study guide 2 - management & legal v2

1 NOTE: This material is copyright to Webtraining Australia Pty Ltd ABN 64084102810648 and may not be reproduced in any format without the prior licencing and

consent of the owner. The material contained herein is for general knowledge purposes to assist and complement the online flexible learning toolboxes for Certificate 111

Micro Business Operations and Cert IV Small Business Management for the NEIS programme and online delivery.

Study Guide 2

IMPORTANT NOTE: This study guide is to be read in conjunction with the online library and certified content of

A.N.T.A Certificate IV Small Business Management and Certificate III Micro Business Operations online toolboxes

and is used to reference point not as accredited training material

Management and Legal Planning

12.1.2014 v2

Suitable for the following Units of Competency:

BSB40407 Certificate IV Small Business Management

• BSBSMB404A Undertake small business planning

• BSBSMB401A Establish legal and risk management requirements of a small business

BSB30307 Certificate III in Micro Business Operations

• BSBSMB302A Develop a micro business proposal

• BSBSMB306A Plan a home based business

• BSBSMB305A Comply with regulatory, taxation and insurance requirements for the micro

business.

Disclaimer - Important Information

This information has been prepared to provide general information only. It is not intended to take the place of professional

advice and you should not take action on specific issues in reliance on this information. In preparing this information, we did

not take into account the investment objectives, financial situation or particular needs of any particular person.

Before making an investment decision, you need to consider (with or without the assistance of an adviser) whether this

information is appropriate to your needs, objectives and circumstances.

Acknowledgement

Webtraining Australia Pty Ltd acknowledges with kind thanks the permission granted by Rodney Overton – Internationally

published award winning writer of over 40 business publications, in allowing us to reproduce his material contained within for

educational purposes..




TABLE OF CONTENTS

Develop a business proposal 4

What is a Business Plan? 4

Why write a Business Plan? 4

The key elements of a Business Plan include 4

Establish the Scope of the Business Plan 5

GOAL setting 5

Performance Objectives Expected 5

Start-up basics 7

Australian Business Number 7

Tax File Number 7

Goods and Services Tax 7

Business Name Registration 8

Business License Information 10

Business Activity Statement (BAS) 10

PAYG Withholding 11

Superannuation 11

Your tax 11

Income Tax returns 11

Business Structures 12

Sole trader / sole proprietorship 12

Partnership 13

Proprietary Limited company (Pty Ltd) 13

Trusts 14

Personal Guarantees 14

Law of Contract 15

Federal Law 17

Equal Employment Opportunity 17

Freedom of Information 17

Human Rights and Equal Opportunity (HREOC) 17

The Racial Discrimination Act 18

Superannuation Guarantee Levy 18

Anti-Discrimination 18

Workers’ Compensation 18

The Competition and Consumer Act 2010 19

Licences and Permits 20

Business Location 21

Access to customers 21

OH&S and Risk Management 22

Risk Management 22




Incident and Injury Reporting 23

Emergency Procedures 23

Adequate Insurance Coverage 23

OHS Law Obligations 24

Legal Responsibilities 24

For an employer 24

For an employee 24

For a self employed person 24

For a controller 25

Risk Management 25

Offences under OHS Laws 26

Compliance with OH&S Legislation 27

Risk and Emergency Procedures 29

Emergency Procedures 31

Ethics 31

Intellectual Property 32

Business Insurance 33

Public liability 34

Director's & Officer's Liability 35

Workers Compensation 35

Motor Vehicles 35

Fire/Storm/Tempest 36

Stock, Plant & Equipment 37

Business Interruption 37

Burglary 37

Money 38

Glass 38

Product Liability 38

Machinery Breakdown – Computers and Electronic Equipment 39

Fidelity Guarantee 39

Personal sickness and accident 39

Goods in transit 39

Audit & investigation 40

Staffing 40

An Employee Tax File Number Declaration; 40

Superannuation Guarantee Levy 40

PAYG withholding tax for employees 40

Action Plans 40

Contingency Planning 41




Develop a business proposal

What is a Business Plan?

A Business Plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organisation or team attempting to reach those goals. The business goals being attempted may be for-profit or non-profit. For-profit Business Plans stakeholders, particularly financial stakeholders, they typically have detailed information about the organisation or team attempting to reach the goals. In the case of for profit entities, external stakeholders would include investors and customers. External stakeholders of non-profits include donors and the clients of the non-profit's services. Internally focused Business Plans target intermediate goals required to reach the external goals. They may cover the development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a factory or a restructuring of the organisation. An internal Business Plan will often be developed in conjunction with a balanced scorecard or a list of critical success factors. This allows success of the plan to be measured using non-financial measures. Business Plans that identify and target internal goals, but provide only general guidance on how they will be met are called strategic plans. Operational plans describe the goals of an internal organisation, working group or department. Project plans, sometimes known as project frameworks, describe the goals of a particular project. They may also address the project's place within the organisation's larger strategic goals.

Why write a Business Plan?

A good Business Plan will be much more than a set of financial projections and cash flow statements. A good Business Plan will tell the person reading it what the business intends doing – its goals and objectives and explain in detail how it intends doing it. This detail is where many people trying to write a meaningful Business Plan have problems. They cannot articulate how they intend achieving their aims and objectives.

The key elements of a Business Plan include

Executive Summary – (written last as it is a précis of the total plan) Management Plan Marketing Plan Operational Plan




Financial Plan Appendices and Action Plan

Measuring the progress of your business

A Business Plan should be used to measure the progress of your business against the goals, targets and objectives you set for the business. These measurements should be more than just measures of financial performance. A number of key performance indicators (KPI’s) can be used to measure business progress.

Establish the Scope of the Business Plan

State exactly what the project is and what it is intended to achieve - its Objectives The aims, goals and objectives of pursuing the opportunity

GOAL setting

S pecific M easurable A ttainable R ealistic T ime based

Performance Objectives Expected

A profit margin of ..... An annual profit of ..... Return on investment (R.O.I.) of ..... Market share of ..... An average sale of $ ..... Units sold ..... A life span of ..... Create a specific number of jobs ..... Others .....




Start-up basics

Australian Business Number

The New Taxation system was introduced on the 1st July 2000. Part of this change requires a business to have an identifying number or an A.B.N.

A business must register for an Australian Business Number regardless of turnover. if it is carrying on business in Australia. Businesses who do not register for an A.B.N.

will have 46.50% of their invoice total held back in the form of a withholding tax,

when dealing with other businesses.

A business may elect to use a Statement of Supplier form and avoid the withholding tax being deducted provided certain guidelines and conditions are met.

You can apply online to register your Australian Business Number at the following

link. www.abr.business.gov.au.

Tax File Number

Businesses other than a sole trader (i.e., Partnership, Companies and Trusts) need to obtain a tax file number for the business entity. A sole trader will use their individual

tax file number when dealing with the Australian Taxation Office (A.T.O.)

