The 10 critical mistakes to avoid when starting a business.

Did you know that around 60% to 70% of new businesses in Australia fail or cease trading within the first three years of commencing?
When setting up a new business there are various alternatives available, here are the main ones. This list is not exhaustive though:

  • Sole Trader
  • Partnership
  • Trust with an individual as Trustee
  • Other entity
  • Pty Ltd company
  • Listed company
  • Other entity subject to the Corporations Act
Avoiding-Insolvency

If or when your business begins to get into trouble, depending on the type of entity you have set up, you will need to talk to somebody experienced in Insolvency matters.

The first group above would generally be administered under the Bankruptcy Act and the second group under the Corporations Act which is some cases protects Directors against personal liability.

How to avoid making the classic mistakes when setting up

  • Research your business market thoroughly
  • Prepare a business plan
  • Make sure you have an ABN
  • Ensure you have enough cash and backup to run it (cashflow)
  • Get legal advice on the structure
  • Keep detailed accounting records
  • Beware of signing “personal guarantees” if you are in a company structure
  • Do not let creditors build up
  • Try not to extend excessive credit
  • Have a life as well

Further to this, what can happen is that if things start going wrong business owners are too optimistic or proud and just think “things will get better!” If things do not get better quickly seek help and advice from someone with the necessary experience. Do not bury you head in the sand. This happens so many times and may be your downfall.

If you need to talk to a specialist or believe you might need some help get in touch today. One of our friendly team would be more than happy to sit down and look at your situations and work through your options with you.

You can reach us direct on (08) 6228 1700 or simply fill out the contact form at and we will be in touch.

Simon Coad,
Turnarounds & Insolvency | Forensic Accounting | Business Revitalisation