One of the major reasons for the failure of small businesses is under-capitalisation, that is, starting-up or buying a business without enough money to make it work.
In order to prevent this common mistake, it is necessary to carefully work our how much money you will need to start, run and grow your business. A qualified accountant is an ideal person to help you to do this.
Consider the following questions about your finances:
- Have you prepared a business plan for your business?
- Do you know how much it will cost to set up, market and run the business?
- Have you worked out profit and loss and cash flow budgets for your first 3 years of business?
- Have you worked out exactly how much money you are prepared to put into the business?
- If you need to borrow money for your business, do you know where you will get it and how much it will cost you to borrow it?
- Do you know what gross profit, level of expenses and net profit you can expect from your business?
- Do you know what records you need to keep, to maintain control of your business?
- Are you aware how tax affects your business? (Including WET, Licence fees, provisional, company, capital gains, fringe benefits and GST)
- Have you discussed your plans with your business lender, accountant and solicitor?
- When you considered the capital costs of establishing a vineyard did you account for the fact that the vineyards first harvest is not expected until the 3rd or 4th year after planting?
- Have you a clear understanding of the Liquor licence requirements in Queensland
- Are you considering installing a winery? Do you have the technical skills and training required to make quality wine? or have you included the cost of employing the services of a qualified winemaker?
- If you are investing in a winery, have you considered purchasing the grapes from specialist growers?
- If you are considering a vineyard, where will buy your grapes? Do you have a contract for supply?
- Before planting a vineyard, consider your sales potential and if additional planting’s are really necessary.
- Have you a well researched marketing plan?
Source of Funds
- Banks: Personal Loans, Business Loans, Credit Cards, Overdrafts and Lines of Credit
- Solicitors: Interest Only Loans
- Finance Companies: Leases and Credit Loans
- Venture Capital
- Investors: Private, Family and Friends
Last updated
22 June 2005.
