SETTING YOUR BUSINESS UP FOR SUCCESS

What to consider when planning and running your business

- CHRISTELLE LOUW

CAN YOUR business survive a rapid change in the environment? Would you be able to continue to operate if disaster struck? Such issues can be avoided if you con-sider several factors upfront, while still in the planning phase.

Beyond that, being mindful of certain issues as you run your business can ensure that it will be able to survive the vagaries that life throws at you, and even thrive long into the future. Accordingly, there are five essential factors to consider:

Ownership

Selecting the most appropriate type of ownership for your business is crucial. It’s the first step in structuring your business—and can have real consequences in the future when needing to weather a storm, or when facing uncertainty.

In South Africa there are essentially four types of ownership for businesses, each of which bears different risks and responsibilities such as reporting, compliance, tax rates, and personal exposure to liability. These are: a sole proprietorship, partnership, private company, and public company.

The selection should not be taken lightly. In order to choose the type of ownership best suited to your undertaking, it is necessary to understand the industry that you are in—as well as the size, complexity and nature of business conducted. The future growth of the business, and your exit strategy, are equally important in making the decision.

Lawyers, doctors, and accountants may find great practicality in having partnerships. On the other hand, large corporations with multiple owners may prefer to establish themselves as private or public companies. Should you wish to finance your undertaking, compliance will be paramount. By ensuring that your business is properly set up, it will offer you the best opportunity for profitmaking and success.