Goods and Services Tax

The Goods and Services Tax (GST) is a 10 per cent tax on the sale of most goods and services.

If your projected turnover for the year exceeds $75,000, you must register for GST. If it is below this figure then registration is optional.

Before deciding not to register for GST consider the following points:




Are your clients registered for GST?

If the answer is yes then you need to consider if they will want to deal with you if you are not registered. If they want you to charge them GST and you want to continue dealing with them, then you should register for GST.

Are you making mainly GST free sales?

If so then you may consider registration on the basis that, although your sales may be GST free, your purchases to run your business may not be. If you are registered you will most likely receive refunds after lodging your business activity statement.

If you are registered for GST, then you must charge GST on all taxable sales and, except for sales under $82.50, (GST inclusive), provide your customer with a tax invoice. If the sale amount is under $82.50 then you are only required to issue one on the customers request.

Business Name Registration

You are required under section 5 of the Business Names Act 1962 to register ANY TRADING NAME that is not your own name. The purpose for registration is to provide a public register from which the identity of persons whom conduct businesses under names other than their own names may be established. It is not for the purpose of protecting names or conferring rights to use a name. Generally the right to use a name (whether a business, product or service) is established by adoption of that name prior to any other person using that name.

You do not need to register if you operate a business venture in your own name.

“Tom Smith”, or “Tom Smith” + descriptor e.g. “Management Consultant”

However you do need to register any other name;

“Tom Smith Management”

or

“Smiths” or

“T. Smith Consultancy”

The name you choose should:

• Create an image for the business

• Inform customers of the nature of the business

• Give your business respectability and




• Differentiate your business from all others

Effective from May 28th 2012 there is a new system

How does it affect new businesses?

You now only need to register for a business name once, instead of having to register your

name in each state and territory you want to operate in. Once your name is registered, it is

registered nationally.

You need to have an Australian Business Number (ABN), or be in the process of applying for

one and not have been refused, in order to apply for a business name.

ABN registrations continue to be free.

How does it affect existing businesses?

You do not need to do anything to transfer your business name to ASIC. Your existing

business name registration has automatically been transferred over into the new system.

The due date for renewing your business name will remain the same.

If you have identical business names currently registered in multiple states and territories,

these identical business names have been transferred over into the new system as a single

registration. You now only need to pay one renewal fee for the name to be registered

nationally, instead of paying for each state and territory. Your renewal will fall due on the

last date of expiration listed on any of your business name registrations.

If you have multiple different business names, or also have a registered company, you are

now able to align the renewal dates for those registrations.

If you have multiple principal places of business across Australia, ASIC will notify you of

which address it intends to use as the principal place of business for sending documents.

You may nominate an alternative address for service through ASIC .

If your business had an identical name as another business operating in another state or

territory, ASIC will provide additional information on the public register to differentiate

affected businesses. This may be the state or territory your business name was first

registered in. This identifier doesn't form part of your business name, but is used to allow

people to distinguish between identical business names on the public register.

I have a company registration, do these changes affect me?

ASIC continues to manage and administer company registrations throughout Australia. If

you also have a business name, or multiple business names registered, you can align the

renewal dates for all of those registrations under the new system.

Before I register a new name, can I check if the name I want is available?




Yes. The new system allows you to search existing business names before progressing with

an application for registration of a new business name. You can see if a business name is

available by using the check business name availability search on the ASIC website, or by

commencing an application to register a business name on ASIC Connect . A series of

automated tests are applied to your query, and you will be notified immediately after your

search if the name you requested is available, unavailable or if it requires further review by

ASIC.

Before registering, you should also check that your proposed name doesn’t already have a

trade mark registered against it.

How much does it cost to register or renew a business name under the new system?

Registering or renewing a business name will cost $30 for one year, or $70 for three years.

Who notifies me when my registration is due for renewal under the new system?

ASIC will notify you - usually within two months of your renewal due date. If your renewal

was due before 28 May 2012, you must pay for the state or territory consumer affairs

agency your business was registered with.

Now that the new system has commenced, who can I contact for information?

ASIC now manages and administers all business name registrations and renewals

throughout Australia.

Business License Information

The Business License Information Service (BLIS) is a free service that provides details of all Licenses you may require to operate your business in Australia, including Commonwealth, State/Territory and Local Government requirements.

Whether you are running a business or thinking of starting one, BLIS will help you to find out easily which licenses and permits you need for that business - or any other activities related to that type of business.

Go to www.bli.net.au

Business Activity Statement (BAS)

You must account for all your sales and purchases on a Business Activity Statement (BAS) every quarter (there are monthly and limited annual options also available).

You may wish to engage the services of a book keeper. Under new legislation they must meet Australian Taxation Office licensing requirements before being allowed to charge for assistance in preparing your Business Activity Statement.




PAYG Withholding

If you have staff, or you are an employee of your own company, then you will be required to register for Pay as You Go Withholding. This is done via the Australian Taxation Office.

It means that you must deduct the appropriate amount of income tax from the wages of your employees and send it to the Australian Taxation Office as part of your reporting.

Superannuation

In most instances, you will be required to pay superannuation on behalf of your employees where their gross monthly wage is $450 or above.

This has to be paid into the fund of your employees choice within 28 days after the end of the quarter e.g. Payments for the June quarter have to be paid to your employee's fund by the 28th of July.

If you do not have employees and run your business as a sole trader or as a

partnership, then you do not have to pay superannuation for yourself as it is based on employees only.

Your tax

If your business is profitable in the first year, chances are you will have to pay tax on these profits as they will be considered income. Your income tax payable is based on the total of your income from all sources. (Including N.E.I.S payments)

It may be advisable to put some money aside towards the payment of your first year's tax.

After you have lodged your first income tax after starting business, the Australian Taxation Office will advise you as to whether or not you must make quarterly contributions towards your next tax bill.

This is called Pay As You Go. (P.A.Y.G.)

Income Tax returns

All individuals and companies that operate a business are required to lodge an annual income tax return. Although these returns can be quite detailed, smaller businesses may be able to prepare their own, provided that are sufficiently confident in doing so.

Most businesses however, engage the services of a registered tax agent. These professionals are generally accountants or solicitors and are the only people permitted by law to charge for the preparation of income tax returns.




If you are unsure, ask the person you are considering using whether they are registered with the Tax Agents Board for the preparation of tax returns.

You can also go to the tax agents board website www.tabd.gov.au to check to see if they are registered.

Even if you engage a registered tax agent to prepare your income tax return you are ultimately responsible for its contents. You are required to sign a declaration on the return, before lodgement, certifying that the content is true and correct.

Heavy penalties apply for providing false or misleading information on the return. It may involve a court appearance or other penalties.

