us would like to think.

The predictions from both, indicate a recession to occur within 120 days but, more ominously, the date of June 20th has been selected by some as the commencement of market turmoil.

I had been clinging to previous time tables which gave until October to get clear.

However, the worst of the message comes from the Royal Bank of Scotland which says that this is now all about financial survival and keeping your job.

Until a couple of days ago the chances of oil rising to $148.30 per barrel or declining to $122 were about equal but we have pushed through the $135 barrier so it seems that higher prices for fuel are about to impact. At $148 the charts will have to re-examined because from there it will be on to to $170 - $180 range or a decline back to the support level of $122 and possibly $100.

Further disturbing news reveals that another wave of mortgage distress is about to hit what was thought of as 'prime' in the United States. Banks are still not showing much willingness to lend to each other for more than one month (mainly European and United State banks) and, even here in Australia, some companies are approaching Hedge funds for credit because it cannot be obtained from normal sources.

Sorry to be so gloomy but it might be a good idea to hold off on plans until October when a clearer picture should emerge. Having lived through a few credit crunches I have seen what damage they can do.

I apologize for being a bit 'off thread' but in a down turn the first thing that goes is the luxury end of the market and fishing charters are probably in that category.

Apart from serious fishers and boaties, hiring a fishing charter will probably be the last thing on peoples minds as they battle for survival.

Please do not take this as financial or business advice. I am not qualified to give that. I'm just a keen observer of economic and financial matters. And I do hope that all of it is wrong and we continue to be the lucky country.;D

[Getout]

Good advice Tigermullet.
Be careful that you don't turn your hobby into work. When that happens, the thing you most love doing can become a chore, especially if you add the pressure of meeting payments, making a living.
I have watched many lifestyle businesses fail because the lifestyle just didn't pay enough to make the business viable

[manchild]

To find out why global crude prices are at historic highs, look no further than Christina Lu and her silver Honda Odyssey. A beneficiary of China's artificially cheap gasoline, she drives as though the world's energy resources are limitless.
"The current price of gasoline has no influence on my use of the car," said the 40-year-old, who works for a foreign company in Beijing.
"The price could even go a bit higher as far as I'm concerned. It would limit the use of cars — there are just too many of them on the streets."
China and other emerging economies have recently accounted for the entire growth in global oil demand as more mature economies have cut consumption.
This is partly expected, since China is in the middle of what looks set to be its sixth year of double-digit economic growth.
But price caps on gasoline and other oil products also play a huge part, insulating China's consumers from the real price of energy.
The nation's oil majors, Sinopec and Petrochina, suffer under price caps as they cannot pass the costs on to their customers. In turn, they get subsidies from the government to cover most of their losses.
Observers see it as a classic example of how government interference covers up the actual state of the market, leaving people with little direct sense of the value of the goods they consume.
"The money is paid from the tax revenue, so people actually wind up paying the same price," said Li Youcheng, an analyst with Hong Yuan Securities.
This is not just China's business. Since it is a power with growing global clout, economic developments such as this have repercussions far beyond its borders.
"A reform in the energy pricing system will not only benefit China itself, but the whole world," the China International Capital Corporation, or CICC, an investment bank, said in a research note.
"The international crude oil price largely depends on China's energy pricing policy, because China accounts for around 40 percent of the increment of global oil consumption."
CICC cited a detailed simulation which showed what would happen if China raises its oil product prices by 50 percent around mid-2008 to put the domestic refining gross profit margin in line with international levels.
Under this scenario, international oil prices would decline to $116 per barrel by the end of 2008, and $95 one year later.
By contrast, if China continues to control domestic oil product prices, international crude oil price will hit 200 dollars per barrel, the CICC's simulation shows.
According to Lin Yixiang, general manager of TX Investment Consulting, the Chinese system has brought about a litany of social ills.
"The measures have led to waste of energy, chaos in the market, queues of consumers, corruption of those in power and losses of producers. Moreover, it has exacerbated the supply shortage and inflation," he said.
"Curbs on energy prices are policies favourable for the rich classes, putting the unprivileged at a disadvantage and endangering social harmony," he said.
However, the government may be reluctant to change, as a rise in the cap on fuel prices could boost inflation, potentially a source of immense public dissatisfaction.
China's consumer price index rose by 7.7 percent last month, easing only slightly from April's 8.5 percent and still hovering near 12-year highs.
"The caps on oil product prices are vital now, because the government is seeking to rein in inflationary expectations," said Hong Yuan Securities' Li.
"The price caps must be removed, but given the concerns about stabilising the economy, it's not workable now."
The question is how much longer the government can afford to subsidise energy use.
As late as 2007, the value of China's direct and indirect subsidies was a manageable 0.9 percent of gross domestic product, lower than the three percent seen in many other economies.
However, if crude oil prices hit $211 per barrel at the end of 2009, the ratio will reach 6.3 percent of gross domestic product, according to the CICC.
This is more than the state can afford, since it is higher than the sum of state-owned enterprise profits and fiscal surplus combined, it said.
"The subsidies are not sustainable in the long term," the CICC said in its research note.
Sorry to be offtopic a little ,but this will make or break many businesses.
George

[tigermullet]

It certainly will make or break businesses. From a consumer viewpoint it would also get worse than not being able to drive boats around. Finding sufficient supplies on the supermarket shelf would also be difficult.

Perhaps the Chinese will rein in their economy and subsidies after the Olympic Games?

I hope so - having a limit put on boating because of high fuel price is bad but going hungry is worse and might even push us to doing some gardening. Yuk.

[BrewGuru]

I read an article about tax and boats a few years back. Basically the conclusion was that the ATO assumes that anyone trying to claim boat related business expenses is having a lend of them. They have very strict rules & evidence requirements. The article advised get detailed advice from a tax expert as the ATO has seen it all before when it comes to blokes buying boats for, er, business purposes.

That's not a reason not to have a go though, good luck with it.

Their was a Tax case only 2-3 years ago where a guy was claiming his boat as a tax deduction, the tax office knocked it back, he took it to the high court and was granted the tax break, the judge saw that owning a boat to entertain clients was no different to having a corporate box at the footy, races or cricket, he won his appeal

[tigermullet]

Manchild, your timing in posting the article about Chinese subsidies for fuel was perfect.

Contrary to all current thinking the Chinese Government increased the cost of fuel for its citizens by 18% overnight. Yippee! It's not known yet how much it will reduce demand but it will help. The oil price per barrel is falling.

This move has taken everyone by surprise - it wasn't expected that such a move would occur prior to the Olympic Games.

Gold moved up $7 almost immediately and the buying is thought to have come from China because the increased cost for fuel will by inflationary for them.

Fingers crossed. Filling up the boat might get a little less expensive.

[Mtx]

ok back on topic maybe?

A proper business plan is essential.

There is the old chestnut to consider.

IF YOU FAIL TO PLAN THEN YOU PLAN TO FAIL.