Home – New Forums Starting your journey What to do? Small Business or Not

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  • #984468
    Marleisa
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    • Total posts: 1
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    Hi,
    I am looking at purchasing some Scarves from a wholesaler in China.
    I plan to sell them at markets and via a facebook page.
    Do I need to register this as a business?
    Do I need an ABN?
    Could people just pay me through my personal paypal account?
    I am not expecting the turnover to be huge. My first order is only going to be 200 scarves while I see how it goes?
    Thanks, I am totally clueless.

    #1147771
    Damo.s
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    Marleisa, post: 169490 wrote:
    Hi,
    I am looking at purchasing some Scarves from a wholesaler in China.
    I plan to sell them at markets and via a facebook page.
    Do I need to register this as a business?
    Do I need an ABN?
    Could people just pay me through my personal paypal account?
    I am not expecting the turnover to be huge. My first order is only going to be 200 scarves while I see how it goes?
    Thanks, I am totally clueless.

    Hi Marleisa

    Welcome to Flying Solo

    I would suggest checking out this site first http://www.business.gov.au/Howtoguides/thinkingofstartingabusiness/Pages/default.aspx

    I forgot the technical definition for it (Im sure one of the FS pros can charm in) but basically If you intend to make a profit out of your venture then, yes you will need to treat it and run it as a business.

    You need to then figure out what kind of business you will actually have, your liabilities selling scarf’s, tax requirements and all the other nitty gritty stuff. There is a wealth of information here on flying solo and a great community to help you out if you need.

    good luck with it all!

    #1147772
    Anonymous
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    Hi Marleisa,

    I’m not the right person to answer your questions, but I’m sure there’ll be some handy advice for you shortly to add to the comments already made by Damien.

    All the best with it, and thanks for joining the forum,

    Jayne

    #1147773
    tim_davies
    Member
    • Total posts: 54
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    Marleisa, post: 169490 wrote:
    Hi,
    I am looking at purchasing some Scarves from a wholesaler in China.
    I plan to sell them at markets and via a facebook page.
    Do I need to register this as a business?
    Do I need an ABN?
    Could people just pay me through my personal paypal account?
    I am not expecting the turnover to be huge. My first order is only going to be 200 scarves while I see how it goes?
    Thanks, I am totally clueless.
    Hey! Cluesless is fine :) everyone’s there at some point and too often we find our way back there.

    Below is my two cents, grain of salt, so on. Ive done business a bit, but as with anything on this forum, you’d probably want to get advise from appropriately paid professionals!

    I plan to sell them at markets and via a facebook page. Awesome, great way to get started and important feedback. Important to focus on what’s different about you product outside just price. That’s where the real money and growth will be.
    Do I need to register this as a business? Probably. At the start if its going to be under ‘hobby’ threshold you may not. To get an ABN and sole trade business registered is easy and cheap, so there’s no reason why you wouldn’t.
    Do I need an ABN? As above.
    Could people just pay me through my personal paypal account? Whatever you want I guess. How you take payment will determine how you end up reconciling your ‘accounts’ and recording money movements. Focus on making payment as easy as possible for your clients, whatever that is.
    I am not expecting the turnover to be huge. My first order is only going to be 200 scarves while I see how it goes? That’s where it starts! Good to get such low volumes out of your supplier… I’m guessing its rather ‘off the shelf’ stuff to achieve the volumes?

    Approach China with diligence (spoken with vast experieince).
    – Have you recieved samples yet?
    – Have you got margin in your product for the typical 20%+ movement the supplier will stick to you on reorders over the next 6 months?
    – Keep in touch with them, even post order. Developing a relationship with them even at this early stage is important and your Chinese sales person will love to know how you’re going and be kept on the hook.

    Best of luck. I love hearing about people giving things a crack and it certainly sounds like its a great way to start, as low risk as possible.
    Tim

    #1147774
    Kennethti
    Member
    • Total posts: 415
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    Unless your hobby is collecting scarves, then you must register an ABN.

    #1147775
    tim_davies
    Member
    • Total posts: 54
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    Kennethti, post: 169605 wrote:
    Unless your hobby is collecting scarves, then you must register an ABN.
    Hi Kenneth,

    A hobby can include a selling component not just ‘collecting’, as long as that is all it is – a hobby. e.g. ‘My wife sells craft at a market, its her hobby’ BTW – she doesn’t ;)

    You are right thought. In this case it definately ticks too many ‘business’ boxes and sounds like an ABN is required.
    Tim

    #1147776
    JacquiPryor
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    Hi Marleisa

    For what it’s worth, I think you are best to register a business name (unless you will be trading as your own name) and also an ABN.

    There are a few things the ATO consider makes you a business rather than a hobby – including (without limitation) that you have the prospect of profiting; that there is regularity and repeat to your activities (e.g. you plan to regularly sell scarves, and once stock sells out you’ll buy more and continue doing so etc), and, that you would describe what you’re doing as “your business” rather than your hobby. If these things apply then you’ll be entitled to obtain an ABN. You can do this at http://www.abr.gov.au

    If you are going to trade under any name other than your own then by law you must register the business name, even if it was something like “Marleisa’s Scarves” you’d have to register the business name. This really is so there’s a central point/database of who is operating business in Australia. You can do this at http://www.asic.gov.au

    IF you are going to operate as a sole trader (rather than set up a company or trust or separate entity) then you are the legal entity for your business, even if you do register a business name. So, you’d be able to accept payments to any account in your name. Well, realistically you could ask your customers to pay whoever you like. It could look more professional though to have accounts in or linked to the business name that you register.

    Good luck!

    #1147777
    businesstrader
    Member
    • Total posts: 77
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    You definitely need to register an ABN. There is no grey area with your situation.

    You are starting a small business. Period!

    Whether it is successful or not is another question, but according to Australian laws, you must register an ABN.

    You should go and register a domain name too and think positive about your new venture. Good luck with it!

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