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  • #990480
    dragonindustry
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    Hey there,

    I’m jumping into the business world again. I have so many small micro-business style business ideas that this is what I’ve decided to do, and I would love some input and information from you guys if that’s cool.

    I’m going to start a company PTY LTD, and run multiple businesses under that which I am going to streamline and automate as much as possible. So basically I am creating Me Inc, and then running multiple micro-business all also registered business names under the umbrella of me inc. As I build one, I will automate it as much as possible and then move to the next one.

    This is my idea.

    I’m due to see my accountant to make sure this is all good next week and to talk about and learn everything that I will need to know, do you have any thoughts already?

    I have a few questions such as, can I have a single bank account that all the businesses drop there money into? I don’t mind if that mean “Me Inc” will appear on all financial documents.

    If I hire an employee in one of the businesses, such as hiring someone to be CEO of one of the businesses under my umbrella and to basically run it. Or a VA etc… Will I need to then have a separate bank account for that individual business for payroll requirements?

    They are my big questions at the moment, is there anything else that you can think of? Or information that you could share before I go see my accountant so I am more prepared and can ask better questions?

    Thanks for your help :)

    #1177134
    NickKaro
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    Good morning

    They are good questions and quite easy to answer by your accountant.

    What you should also think about is that having all the businesses within one PTY LTD will make each effectively vulnerable to the risks of the other (i.e. no legal separation for creditors, claims, etc.) If you sell one of the businesses you will need to sell it from the company, meaning it will not be eligible to the capital gains tax discount. This compares to each business having a company, meaning you can sell the company and obtain access to the 50% discount.

    Also, give some though (and ask the question) about how the shares in the company should be held (personally/family trust/etc).

    Hopefully this is some food for thought, if you would like another quote for accounting or legal services feel free to get in touch.

    Regards
    Nick

    #1177135
    dragonindustry
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    NickKaro, post: 206265 wrote:
    What you should also think about is that having all the businesses within one PTY LTD will make each effectively vulnerable to the risks of the other (i.e. no legal separation for creditors, claims, etc.) If you sell one of the businesses you will need to sell it from the company, meaning it will not be eligible to the capital gains tax discount. This compares to each business having a company, meaning you can sell the company and obtain access to the 50% discount.

    Interesting, I never thought of any of this. I’m not too worried about all businesses being vulnerable to the risks of the others, as I can’t foresee many risks in the business that I intend on starting that could lead to big problems.

    The selling point is interesting, although I don’t intend on selling the business that I am starting as I want the income they generate more than a large lump sum. But if I was to start a business that I had the intention of building and selling, does this mean it would be a better option to start another pty ltd under the original pty ltd, instead of just starting another business?

    NickKaro, post: 206265 wrote:
    Also, give some though (and ask the question) about how the shares in the company should be held (personally/family trust/etc).

    This will be personally, I’m on my own in this endeavour.

    Also just had another funny hypothetical thought.

    What if in the future I had around 100 very small businesses (for this hypothetical, lets assume that 99% of those businesses have no employees and that I am able to run them myself) running under this one pty ltd. Would that be a complete headache, or at even possible. Would there be a better business structure do to something like this?

    Not that I’m planning on something that ambitious, but its an interesting thought I had.

    #1177136
    bb1
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    dragonindustry, post: 206267 wrote:
    The selling point is interesting, although I don’t intend on selling the business that I am starting as I want the income they generate more than a large lump sum. .

    As part of your planning for any business, you should also look at your exit strategy, true today you may be thinking that you never plan on selling. But in 12 months or 12 years the circumstance may arise where you do want that lump sum, or other life issues overtake you and you need out. Plan your exit strategy at the start and it is so much easier. set you structure up with your exit strategy in mind, and that may include selling the whole, or selling little chunks.

    #1177137
    James Millar
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    dragonindustry, post: 206267 wrote:
    Interesting, I never thought of any of this. I’m not too worried about all businesses being vulnerable to the risks of the others, as I can’t foresee many risks in the business that I intend on starting that could lead to big problems.

    The selling point is interesting, although I don’t intend on selling the business that I am starting as I want the income they generate more than a large lump sum. But if I was to start a business that I had the intention of building and selling, does this mean it would be a better option to start another pty ltd under the original pty ltd, instead of just starting another business?

    This will be personally, I’m on my in the endeavour.

    Also just had another funny hypothetical thought.

    What if in the future I had around 100 very small businesses (for this hypothetical, lets assume that 99% of those businesses have no employees and that I am able to run them myself) running under this one pty ltd. Would that be a complete headache, or at even possible. Would there be a better business structure do to something like this?

    Not that I’m planning on something that ambitious, but its an interesting thought I had.

    If you had several different businesses reporting in the one company (one general ledger, one balance sheet, one profit and loss) then analysing the individual performance of each will be problematic. It can be done with sub accounts and tags but its not simple.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1177138
    dragonindustry
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    bb1, post: 206268 wrote:
    As part of your planning for any business, you should also look at your exit strategy, true today you may be thinking that you never plan on selling. But in 12 months or 12 years the circumstance may arise where you do want that lump sum, or other life issues overtake you and you need out. Plan your exit strategy at the start and it is so much easier. set you structure up with your exit strategy in mind, and that may include selling the whole, or selling little chunks.

    Very true, and I’m going to give this some more thought.

    JamesMillar, post: 206268 wrote:
    If you had several different businesses reporting in the one company (one general ledger, one balance sheet, one profit and loss) then analysing the individual performance of each will be problematic. It can be done with sub accounts and tags but its not simple.