You will also be required to pay any tax that is due to errors on the return.

In order to make preparing your tax return as simple as possible, set aside some time each week to keep your book work up to date.

The benefits of this are twofold,

• you will be able to get a snap shot of how your business is actually performing

• it will cut the cost of accounting services as your book keeper/ accountant will need to spend less time preparing information to go into the relevant returns and statements.

Business Structures

There are four types of structure commonly available to you when you set up your new business. 1. Sole trader / sole proprietorship 2. Partnership 3. A proprietary limited company 4. A trust Each of these structures has advantages and disadvantages, particularly in regard to income tax.

Sole trader / sole proprietorship

An individual may commence a business as a sole trader without any legal formalities. This structure is very easy to start and just as easy to finish with.




If the business runs at a loss in its formative stages, income from another job can be offset against the business, thus reducing income tax. By operating under this structure the owner enjoys all the benefits, but also bears any losses. Any debts assumed by the business are the responsibility of the sole trader. If the business folds with debts, the owner can be sued for these debts, placing their personal assets, including their house, at risk. Income tax on earnings will be assessed at the personal rate - not company rates. The simplicity of sole proprietorships is also their danger. They have no legal existence separate from you, the owner. So any liabilities - tax, legal, and otherwise - that befall the business become your personal liabilities. In other words, if a client sues you for not living up to your contract, or a supplier sues you because you cannot pay, all your personal assets are on the line.

Partnership

A common form of partnership is a husband and wife. A group of people can form a partnership, often with the intention of combining their skills and resources. As a rule debts incurred by the partnership will be shared by all those in the partnership, so that if the partnership folds with debts, all of the partners will be liable for those debts. The act of any one partner can bind and affect all of the partners.

It is a very good idea to have a formal agreement drawn up for partnerships which clearly states the terms of the arrangement. Very few partnerships apart from husband and wife ones, appear to survive and prosper for any length of time. If a partner dies or becomes insane the partnership ceases to exist unless arrangements have been specified in a written agreement. It can be very difficult to transfer partnership interests to others. Income tax on earnings will be assessed at the personal rate - not company rates. This structure may also attract. Legally, partnerships can be nightmares. As a general partner, you are fully responsible for the liabilities incurred by the other partners.

Proprietary Limited company (Pty Ltd)

This type of structure is favoured by most experienced business operators. Shares are issued and purchased by the shareholders of the company. It offers some protection from creditors - limited liability - in the event of the business folding and the taxation rate for this structure is lower than the personal tax rate.




A proprietary limited company is a legal arrangement whereby the business is treated in law as being separate from the owners. Because of the spate of business failures in recent years many organisations require personal guarantees from the directors of proprietary limited companies, thus negating some of the benefits which this type of structure once offered. In the event of the business being sold the shares in the business are simply transferred o the new owners. This type of company structure can trade for an indefinite period of time and need not be affected by the death or departure of its members. Proprietary limited companies are required to hold an Annual General Meeting and lodge returns every year (for which they pay a fee) with the Australian Securities Commission. Proprietary limited companies, are formed when investors transfer money or other assets for shares. They are required to pay income taxes separate from those paid by the investors. The income and deduction rules that apply to individuals generally apply to corporations.

Trusts The term family trust refers to a discretionary trust set up to hold a family's assets or to

conduct a family business. Generally, they are established for asset protection or tax

purposes.

An Australian family trust is generally established by a family member for the benefit of members of the 'family group';

• can be the subject of a family trust election which provides it with certain tax

advantages, provided that the trust passes the family control test and makes

distributions of trust income only to beneficiaries of the trust who are within the 'family

group';

• can assist in protecting the family group's assets from the liabilities of one or more of

the family members (for instance, in the event of a family member's bankruptcy or

insolvency);

• provides a mechanism to pass family assets to future generations; and

• can provide a means of accessing favourable taxation treatment by ensuring all family

members use their income tax "tax-free thresholds".

A family trust has many other potential benefits, including avoiding issues such as

challenges to the will following a death of a senior member of the family.

Personal Guarantees

Banks and finance companies usually require directors of businesses sign personal




guarantees for property leases and equipment which is leased or bought under hire purchase. Some suppliers may even require a personal guarantee from people starting a new business. Many people in business sign personal guarantees for a diverse range of things from motor cars, computers, sophisticated business equipment and air conditioning plant. If the business entity is unable to pay its accounts the finance company will the pursue the person who signed the guarantee. Whenpursuing payment of the guarantee the finance company could go as far as taking bankruptcy proceedings. In the case of a leased building or office space it may take up to a year or even longer to find a new tenant, during which time the person signing the guarantee will be liable for the performance of the lease. Invariably most equipment covered by personal guarantee fails to sell at a price close to the amount outstanding and the finance company looks to the person who signed the guarantee for the balance. In the case of air conditioning plant which is fixed to building, usually on the roof, trying to sell this to recover money is virtually impossible. The new tenant, when one is found, is in a powerful bargaining position and can even refuse to take on the air conditioning. A number of well known former Australian entrepreneurs contribute part of their financial woes to signing personal guarantees. Many suppliers to industries such as the building trade insist upon personal guarantees from their customers due to the ‘boom or bust’ nature of the industry.

Law of Contract

Small business managers should be aware that most of their day-to-day transactions will ultimately be covered by the Law of Contract. There are six essential elements that must be present for a contract to be considered valid. The parties must have intended to create a legal relationship, rather than simply a domestic or social one. Agreement must be reached through an offer by one party and the acceptance of the offer by another party. Both an offer and an acceptance must be present to form the second essential element of agreement. Consideration must be present, unless the contract is a formal one, in which case the form replaces the need for consideration. Consideration is something of value passing from one party to another in return for a promise to do something. The parties to the contract must have the legal capacity to enter into a contract. Capacity refers to one’s recognised ability under the law. The parties to the contract must have given their genuine consent to proceed as agreed in the contract. Circumstances could arise where one of the parties has been forced by circumstances to proceed with a contractual arrangement without really




giving full consent. Although intention and consent both consider the thought processes of a person, they are two distinct elements. Intention is related to whether the agreement was meant to be legally binding, and consent deals with a person’s free will agreement.

The object of the contract must be a legal one for the rights to be enforceable. If the parties contract to enter into an activity that is illegal, then the contractual arrangement will not be valid. A valid contract is an agreement made between two or more parties whereby legal rights and obligations are created which the law will enforce. The main purpose of the law of contract is to establish under what circumstances a person is legally bound by promises made. In order to determine when a person is bound by a promise made, the essential elements of a valid contract must be present.

