We just received a call from a potential new client today about their current business arrangement which has just gone pear-shaped. In our brief discussion we learned a few important facts:

1. Business knowledge - the business owner had no knowledge of their actual business structure but thought it was a partnership or maybe a company.  In other words, they had no idea if they were in an actual partnership, company or other entity.  Understanding your actual business structure is your duty as a business owner - read more on why a business structure is so important here.
2. Business income - after almost 5 years in the same business the investor decided to review their income for this period and was shocked to discover that they could have made more money waiting tables full time.  So, our first question was - how did they not notice they were earning less than $25,000 p.a.?  It is your duty as a business owner to understand how much your business is making and how much you are paying yourself.
3. Exit plan - there was no business succession plan or planned business agreement, which would normally include an exit plan.  They are now tied up with lawyers and arguing over their very different views on which one of them actually controls the business.

If you are in business with someone and don't understand exactly how it works, then act now - you could save yourself thousands of dollars and a world of pain. Even better, get it right before you go into business, it will save you money and time in the future. 

It is your responsibility to know your numbers and be accountable for your business. Let's face it being in business is a big commitment, it's up to you as a business owner to understand the rewards you are receiving for the blood, sweat and tears you pour into it.

We provide structure advice regularly and have seen the ongoing benefits and security this provides to our clients over the years - Contact us on BDTeam@Primarius.net.au