Ok, you got your PR papers, always been keen to run a business, so what next?
Some Key Business Differentials with Singapore
These are some of key notables both positives ands negatives that one must keep in mind thus its entry at the top.
1) Commercial Rentals are way below singapore. Thus start-up costs are relatively much lower.
2) Labour costs are so much higher so labour intensive businesses are less attractive. Not only in terms of wages and statutory payments but in terms of disputes, complaints and wasting time with labour tribunals.
3) As labour costs is high, the positive is running a business when you are the main source is labour is very lucrative ie owner operated such as Hair Dressing Saloon or Barber shop. I know a HK Lady, a single who runs a one man saloon and has managed to educate her kids to Uni, drive a nice car, owns a nice house, all from that business alone.
4) Barriers to business is generally lower and therefore, if it fails, chances of recovering is also high unlike Singapore. Running a takeaway with 2 woks, a fridge, a freezer with a small leased space will come up to less than $10K. Nearly every suburb has available vacancies. The returns are also high.
5) There so many free programs and lessons conducted by various state bodies and also low fee TAFE programs on running businesses that it is a crime not taking it up. Here is a funny part where a singaporean enrolled for a such a program in TAFE but ended up lecturing at TAFE on how to run a business.
6) Lack of critical mass when it comes to walk-in business compared to Singapore. Population in OZ is highly distributed. In Singapore, thousands of people walk pass most shops in an hour compared to tens in OZ. So be careful with location. Take this seriously when choosing a location.
7) In Australia, an employee cannot be restricted to working for only one employer. He can run multiple businesses if it does not affect his employment performance.
Basic Considerations for Running a Business
1) Find an accountant. Absolutely essential and worth every penny if it is the right one. There are so many tax rebates, deductions, incentves and financial incentives and grants for small and medirum businesses that only an accountant can tackle. Talk with the veterans who migrated earlier and are running a business, they can recommend you one that is familiar with Asians. There are also many Asian accountants. The right accountant is one who can do the following
a) Do the business plan to obtain loans from banks.
b) Handle all the licensing and incorporation needs
c) Do due diligence to see if you can achieve positive cash flow etc
d) Handle your taxes.
note: get the wrong accountant and he will screw you.
2) Books - Acquire a book from the local bookstore on how to run a small business. Tips and URLs on various are available.
3)Buying an existing business
Its an OZ trait to run 2 accounting books to reduce the tax burden. 2 books are also used by people to sell underperforming businesses to the unwary. Inflated sales and profits with taxes declared are nothing new. A better way is to sit outside the business and work out the patronage over 2 weeks, taking into consideration the seasonal variations.
Existing businesses are popular, because of customer base and staff. These staff can also train you. Many businesses are prepared to train the new owners as part of the sale price. Some of the common businesses that are popular with asian migrants are News Agencies with Lottery and Restaurants. Never buy a business where the driving force or key ingredient is the original owner such as hair dressing saloons.
Leave your name with Business Brokers if you are keen. Many operate websites and some have catalogues. News Agencies also have Magazines that list busineses that are for sale. Be familiar with terms such as WIWO, price plus SAV.
4) Buying a franchise
Can be nightmare and much of the profits go in the way of royalties and purchase of consumables from the same party. Typically, successful franchise models are expensive and require high capital startup. An accountant is certainly necessary to understand the liabilities and caveats.
5) Financials - Aim for maximum cash flow and not operate with a mindset of throwing tax deductible expenses into the business at every opportunity. I have known migrants who buy expesive cars etc because of tax reasons and load the business with unnecessary costs and then find it difficult to sell it later. Minimise capital outlay and lease where possible especially for new startup who are not sure if it can be a success. There are also many auction houses that regulary dispose of items from failed businesses so do seriously consider 2nd hand items.
6) Approach your Business Banking Manger. This guy has lots of contacts. Many banks now engage Asians to handle asians especially in the cities. Just drop by and talk. They can recommend things that are very different from Singapore.
7) Use temp staff - which carries higher loading but will save you a lot of problems until you are more comfortable handling them. I know of successful business that only work with temp staff.
ps. will add more with time. Others please contribute views/ tips
Some Key Business Differentials with Singapore
These are some of key notables both positives ands negatives that one must keep in mind thus its entry at the top.