There are six essential elements that must be present for a contract to be

considered valid. 1. The parties must have intended to create a legal relationship, rather than simply a domestic or social one. 2. Agreement must be reached through an offer by one party and the

acceptance of the offer by another party. Both an offer and an acceptance must be present to form the second essential element of agreement. 3. Consideration must be present, unless the contract is a formal one, in which case the form replaces the need for consideration. Consideration is something of value passing from one party to another in return for a promise to do something. 4. The parties to the contract must have the legal capacity to enter into a contract. Capacity refers to one’s recognised ability under the law. 5. The parties to the contract must have given their genuine consent to proceed as agreed in the contract. Circumstances could arise where one of the parties has been forced by circumstances to proceed with a contractual arrangement without really giving full consent. Although intention and consent both consider the thought processes of a person, they are two distinct elements. Intention is related to whether the agreement was meant to be legally binding, and consent deals with a person’s free will agreement. 6. The object of the contract must be a legal purpose one for the rights to be enforceable. If the parties contract to enter into an activity that is illegal, then the contractual arrangement will not be valid.




Federal Law

Equal Employment Opportunity

Equal opportunity legislation is aimed at ensuring that persons are judged on their merits instead of on irrelevant characteristics. The legislation is focused primarily on the workplace and takes two forms. 1. Pro-active affirmative action legislation, with an aim of opening up employment and advancement for groups which have generally been denied opportunities in the work place. 2. Reactive anti-discrimination legislation, aimed at providing remedies for persons who have been discriminated against, primarily in the workplace. Discrimination occurs where persons are treated less favourably than others in the same situation because of a characteristic, such as their race or sexual preference, which is irrelevant to their capacity to perform a task. The main workplace activities affected by the anti-discrimination provisions are conditions of employment, promotions, dismissals, advertising, union membership, training and accommodation. Some types of employment are exempt from the legislation, including small businesses, private schools, and domestic employment.

Freedom of Information

The Freedom of Information Act 1982 (FOI) gives everyone a right of access to documents held by federal government agencies, subject to certain exemptions. Any person, which includes persons resident in Australia or abroad, whether or not they are Australian citizens, companies, prisoners or children may make a request for information under The Freedom of Information Act. Lodging a F.O.I. request: a request for a document must be in writing, be accompanied by an application fee (if applicable) and provide such information concerning the document requested as is reasonably necessary to enable the agency to identify the document.

Human Rights and Equal Opportunity (HREOC)

The HREOC administers federal legislation in the area of human rights, antidiscrimination, social justice and privacy. This includes complaint handling, public inquiries, policy development and education and training. Agreements have been made with some state governments for the concurrent administration of state and federal anti-discrimination legislation. HREOC's complaint




handling powers have been delegated to Equal Opportunity Commissioners in order to seek to improve the quality of, and accessibility to, complaint handling services. The major areas covered by the Commission are: • Aboriginal and Torres Strait Islander social justice • Privacy • Disability discrimination • Human rights • Sex discrimination • Race discrimination The Commission investigates alleged infringements under the three anti-discrimination laws and privacy legislation and attempts to resolve these matters through conciliation where this is considered appropriate. Where conciliation is unsuccessful or inappropriate, matters may be referred for formal hearing by Hearing Commissioners. Upon further inquiry, determinations are made to resolve these matters. Under the Human Rights and Equal Opportunity Commission Act 1986 the Commission inquires into acts or practices that may infringe other human rights or that may otherwise be discriminatory.

The Racial Discrimination Act

helps make sure people are not treated less favourably in certain areas of public life because of their race, colour, descent or national or ethnic origin. It is unlawful to treat people less favourably because of their race in (among others): their place of work, the supply of goods and services.

Superannuation Guarantee Levy

The Superannuation Guarantee Charge Act requires most employers to make minimum superannuation contributions for eligible employees to a complying superannuation fund.

Anti-Discrimination

Legislation in this regard varies from state to state but generally covers discrimination against, race, ethnic origin, colour, sex, marital status, family responsibilities, pregnancy, political belief, religious belief, sexual harassment, disability (physical or intellectual), age and sexual preference.

Workers’ Compensation

Work Cover is the term used to describe the Workers’ Compensation system in NSW (similar schemes exist in other states). Proponents of the scheme claim that it represents a comprehensive approach to Compensation, Occupational Health, Safety and Rehabilitation in the workplace. Workers’ Compensation is a range of benefits available to workers who suffer an injury or illness associated with work and can include: • Weekly wages • Medical expenses • Hospital and related expenses




• Rehabilitation services • Lump sum payments in the case of permanent disability or death. Regardless of whether you employ one or more full-time, casual or even part-time employees, you are required to maintain a current Workers’ Compensation policy. It is an offence to dismiss an employee because of incapacity within six months of an injury, unless there is medical evidence that the worker will be permanently unfit for pre-injury duties.

The Competition and Consumer Act 2010

The Competition and Consumer Act 2010 is an act of the Parliament of Australia. On 1 January 2011 the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010. The act provides for protection of consumers and prevents some restrictive trade practices of companies. It is the key competition law in Australia. It is administered by the Australian Competition and Consumer Commission and also gives some rights for private action. The Trade Practices Act is administered by the Trade Practices Commission (TPC). The Trade Practices Act (TPA) - is meant to prevent anti-competitive business practices. The basis of the TPA is the belief that, if there is genuine rivalry between competitors and if powerful companies do not abuse their market power, the result for consumers will be lower prices and better quality. In pursuit of this the TPA makes some business activities illegal. The TPA catches written and verbal contracts, and also mere arrangements or understandings [i.e., where no promises are exchanged]. Therefore, a nod of the head or a friendly, no-obligation arrangement could constitute an ‘arrangement’ or ‘understanding’. Some prohibited business activities under the TPA include: • Arrangements involving competitors which limits or prevents access to goods or services. • Competitors discussing price fixing. • Boycotts between competitors - e.g. an agreement between an oil company and a group of operators that the oil company will not supply a discounter. • Eliminating or damaging a competitor. • Preventing the entry of potential competitors into a market • Deterring competitive conduct. • Abuse of market power - e.g. deliberately pricing at an uneconomic low level to eliminate a competitor. • Misleading and deceptive conduct. e.g. false representation about products. • Unjust or unfair conduct - e.g. to obtain a signature on a blank contract.




• Exclusive dealing - e.g. A powerful supplier insisting the customer does not stock competitors’ products. • Price discrimination - e.g. discriminatory for no acceptable reason. • Resale price maintenance - preventing products being resold below a minimum price, which is specified by the supplier to the customer. • Third line forcing - supplying products on the condition that the customer acquires other products from a third person nominated by the supplier. e.g. forcing the buyer of a motor car to insure with a third party nominated by the supplier.

