Your company’s business structure acts like its backbone. From big picture decisions to daily operations, the structure of your business ends up defining all aspects of your organisation. To that end, business structure mistakes can end up being costly and even fatal for your business.
If you’re choosing a structure for your business, here are some mistakes you should do your best to avoid.
1. Choosing the Wrong Structure
Understanding the nature of your business is the first step in determining what you want your business structure to be. If you choose the wrong structure that doesn’t work well with your business model, you’re more likely to fail in the long run.
2. Picking the Cheapest Structure
It might be easiest and cheapest to form a sole proprietorship. However, as a sole proprietor, you also have unlimited personal liability that can create countless problems for you in case of the company’s bankruptcy. Choosing a business structure that depends on the level of risk you can endure is essential.
3. Creating Over-Complications
The key to choosing the right business structure is to keep things simple. If you over-complicate your structure, you’ll have many pitfalls. If you’re just starting out, choosing a simple structure would be best because you can work your way up as your business grows. However, it isn’t easy to do the opposite.
4. Not Having an Agreement in Place
As soon as you decide on a business structure, it’s important to put an agreement in place to make sure that your business doesn’t have any problems in the long run. An agreement can help you and your partners be on the same page and ensure that every stipulation is clearly laid out.
5. Doing it on Your Own
When choosing a business structure for your organisation, you’re likely to choose the wrong one, especially if you’re an amateur. Seasoned business advisors can help you choose the right structure depending on your company’s ownership, affinity for risk, and the desired tax structure.
Are you looking for quality business advisory services in Sydney, NSW, or New Castle? Ace Biz has got you covered! We have a qualified team of industry experts who are adept at providing business consulting, HR services, accounting and tax advisory, and a lot more. We can help you choose an appropriate business structure to ensure your long-term success
Get in touch with us now and set up your company.