1) Commercial Rentals are way below singapore. Thus start-up costs are relatively much lower.
2) Labour costs are so much higher so labour intensive businesses are less attractive. Not only in terms of wages and statutory payments but in terms of disputes, complaints and wasting time with labour tribunals.
3) As labour costs is high, the positive is running a business when you are the main source is labour is very lucrative ie owner operated such as Hair Dressing Saloon or Barber shop. I know a HK Lady, a single who runs a one man saloon and has managed to educate her kids to Uni, drive a nice car, owns a nice house, all from that business alone.
4) Barriers to business is generally lower and therefore, if it fails, chances of recovering is also high unlike Singapore. Running a takeaway with 2 woks, a fridge, a freezer with a small leased space will come up to less than $10K. Nearly every suburb has available vacancies. The returns are also high.
5) There so many free programs and lessons conducted by various state bodies and also low fee TAFE programs on running businesses that it is a crime not taking it up. Here is a funny part where a singaporean enrolled for a such a program in TAFE but ended up lecturing at TAFE on how to run a business.
6) Lack of critical mass when it comes to walk-in business compared to Singapore. Population in OZ is highly distributed. In Singapore, thousands of people walk pass most shops in an hour compared to tens in OZ. So be careful with location. Take this seriously when choosing a location.
7) In Australia, an employee cannot be restricted to working for only one employer. He can run multiple businesses if it does not affect his employment performance.
Basic Considerations for Running a Business
1) Find an accountant. Absolutely essential and worth every penny if it is the right one. There are so many tax rebates, deductions, incentves and financial incentives and grants for small and medirum businesses that only an accountant can tackle. Talk with the veterans who migrated earlier and are running a business, they can recommend you one that is familiar with Asians. There are also many Asian accountants. The right accountant is one who can do the following
a) Do the business plan to obtain loans from banks.
b) Handle all the licensing and incorporation needs
c) Do due diligence to see if you can achieve positive cash flow etc
d) Handle your taxes.
note: get the wrong accountant and he will screw you.
2) Books - Acquire a book from the local bookstore on how to run a small business. Tips and URLs on various are available.
3)Buying an existing business
Its an OZ trait to run 2 accounting books to reduce the tax burden. 2 books are also used by people to sell underperforming businesses to the unwary. Inflated sales and profits with taxes declared are nothing new. A better way is to sit outside the business and work out the patronage over 2 weeks, taking into consideration the seasonal variations.
Existing businesses are popular, because of customer base and staff. These staff can also train you. Many businesses are prepared to train the new owners as part of the sale price. Some of the common businesses that are popular with asian migrants are News Agencies with Lottery and Restaurants. Never buy a business where the driving force or key ingredient is the original owner such as hair dressing saloons.
Leave your name with Business Brokers if you are keen. Many operate websites and some have catalogues. News Agencies also have Magazines that list busineses that are for sale. Be familiar with terms such as WIWO, price plus SAV.
4) Buying a franchise
Can be nightmare and much of the profits go in the way of royalties and purchase of consumables from the same party. Typically, successful franchise models are expensive and require high capital startup. An accountant is certainly necessary to understand the liabilities and caveats.
5) Financials - Aim for maximum cash flow and not operate with a mindset of throwing tax deductible expenses into the business at every opportunity. I have known migrants who buy expesive cars etc because of tax reasons and load the business with unnecessary costs and then find it difficult to sell it later. Minimise capital outlay and lease where possible especially for new startup who are not sure if it can be a success. There are also many auction houses that regulary dispose of items from failed businesses so do seriously consider 2nd hand items.
6) Approach your Business Banking Manger. This guy has lots of contacts. Many banks now engage Asians to handle asians especially in the cities. Just drop by and talk. They can recommend things that are very different from Singapore.
7) Use temp staff - which carries higher loading but will save you a lot of problems until you are more comfortable handling them. I know of successful business that only work with temp staff.
ps. will add more with time. Others please contribute views/ tips
But fortunately, Aussies are in a way more palette friendly.