Refusal to supply

Some valid reasons to [independently] refuse to supply a new customer are: 1. Your existing network is satisfactory [subject to other issues, though]. 2. The customer has a bad credit history. 3. The customer uses unsatisfactory business methods. 4. It is not profitable to supply the customer. 5. You do not have the capacity to supply the customer. You cannot refuse to supply a customer if you know the customer plans to discount your product below a price you make known. Recommended price lists Issued by trade associations to their members are viewed suspiciously by the TPC, on the grounds that the lists might be attempts to enforce uniform prices amongst members. Buying groups where buyers get together to make group purchases at fixed prices is acceptable, so long as the group does not also arrange the selling price of those goods. Consumer protection exists in relation to: • Packaging and labelling. • Use by dates • Rates of interest for credit transactions • Cooling off periods Safety regulations exist for products such as:

• Motor cars • Drugs • Toys • Textiles • Food stuffs • Bath foams • Baby walkers

Licences and Permits

There are permit and licencing requirements for a range of business related matters

and professions, including:

• Discharge of Waste;

• Environmental protection




• Gas, electricity and water

• Health regulations

• Industrial awards (relating to staff)

• Leases

• Occupational Health & Safety

• Advertising and signage

• Telephones

• Trading hours

• Weights & Measures

• Zoning

• Market permits

• Parking permits

• Home Based Business (Some Councils and Shires require formal approval)

• Licences to operate vehicles and machinery

• Working at heights

• White card, green card for construction site access

• Trade association registrations e.g. electrical trade’s license, .. just to name a

few

Business Location

Access to customers

Will the customer come to you or do you have to go to them? It's an important

question that will help to determine the best location for your business and the types

of transport and storage, with their associated costs. This part of your business plan

should provide the rationale for your location and the way you choose to get your

goods and services to customers.

Tenancy

If you are leasing a premises to run your business from, you will nin most cases need to

arrange a commercial lease.

We strongly recommend you seek independent legal advice prior to signing and

documentation.

Key areas to consider would be;

Term;

• Is it suitable for your intentions?

• Can you take a short period and have renewal options included

• Is the bond fair and who is it paid to?




• What are rents on similar properties?

• Do you have an opt out clause or are you locked in?

• Is the rent subject to CPI?

Alternate locations

If the business grows, can the premises cater for your expansion? If not, have to an

alternate property you may be able to move in to. If the landlord decides not to renew your

lease, how will that affect your business?

Home Based Businesses

Home based businesses are more and more common these days with access to the internet, VOIP and instant communications.

Most shires or councils will permit a room to be used to run a small business but they have rules on traffic visiting the property, parking, signage restrictions and more.

Before you start up your home based business, please check with your local government as to any restrictions that could stop you from operating at home.

IMPORTANT NOTE: IF YOU ARE RUNNING A HOME BASED BUSINESS, IT IS VITAL

THAT YOU ADVISE YOUR INSURER THAT YOU ARE RUNNING YOUR BUSINESS FROM HOME

AS BUSINESS EQUIPMENT AND PUBLIC RISK MAY NOT BE COVERED UNDER YOUR

DOMESTIC POLICY.

OH&S and Risk Management

Risk Management Businesses should implement a compliance plan in all areas and activities associated with

the operations of the business.

A business official should be appointed to have primary responsibility for compliance

monitoring and reporting to the Risk Management committee.

Risk Management Approach to Occupational Health & Safety




All businesses should ensure that the business acts in accordance with Occupational Health

& Safety legislation demonstrated by:

Documented safety policies and procedures that are readily accessible, current and

reviewed regularly.

Adopting, documenting and implementing a risk management approach of identifying site

hazards, assessing risks and having appropriate control measures in place, in accordance

with risk management hierarchy of controls.

Ensuring staff are trained and competent so that they can carry out their work in as safe

and skilful manner

Incident and Injury Reporting All businesses should ensure that they have a procedure in place to report and record detail

of injuries, incidents and near misses so that the business can carry out investigations to

identify contributing factors and to prevent recurrence.

Emergency Procedures All businesses should ensure that they have in place plans and capabilities to deal with

emergency situations in a manner that ensures the safety of employees, participants,

visitors and contractors. All businesses should also provide appropriate first-aid and facilities.

Adequate Insurance Coverage All Businesses should be able to demonstrate that they have adequate insurance cover in

respect of the following matters as evidenced by a Certificate of Coverage from a recognised

insurer:

Public liability insurance,

Workers' compensation insurance,

Compulsory third part insurance ('green slip'),

Third party property insurance, and business building and contents insurance.

Other insurances that may be appropriate to the business

Risk and Emergency Procedures




OHS Law Obligations

Legal Responsibilities The Occupational Health and Safety Act 2000 (NSW) and the OHS Regulations 2001 (the

OHS Laws) are the key pieces of legislation in NSW dealing with occupational health and

safety. The OHS Laws apply to employers, employees, those that are self employed, those

who are in control of premises, plant and substances and those who design, manufacture

and supply plant and substances for use at work.

Most businesses employ employees from time to time who work at the businesses premises

that are either owned or leased from third parties. Accordingly, for the purposes of OHS

Laws, your business will be considered to be an "employer" and "in control" of premises.

Your Obligations under the OHS Laws. Key obligations under OHS Laws can be

summarised as:

For an employer Under OHS Laws, an employer should ensure health, safety and welfare at work for all the

employees of the employer. In addition, an employer should ensure that people other than

employees, such as contractors and visitor, are not exposed to risks to their health or safety

arising from the conduct of the employer's undertaking while they are at to the employer's

place of work.

For an employee An employee should, while at work, take reasonable care for the health and safety of people

who are at the employee's place of work. This includes fellow employees as well as

contractors and visitors. In addition, an employee is under an obligation to cooperate with

his or her employer to enable the employer to comply with any requirement under OHS

Laws.

For a self employed person A self-employed person should ensure that people are not exposed to risks to their health

and safety arising from the conduct of the person's undertaking while at work.




For a controller Under OHS Laws, a person who is in control of premises, plant or substances used by

people at work, should ensure that the premises, plant and substances are safe and

without risks to health.

For a person to be "in control", the person need only exercise limited control of the

premises, plant or substances. A person "in control" also includes a person who under a

contract or lease has an obligation to maintain or repair the premises, plant or substances.

.

For a designer, manufacturer and supplier

A person, who designs, manufactures or supplies any plant or substance for use by people

at work should ensure that the plant or substance is safe and without risks to health when

properly used. The designer, manufacturer or supplier should also provide adequate

information about the plant or substances to the person to whom it is supplied to ensure its

safe use.

Risk Management OHS Laws require employers and others (such as controllers of premises) to undertake risk

management. This means that, for example. Businesses should identify hazards, assess

risks, eliminate or control such risks and then review and audit.

Consultation. OHS Laws require employers to consult with employees in relation to any

decisions affecting their health, safety and welfare at work. OHS Laws set out how

consultation is to take place.

Notification. OHS Laws require employers and other specified parties to notify WorkCover

of certain incidents within a set time frame.

