Structuring a new business - How to?

Hi Propagate

Some excellent advice on here- structure is important, after winging it on an ABN for years my wife and I had a side business that started to take off, and some time spent intially with a good accountant and solicitor to go Pty Ltd made a huge difference, particularly if you may ever find yourself in any legal trouble. 3 years on and its ticking along very nicely.
Also, if you are doing this type of work for an employer currently check whether there could be any intellectual property/competition issues- have seen people sued when they went out on their own/worked with clients of ex-employer.
If you are still at the early stage of testing the waters try a very lean model quietly on the side of your day job and see how you go- having your own business is a huge mission, and the business plan often needs tweaking- can help to try a lean start up http://theleanstartup.com/ type model before you take the plunge. We work in digital marketing/web design so this was particulalry helpful for us, however the lean principles can be applied to many other business ideas.
Good luck, go for it!
 
That's great, thanks for the link Frito, I'll give a good read.

Yes, the competition/conflict thing is a concern, but not an insurmountable one. Especially if we wait until he decides to officially tell us he is wanting to sell. As far as I'm concerned, once he tells me he is selling up that's as good as him giving me notice, (may not be how the law views it though?).

My partner has an employment law background and works for a large employer association, one of the contract law boffins at her work is going to go through my current contract for me first, see if there is anything in there to worry about.

In my game we are very much boom-bust, going from snowed under to nothing from month to month. Being the size we are, we need medium to large jobs to feed us. We should be able to time it so that we jump when there is a lull in work, then go after the smaller jobs that aren't cost effective to our current company. That should make it harder for him to cry conflict of interest if he can't provide continuity of work and we pick up jobs that he wouldn't ordinarily do?

A lot of the customized items to do with the software I set up myself when I worked as an independent contractor in the UK, most of our current systems are based around what I wrote before I worked for him and brought in with me.

I should point out that, although I kind of like this guy, I would not trust him as far as I could throw him. I worked for him when his last company went under, owing me (along with everyone else) a lot of wages, holidays and unpaid super, that was the second company he was involved with that sank the same way. I stayed on with him to help start up the new company only because there was no one else I wanted to work for and I wasn't ready to go alone at that stage, but I made it quite clear I wasn't happy with how he had operated and I was only there by default, not out of loyalty.

GEERS originally declined to cover our wages and holiday pay based on the director starting up a similar business and 6 of us going to work for him. I successfully appealed, (with an awesome argument if I do say so myself), and two years later we got paid out from GEERS for wages and holidays but he still owes us all a lot of unpaid Super. We'll never see that again and his argument is that he is waiting for the administrators to finally wind the old company up before he looks at "looking after" any of us and paying back at least some of the super out of good will, tousle is, we never make any real profit so there's no money in the pot to pay us back anyway.

I'm not a vindictive person, I wish him no ill will, but there is certainly no loyalty there. I've done OK whilst working for him in the current set up but none of it due to his doing and it's time to stop hiding behind someone else's company and see some of the results of my hard work for myself even if it means the extra stress of my own business.

I won't hang him out to dry, he'll be told of the plans in good time, (unless he pulls the pin and retires/tries to sell the company to s first), which will accelerate things. We'd look to have the legal structure in place beforehand then transition out between projects so he's not left mid-way through anything difficult. He'd still have 4 staff to work on projects, he'd just need to hire a project manager or step up a little if he wanted to carry on making any sort of profit.

I think if we started to ease into it whilst still working that would harm our case if there was any conflicting interest issues. It's a small network of clients that generally know one another, there's no way you could keep even a small start up under wraps.

Cheers.
 
Top