Fit-for-purpose: business planning for the months ahead
As Australia emerges from lockdown, businesses are now facing the next hurdle.
You’ve got your business strategy sorted, plenty of marketing ideas and your revenue prediction for the next year looks promising. Running a business is exciting – so exciting that it’s easy to forget some of the more mundane but critical aspects like regulatory and legal obligations.
Here, we run through some key risks and requirements facing businesses in Australia today.
All businesses need an Australian business number (ABN) to get started, as well as business name registration if trading under a business name. Registering for GST is also a must once gross income exceeds $75,000.
Depending on the nature of the business, there may also be professional registrations, zoning permits, environmental permissions and other licences you’ll need to obtain. There may also be codes, standards and other regulations that are specific to your industry. Find out more online or by contacting your peak industry body.
No matter what type of service you provide or goods you sell, Australian Consumer Law (ACL) applies, however, note that specific consumer laws apply to organisations providing financial products or services.
These national laws are extensive, covering business conduct, unfair trading practices, consumer guarantees and safety. Per ACL, for example, under the consumer guarantees, when goods are sold to customers they come with a number of guarantees, including that they:
You don’t need a multi-page written contract with signatures to have entered into a binding contract. Contracts can be verbal – and knowing the basics can help avoid any contractual disputes. There are three main elements in any contract:
Employing and managing people can open up big areas of both opportunity and risk. In Australia, there are 10 minimum employment entitlements that must be provided to all employees under the National Employment Standards (NES). These include maximum weekly working hours, requests for flexible working arrangements, parental leave, annual leave and compassionate leave.
An employment contract cannot provide for anything less than what is set out in the NES. There are also penalties for disguising employees as independent contractors (which is sometimes done to avoid the obligations hiring an employee brings) – this is known as sham contracting.
The Privacy Act regulates the way individuals’ personal information is handled.
Organisations with an annual turnover more than $3 million have responsibilities under the Privacy Act, however the Act covers some small businesses, for example where health services are provided
Australia’s Notifiable Data Breach (NDB) scheme under the Privacy Act came into effect on 22 February 2018, and it establishes requirements for entities in responding to data breaches.
The NDB scheme applies to organisations that already have obligations to secure personal information under the Privacy Act 1988. A data breach occurs when:
Those covered by the scheme must notify the Office of the Australian Information Commissioner and those affected by the breach when the data breach is likely to result in serious harm.
While organisations often consider cyber insurance to help cover loss due to fines or other costs if there is a breach, there are also several other areas of risk that are sometimes overlooked:
Certain forms of insurance are compulsory for Australian businesses. Workers’ compensation insurance is mandatory for businesses that employ people, and it may be a contractual requirement. Any business vehicles will need to have third-party personal injury (CTP) insurance.
Of course, there are many other optional forms of insurance that can be helpful to protect your business from various risks. Business interruption or loss of profits, management liability, building and contents, burglary, deterioration of stock, goods in transit, machinery breakdown, public liability insurance, product liability and professional indemnity are some options to consider.
While the regulatory landscape can seem daunting, the risk involved in ignoring your responsibilities is even scarier. There’s plenty of information out there to help you understand your obligations and develop a strategy to manage the risk. Insurance products can also give you that added peace of mind so you can focus on running and managing the business. As your broker/advisor, we’re experienced and well-informed of the insurance protection available to help you manage your business risks.
Article supplied by OneAffiniti
Photo by Tim Gouw on Unsplash