Other. OHS Laws also contain provisions dealing with a number of other matters including

work premises and work environment, plant, hazardous substances and processes,

construction work, licences and permits.




Offences under OHS Laws Obligations on businesses under OHS Laws are in the nature of "Strict Liability" obligations,

that is, they do not require proof of any mental element (such as wilfulness or negligence)

on the part of the business.

In addition to employers and controllers of work premises, employees, directors (Board

Members) and persons concerned in the management of a corporation may also be

prosecuted for offences under OHS Laws.

Unless the person prosecuted for an alleged breach of OHS Laws can prove one of the

defences under the OHS Laws, then the offence will be made out and the person will be

convicted.

Defences under the OHS Laws for a corporation are:

It was not reasonably practicable to comply with the provision; or

The offence was due to causes over which the person had no control and against the

happening of which it was impracticable for the person to make provision. In addition, a

director (Board Member) or person concerned in the management of the corporation has

two further defences available, namely:

He or she was not in a position to influence the conduct of the corporation in relation to

the contravention; or Being in such a position, he or she used all due diligence to prevent

the contravention by the corporation.

A prosecution by WorkCover for offences under OHS Laws may be instituted within 2 years

after the offence or, generally speaking, where a coronial inquest has been held, it can be 2

years from the date of the coronial inquest.

Prosecutions under OHS Laws are criminal prosecutions. The financial penalties which may

be imposed for a breach of OHS Laws can be significant. For a corporation the fines can be

up to $550,000 for a first offence and $825,000 for those with a prior conviction under the

Act. For individuals the fines can be up to $55,000 for a first offence or for those with a prior

conviction, $82,500 and imprisonment for two years or

both.

Other Liability

In addition to liability under OHS Laws, businesses may also be exposed to civil liability in

relation to incidents that may occur at your tracks, for example, claims in negligence.




Different obligations and standards of proof apply in relation to civil claims.

Compliance with OH&S Legislation Risk Management Approach to Occupational Health & Safety

All businesses should ensure that the Business acts in accordance with Occupational Health

& Safety legislation demonstrated by:

Documented safety policies and procedures that are readily accessible, current and

reviewed regularly.

Adopting, documenting and implementing a risk management approach of identifying site

hazards, assessing risks and having appropriate control measures in place, in accordance

with risk management hierarchy of controls.

Ensuring staff are trained and competent so that they can carry out their work in as safe

and skilful manner

You, your employees and contractors are obliged to comply with specific regulatory

requirements, to protect the health and safety of all personnel and the general public.

Documents may be in the form of manuals or in an electronic format. Businesses should

assign someone to maintain this documentation to ensure that it is current and complete.

You should manage your worksite by identifying hazards, assessing the risks and

have methods to control them.




Risk and Emergency Procedures

9 –




Emergency Procedures Identify emergency situations and document procedures for managing emergencies. Your

procedures should consider handling injuries, health conditions and civil disruptions such as

sabotage, terrorism and protests.

Ethics

It should go without saying that anyone starting a small business will observe the highest ethical standards at all times.




Keeping promises, being honest, showing absolute integrity, honouring agreements and contracts are just a few ethical issues which concern small business proprietors. Despite this the courts are clogged with claims relating to ethical dealings (or lack of ethical conduct) in business.

Television programs fill many hours each year with footage of unethical dealings which leave many innocent people in dire straits. In order to ensure high levels of ethics many public companies spend considerable time and effort in ensuring and reporting high standards of corporate governance.

Intellectual Property

Intellectual property can be a valuable asset and should be addressed in the Business Plan. Intellectual property may require a special strategy of its own to ensure that each element is given the appropriate care and attention. When writing your Business Plan be sure to include a reference to any Intellectual Property the business owns, and how this may affect the performance of the business Your business may own Intellectual Property in respect of books, drawings or computer programs which can be easily overlooked. Many businesses have developed products which appear to offer considerable advantage to that business if the Intellectual Property Rights were pursued. Intellectual property could be: • A patent that represents a new product line or forms the basis of further research. • A trade mark that underwrites marketing efforts. • Any type of intellectual property which could form the basis for a new partnership. • Copyright of books and articles, (this is managed by the Attorney General’s Department). • Plant Breeding Rights (P.B.R.) which are covered by the Department of Primary Industries and Energy. When writing your Business Plan you should take stock of everything that has been created and that is essential to your company. This should include the business name and logo, new ideas, new services, new products, new manufacturing techniques, promotional material, videos, and the outcomes of research and development. In Australia the Australian Industrial Property Organisation (AIPO) offers a range of products for the protection of intellectual property. Patents protect inventions, that is, a new or improved product or process.




Registered trade marks protect words, symbols or pictures, or a combination of these, and they distinguish the goods and services of one trader from those of another. Registered designs protect artistic and literary works, such as books, paintings and music, but also protect computer programs and engineering drawings (this protection is automatic and does not need to be applied for). Plant breeders rights (PBR) protect new plant varieties. Circuit layout rights protect the three-dimensional configuration of electronic circuits and layout designs (this protection is automatic and does not need to be applied for). Trade secrets protect trade know-how and other confidential information.

Business Insurance

There are only three categories of risk

1. Assets

2. Debt

3. People

Insurance is another means of commercial risk management. There are various types of

insurances available to cover against particular risks.

At a minimum, when considering an insurance policy, businesses should look for:

• Scope/ extent of cover (check the carve-outs and exceptions)

• Amount of cover (check the payout caps)

• Excess amounts payable by the business

• Term/ duration of the policy

To help you decide what to insure, conduct a risk audit and grade your risks under those

that are critical, important and minor.

Questions to ask yourself as part of a risk audit include:

• How likely is the insured event?

• How does the cost compare to the risk?




• How can the risk be minimised?

• What is the potential loss?

Consider self insurance – what are the risks you will take on yourself, and what are the risks

you can allocate through contract (eg with trading terms). This will enable you to save on

premiums.

Public liability

This is a very important policy, as it covers liability arising out of the operation of your business.

For example, if a customer comes into your office, sat on a chair and it collapsed under them, then they could take legal action against you for any injuries and trauma suffered.

The policy is generally in two parts, being public liability (as in the previous example), and products liability or goods sold. As the name implies, this covers your liability if a product that you sell leads to a person being injured. Food shops are a good example of this. If a shop sells a batch of “bad” food, then action could be taken against them for subsequent injuries.

The main rating factors are the occupation, the sum insured (or limit of liability), the annual income of the business, the number of staff, and previous claims statistics for the type of business.

Higher risk = Higher premium

Professional Indemnity:

This policy covers losses arising from negligent or incorrect advice. In the past it has generally been affected by solicitors, insurance brokers, accountants and the like, but is nowadays also being bought by occupations such as tradesmen and mechanics.