    I realise this, and I think that the fact that everything goes through the one company will benefit me greatly. But you are correct in saying that it is probably going to be a bit of pain when analysing individual business performance, but this is the best structure that I’ve found this concept and am willing to put in the work.

    #1177139
    ThexArm
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    If I understand correctly what you are talking about is multiple revenue streams in one company. All resources in the company used to operate these revenue streams.

    If that is the case, then yes you can do it in one pty ltd. In general ledger you will have multiple products or you may even create brands to track revenue. Just track all expenses together in one GL.

    #1177140
    James Millar
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    dragonindustry, post: 206270 wrote:
    Very true, and I’m going to give this some more thought.

    I realise this, and I think that the fact that everything goes through the one company will benefit me greatly. But you are correct in saying that it is probably going to be a bit of pain when analysing individual business performance, but this is the best structure that I’ve found this concept and am willing to put in the work.

    Its certainly the cheapest and simplest approach and there is not necessarily anything wrong with that. Good luck with it.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1177141
    dragonindustry
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    Hey Guys,

    I was just thinking, and would like some more feedback if possible.

    Basically what I plan on doing is starting lets say 3 online businesses.

    As I talked about above, I’ve been planning on starting a company, and then running those businesses under that company. Registering each business individually, but all the money running back to the company, then paying myself a wage from there.

    But I was just thinking, as the money will probably be slow as I build the businesses up. Is it a better idea to start 1 business as a sole trader. Build it up to an acceptable level, then start another as a sole trader, and build that up to an acceptable level. Then see where I am then, and if I want to create more businesses. Then start a company and put those two straight under it, while I start my third.

    Is this possible?

    Is it possible to run two completely separate businesses as a sole trader, and then change to a company structure and have the company then own those businesses?

    I don’t know just thinking, let me know if you can!

    Thanks,

    #1177142
    NickKaro
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    Possible – yes, make sure you claim a capital gains tax roll-over when transferring the assets to the company.

    A couple of points to consider:

    1. You are effectively taking on all the risk on a personal level and would be personally exposed if the businesses go belly-up.

    2. When the businesses are generating a profit, you will be paying tax at your marginal rate + medicare, hecs, etc.

    3. Depending on the assets at the time of transfer into a company, you will need to consider stamp duty and there will be some logistics around assigning any contracts, domain names, IP and such which would could be avoided if you set it up in a company from the get-go.

    #1177143
    Anonymous
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    Hi dragonindustry,

    I can’t comment on the structural side of things, but do recommend that you start one business at a time.

    You’ll find that each of the ventures needs time and focus, and I think you’ll find it difficult to get any of them to sustainability if your attention is scattered across multiple ventures simultaneously.

    It also means that all the inevitable stumbling blocks will affect only the first business, as you’ll be able to learn from your mistakes with subsequent attempts.

    That’s my 2 cents worth anyway!

    Hope it helps,
    Jayne

    #1177144
    Mischelle
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    Hi Dragonindustry,

    Sounds a lot like my company, I have over 10 brands under my company umbrella, some operate with their own business names, some are just brands.

    Monitoring performance is easy when you make sure you enter the income in your books under each brand/service type.

    FS Concierge’s recommendation of start one at a time is great advice, I tried to start a few at a time, and trust me it will take longer as you will get bogged down in the marketing, planning, design, website, business and service documents etc etc better to get one 99% perfect then start the next.

    Open a PTY LTD company and start from there, add each brand or business under that company as you go. It can get messy if you start out separate as a Sole Trader and then start transferring assets, stock and IP, and don’t forget the amount of work to change all your details with creditors, your website domains, your SSL certificates, banking, etc etc This will take time away from further developing your business.

    This is just my suggestion, it makes life a lot easier, yes there is more paperwork, but when you start earning more get a book keeper to do the main parts of your books. I get one every fortnight, and she also does the BAS monthly, makes my life easier and she can work remotely to save on travel.

    Good luck and congratulations on starting out. :-)

    #1177145
    zeneo
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    This is a great thread, glad I found it. Was about to post same question.

    #1177146
    zeneo
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    Fantastic advice Mischelle, thanks.
    Some questions popped in my mind after reading your post.
    Will do some research before posting them,..if you are still active here.
    Cheers.

    Mischelle, post: 206689, member: 60404 wrote:
    Hi Dragonindustry,

    Sounds a lot like my company, I have over 10 brands under my company umbrella, some operate with their own business names, some are just brands.

    Monitoring performance is easy when you make sure you enter the income in your books under each brand/service type.

    FS Concierge’s recommendation of start one at a time is great advice, I tried to start a few at a time, and trust me it will take longer as you will get bogged down in the marketing, planning, design, website, business and service documents etc etc better to get one 99% perfect then start the next.

    Open a PTY LTD company and start from there, add each brand or business under that company as you go. It can get messy if you start out separate as a Sole Trader and then start transferring assets, stock and IP, and don’t forget the amount of work to change all your details with creditors, your website domains, your SSL certificates, banking, etc etc This will take time away from further developing your business.

    This is just my suggestion, it makes life a lot easier, yes there is more paperwork, but when you start earning more get a book keeper to do the main parts of your books. I get one every fortnight, and she also does the BAS monthly, makes my life easier and she can work remotely to save on travel.

    Good luck and congratulations on starting out. :)

    #1177147
    Mischelle
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    Hi Zeneo,

    Yes still here :) When I am really busy I struggle to get on the forum, but I have been putting time aside each week.

    :)

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