July 26, 2021 at 2:39 pm #1229005alwaysinvogueParticipant
- Total posts: 2
I’m a newbie here, and as a long-time PAYG employee, I’m tentatively, but excitedly considering a leap to small business. My friend has had her own business for 10 years, and done a great job of building it to a place where she can invest to grow it to the next level. She will need to invest in a new skillset/service, and I so happen to be an expert in this area. She was the original one who suggested I join her as a partner. However, I have very luckily been a high income earner, and there’s a massive risk to my future earning potential if we don’t successfully grow the business. I know my friend is probably also having concerns about how much of her hard work she might need to share to lure me in. And can she cope with having a partner when she’s been the only “boss” for so long. Nevertheless, we’re both genuinely excited about the potential and think we both believe our complimentary skillsets could see us delivering far more together than operating alone. But I’ve got lots of serious diligence to do.
I know I need some professional advice, but I’m just not sure who/what the profession, or if it’s multiple! I was hoping some of the expertise on this forum might help to steer me in the right direction.
An example of the questions I’m hoping to work through with a professional:
– Helping me draft a proposal for a partnership, including salary and ownership options (if I can’t at least match my PAYG salary, let alone all the bonuses potentially on top, it just doesn’t make sense to leave my job, but also need a partnership agreement that is appealing from my friend who has spent many years building her business up to a solid base – really need some advice on ownership/share options etc)
– Understanding best approach to maximise move from PAYG to business to maximise tax position and not kill my options on buying my future PPOR
– Any other business structure considerations to ensure both my friend and I are protected in the case that disaster strikes, and we find that working together is untenable or something else happens that means we need to dissolve the partnership.
– Recommendation on business structure
– Legal docs drafting
In my dream world, there would be a one-stop shop for advice. Ha! But otherwise, I sort of feel like there might need to be a general business advisor (would be great to have someone who understand retail business), plus an accountant, plus a lawyer?
Any advice would be greatly appreciated, or any pointers on where I could start reading up on all of the above myself would be so welcomed!
Thank you in advance for any help!
ClareJuly 26, 2021 at 3:33 pm #1229011James MillarParticipant
- Total posts: 1,703
Primarily these are within the scope of an accountant with expertise in business accounting and taxation. However, the legal documents will be a by-product of the structure recommended by the accountant (and they will be prepared at the end by a lawyer).
Hope that clarifies for youHelping build better businesses and better lives with expert financial and taxation advice. email@example.com www.360partners.com.au 03 9005 4900July 26, 2021 at 6:08 pm #1229027GeoffParticipant
- Total posts: 3
Hi Alwaysinvogue, Yes that is what accountants are trained to do, they will assist and direct you further. Think of them as part of your team to help you grow. First step maybe a coffee and a chat.July 28, 2021 at 9:01 am #1229087alwaysinvogueParticipant
- Total posts: 2
Thank you so much for the input!!! That’s a great starting point for me to get moving on!August 12, 2021 at 1:51 pm #1230105lisatehParticipant
- Total posts: 1
Congratulations on the new career path Clare! Starting a business is super exciting and it’s great to hear you are looking to get advisors on! Getting some mentors on board from the start will save you a whole lot of time and money. Check out https://www.lisnic.com/ if you are looking for a mentor!August 13, 2021 at 4:35 pm #1230139morganacollinParticipant
- Total posts: 21
Hi Clare! This seems like a very large opportunity and I’m pretty sure I know what’s running through the gears of your head right now. Basically, you’re in a situation where your high pay and income stability are being challenged into something so much more.
Let me just remind you, no one gets rich being employed. Business is where it’s at.
First, I suggest reading this article: https://blog.juro.com/contract-negotiation/ and other similar articles. I agree with the other forum members regarding an accountant, however, this is a partnership. Which will involve legal matters like contracts, a conversation regarding the equity/potential shares in the business, and the like. In other words, you need to consult a lawyer or legal management.
Depending on your relationship with your friend, this can be something you can bring up with them. It seems like neither of you are experts with coming up with an agreement, it’s much better to have a professional mediator that will establish equitable terms for both parties involved.
Hope this helps!
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