Taking the insurance broking industry, if for example we told an insured that $5,000,000 public liability cover would be enough and they were sued for $10,000,000 by an injured third party, then the insured could sue the insurance broker for providing negligent advice.

The rating factors include issues such as:

• Occupation

• Amount of cover required (limit of liability)

• Previous claims history

• Industry type

• Age of applicants

• Time involved in the business




Director's & Officer's Liability

Directors and officers of businesses are becoming increasingly put under the spot light with

claims often being brought against them.

Claims may be bought against them by shareholders, regulators such as Australian

Securities commission, Trade Practices Commission, competitors (arising from unfair trading

practices) etc. Customers might also bring action for misleading conduct, or employees may

take action for unfair dismissal, breach of equal opportunity requirements, or harassment in

the workplace.

Workers Compensation

(Compulsory cover for company directors and employees)

If the business has any employees, by law a Worker’s Compensation Policy must be in place.

There are 3 main rating factors; the occupation, wage roll, and claims history.

As in other classes of insurance, the higher the likelihood of a claim, the higher the rate. An

office risk would pay a rate of around 1.0% of wages, a retail shop around 1.5%, a butcher

shop around 4-5%; a saw miller would pay around 15%, while a logging business would pay

a 20-25% rate.

A further discount may also be applied if the insured has a good claim record, and a

discount may be allowed if there is an occupational health and safety system in place.

A workers compensation policy is an adjustable one, whereby an estimate is made at the

beginning of the insurance period as to the likely wage roll, and then a declaration is made

at the end of the year detailing what the actual wages were. If the wages paid were lower

than the estimate, then a refund is allowed, alternatively if more wages were paid than the

original estimate an extra premium will be required.

Under the current workers compensation legislation, the insured must bear the first $200 (in

most cases -please consult your advisor) of any medical expenses relating to a claim,

together with the first 5 days of any compensation due. Some pressure is being exerted on

the politicians to review these excesses, although the removal of them may well lead to an

increase in premiums!

Motor Vehicles

A business also needs to insure its motor vehicles. The policy should also include third party property damage, which will cover damage that may be caused to another vehicle or property through the insured’s negligence.

The premium depends on the type of vehicle, the use of the vehicle, the age of the main driver, and the previous insurance history. For example, a 20 year driver driving a company owned 201X Commodore will pay a higher premium (and excess) than a 40 year old driving a similar vehicle.

For commercial vehicles such as trucks, it is normal practice to insure them for a sum insured which should reflect the vehicle’s market value. Co-insurance applies to these sorts of vehicles (similar to a fire policy) so it is important to ensure that the sum insured reflects




the true market value, If for example a $100,000 truck was insured for $50,000 then only half the vehicle is insured. In the event of a $10,000 claim the insurer will pay $5,000 and the insured will need to fund the remaining $5,000.

Fire/Storm/Tempest

This covers the physical assets of the business against perils such as fire, lighting, explosion,

storm and tempest, malicious damage, rainwater, impact (by vehicles, trees etc).

The assets would include plant and machinery, computers, phones, stock for re-sale,

general contents, stationery, manuals and the like. If the building is owned by the insured,

then that would be insured under a fire policy as well.

Firstly in the event of a claim, the policy normally pays for the damaged item to be

replaced, therefore when determining the sum insured it is necessary to ascertain the actual

replacement value and not the actual purchase price of the items. For example, a second

desk may have purchased originally for $150, but its replacement cost could be $500. The

$500 is the figure that is used in calculating the sum insured.

It is good idea to make a list of all the items the business owns, note the price paid for the

items, and hazard a guess at what the actual replacement cost would be.

Once the value has been agreed, this then becomes the sum insured for the policy and is

the first rating factor to determine the premium.

The second rating factor is the actual nature or occupation of the business. For example, a

computer consulting business is far less likely to sustain a fire than a joinery workshop or a

panel beaters workshop, and accordingly the rate applied to the sum insured for the

consulting business would be much less than the two workshops.

The third rating factor is the location of the premises in which the business is operating.

For example, if the business is situated in a multi storey office complex located next to the

fire station, the risk of fire is less than if the business was located in an industrial estate

surrounded by welding factories or furl depots and with the nearest fire brigade 20 minutes

away.

The fourth rating factor is the construction of the premised. For example, a joinery

business in a modern brick factory fitted with a built in sprinkler system, will pay a lower

rate than if it was located in a run down 80 year old weatherboard building.

The final rating factor is the claims experience. If an insured is a regular claimant for say

water damage claims, then it is likely they will pay a higher rate than someone in a similar

business with no claims.

Something that should be kept in mind with fire insurance is the co-insurance clause.

This means if you do not insure for the full replacement value, then in the event of a claim

you will share a proportion of the loss.




As a simple example, if the replacement value was $100,000 and you only insured for

$50,000 than you are only half insured. In the event of a $20,000 claim, the insurer would

pay $10,000 and the insured would need to meet the shortfall of $10,000.

Stock, Plant & Equipment

Stock does not just mean the value of goods sitting on the shelf ready for resale, but can

cover such items as work in progress. Even though you have not finished the manufacturing

process, you have value added to the raw materials and need to coveryour risk through this

process.

Plant and equipment used by the business needed to produce an income also needs to be

carefully considered and true values applied. Should you under insure and need to replace

specialist equipment with new, you may find that you cannot afford to do so and your

business viability may be compromised.

We recommend that you seek specialist advice from your broker/agent regarding

this issue.

Business Interruption

While the fire policy covers the physical assets of a business, this policy insures the loss of

income following a claim under the fire policy. Even though a business may be temporarily

closed or operating in a reduced capacity, there will still be ongoing expenses to be met,

such as mortgage and other finance repayments, salaries to key staff (to stop them leaving

the business and joining up with a competitor!), insurance costs, rates and taxes etc.

For example, a local hotel was damaged by fire and the hotel was unable to operate for a

month while repairs were being carried out, then the hotel would lose a substantial income

while the doors were closed. There would however still be expenses to be met such as those

referred to earlier.

This is an involved policy, with insurers, loss assessors, and accountants sometimes

struggling to agree on the insured's entitlement.

Many businesses elect not to effect business interruption insurance. History shows that most

of those businesses who suffer major fire losses do not remain in business, due to the fact

they are unable to meet the ongoing expenses while the business is being re-established.

Burglary

As the name implies, this insurances provides cover where premises have been illegally

entered and goods stolen.

Unlike a fire policy, co-insurance does not apply. With burglaries, it is very rare for the

premises to be totally “cleaned out”; therefore an arbitrary figure is normally selected as the

sum insured based on the items most likely to be stolen.




In an office risk for example, it is unlikely that desks, chairs and other furniture will be

stolen. It is more likely that computers and other electronic items will be stolen; the sum

insured should reflect the value of those items then.

Several rating factors are involved, the first being the attractiveness of the goods. A camera

store or a tobacconist would pay a far higher rate than the local hairdresser or office. The

second rating factor is the level of security within a business. A supermarket that has a fully

monitored alarm would receive a discounted rate compared to a neighbouring supermarket

that wasn't alarmed.

Theft – theft is stealing without there being an actual forced entry, i.e. shop lifting. This is

generally not an insurable risk, although sometimes insurers do grant the cover, subject to

payment of an extra premium and normally a higher excess.

Money

This covers the loss of money as follows:

• From business premises during business hours

• From business premises outside of business hours

• From residence of authorised employees

• While in transit to and from the bank or private residence

With the increasing use of EFTPOS and credit cards, money insurance is not seen as often

nowadays as the actual “cash” being used is reducing.

The premium varies little between occupations, with $5,000 cover costing around $150 and

$1,000 around $100.

If a business was carrying large amounts of cash with inadequate security, then they may

pay a higher rate or in fact may not be able to purchase any cover at all.

Glass

Covers fixed glass such as windows, mirrors, and toilet cisterns. The premium varies on the

number of windows and the size of the glass in those windows. A retail shop would pay

around $200 for this type of cover.

If signing a lease for rental of commercial premises, you will probably find a clause that puts

the onus on you the lessee, to insure the buildings plate glass.

Product Liability

Product liability is designed to provide insurance cover for damage or injury that is caused to

your customer by using your product. For example, if you manufactured chairs and I sat on

one of your chairs and a leg broke, causing me to fall and injure my back, this cover would

cover you against my personal or medical claim against your business.




Now day’s producers of products have an obligation to prove that their product was NOT

responsible for any damages claimed. This issue is covered under the Australian Consumer

Legislation.

Machinery Breakdown – Computers and Electronic Equipment

As the name implies, these policies cover the breakdown of electric motors and electronic

equipment. A farmer for example would need to insure his dairy plant, while an office would

insure their computer equipment. The farmer’s policy could include cover for loss of

refrigerated milk as a result of a motor breaking down, while the office would extend their

policy to cover loss of data and the cost of rewriting that data.

The premium depends on the occupation, the type of equipment to be insured, and the

existence or otherwise of maintenance program etc.

Fidelity Guarantee

This covers the fraudulent embezzlement of funds by any employee or authorised

representative.

Most policies have a exclusion that the matter must be reported to the police before a claim

could be accepted.

Premiums vary depending on the occupation, the number of staff that have access to the

money, audit procedures etc.

Personal sickness and accident

Q? Have you considered what would happen to your business if you were to become ill or

had an accident?

A. Including Personal Accident & Sickness cover in your Insurance Mix can help minimise the

impact to your business if you are unable to work.

The Cover

Personal Sickness and Accident cover protects the insured against loss of income resulting

from an injury or sickness.

Goods in transit

As the name implies, this insurance covers goods in transit, whether they are being

imported, exported, or inter or intra state movements. The majority of businesses don‟t

require this insurance, with cover generally being taken out by carriers, tradesmen,

importers, exporters and the like.

The premium is based on the actual goods being carried (a glass importer would pay a

higher rate than a business importing clothes), the destination of the goods (Tasmania wide

cover would cost less than Australia wide cover), and the type of cover effected (a broad

accidental loss and damage policy is dearer than a basic perils cover).




The policy is normally on a declaration basis, similar to a worker’s compensation policy

where an estimate is made at the beginning of the insurance period and an adjustment

made at the end of the period based on the actual goods carried.

Audit & investigation

Regulators are increasing the pressure on businesses and private individuals to ensure they

are complying with relevant legislation.

The regulators regularly require audits to be undertaken to ensure that any returns that

have lodged are correct and in accordance with the legislation. Insurance cover is available

to cover the cost of those audits or investigations. Some audit costs can be up to $10,000.

Staffing

If you are intending to employ staff, you will need to consider the following;

An Employee Tax File Number Declaration;

As an employer you are required to forward to the A.T.O an employee statement and

declaration detailing their personal details and tax file number.

Superannuation Guarantee Levy:

As an employer you must provide a minimum level of superannuation support for your eligible employees – At the time of writing it is currently 10% of an employee’s earnings base.

PAYG withholding tax for employees:

If you have employees, you’re required to withhold amounts from their pay and send the withheld amounts to the Tax Office. This process is called “withholding‟ and is done using the pay as you go (PAYG) withholding system.

You must register with the Tax Office before you withhold from payments to your employees.

Action Plans

1. Actions plans specify the actions needed to address each of the top organizational issues

and to reach each of the associated goals, who will complete each action and according to

what timeline.

2. Develop an overall, top-level action plan that depicts how each strategic goal will be

reached.

3. Develop an action plan for each major function in the organization, e.g., marketing,

development, finance, personnel, and for each program/service, etc. These plans, in total,

should depict how the overall action plan will be implemented. In each action plan, specify

the relationship of the action plan to the organization's overall, top-level action plan.




4. Ensure each manager (and, ideally each employee) has an action plan that contributes to

the overall. These plans, in total, should depict how the action plans of the major functions

will be implemented. Again, specify the relationship of these action plans to the

organization's overall, top-level action plan.

5. The format of the action plan depends on the nature and needs of the organization. The

plan for the organization, each major function, each manager and each employee, might

specify:

a) The goal(s) that are to be accomplished

b) How each goal contributes to the organization's overall strategic goals

c) What specific results (or objectives) much be accomplished that, in total, reach the goal

of the organization

d) How those results will be achieved

e) When the results will be achieved (or timelines for each objective)

Contingency Planning

Contingency planning is a systematic approach to identifying what can go wrong in a

situation. Rather than hoping that everything will turn out OK or that "fate will be on your

side", a planner should try to identify contingency events and be prepared with plans,

strategies and approaches for avoiding, coping or even exploiting them

Contingencies are relevant events anticipated by a planner, including low-probability events

that would have major impacts. Contingency planning is a "What if?" skill important in all

types of planning domains, but especially in contested and competitive domains. The

objective of contingency planning is not to identify and develop a plan for every possible

contingency. That would be impossible and a terrible waste of time. Rather, the objective is

to encourage one to think about major contingencies and possible responses. Few situations

actually unfold according to the assumptions of a plan. However, people who have given

thought to contingencies and possible responses are more likely to meet major goals and

targets successfully. The following questions can help develop contingency plans:

• What events may occur that require a response?

• What disasters might happen during execution of the plan?

• What is the worst case scenario of events for the situation?

• What scenarios are possible for the situation?

• What event would cause the greatest disruption of current activities and plans?

• What happens if costs of the plan are excessive? what happens if delays occur?

• What if key people leave the organization?




• What are the expected moves of antagonists and competitors?

• Who or what might impede implementation of the plan?