This is the point that all your hard work starts to become tangible. Take some time to think about the best way to structure your business and seek professional advice from an accountant or business adviser. Remember to:
- Choose a business structure that suits your requirements (e.g. sole trader, partnership, company or trust)
- Understand what is required under legislation if you need to employ staff
- Prepare a business plan to set you up for success
- Arrange for finance if required through equity contributions or debt funding
- Work out the appropriate level of insurance for your business
The Business Queensland website has a suite of tools to help you successfully start your business. Visit https://www.business.qld.gov.au/starting-business
ACTION: Read the following checklist and visit the Business Queensland website to run through key steps required to set up your business.
What you need to do to set up your business
There are many tools to help you set up your farm stay business. The Queensland and Australian government websites are a great place to review what you need, and how to go about it. You can even apply for ABN and business registration online.
Before setting up your business you should seek relevant financial, legal or other advice to help determine the viability of your business. Professional advice will set you on the right path from the get-go, leading to a greater chance of success down the track.
When starting your farm stay you will need to decide how to structure the business, depending on the size and nature of your farm stay and how you want to run the business.
Structures may include Sole Trader, Company, Partnership and Trust. For more information on business structures visit the Business Queensland website https://www.business.qld.gov.au/starting-business/starting-buying/setting-up/structures.
Once you have decided on your business structure you may need an accountant or lawyer to help you register the business with the Australian Securities and Investments Commission (ASIC). Visit https://asic.gov.au/for-business/registering-a-company/steps-to-register-a-company/ for more information.
You will also need to obtain an Australian Business Number from the Australian government at https://register.business.gov.au.
What if I have an ABN
It is possible to have two or more businesses registered under the same ABN, however this is only possible if they are the same business structure. Everybody’s circumstances will be different, so it is best to seek professional advice on this matter.
A single company can have multiple business names registered to it, in which case one registered business name may be held by the pastoral business, while the other is held by the farm stay business. The same applies to sole trader, partnership and trust structures.
If the current pastoral business operates as a partnership but you want to establish the new farm stay business as a company (or trust, or sole trader for that matter), you will need to apply for a new ABN.
Speak to your accountant, or business adviser for further advice.
When deciding on a name for your business check whether you need to register the business name and do a search on what names are available at https://business.gov.au/planning/new-businesses/choose-a-business-name.
You also need to know whether your proposed business name is available as a website domain. You can search for this at https://business.gov.au/online-and-digital/business-website/register-a-domain-name
A business plan is crucial for your farm stay business as it provides a clear roadmap for operations, helps secure funding if needed, and ensures sustainable growth by outlining goals, strategies, and financial projections. A business plan sets you on the path to greater success and is good practice for managing and running your business.
Useful business plan templates can be found at https://www.business.qld.gov.au/running-business/planning/writing-plan.
An example business plan for a farm stay can be downloaded here (include the original example business plan PDF).
Many farm stay businesses are managed and operated by the owners of the business. However, as your business grows you may need to hire employees to help with day-to-day operations. In this case you will need to understand your obligations as an employer.
Requirements such as tax, pay, annual leave and the rights of parents are all covered by employment legislation and must be applied fairly to employees across your business.
For more information about your obligations as an employer visit https://www.business.qld.gov.au/running-business/employing and https://www.fairwork.gov.au
If you do need to find employees, you can post job availabilities on the Jobs North West Queensland portal
Choosing the right insurance for your farm stay business is critical. Having no insurance or being underinsured is risky. It is recommended that you seek professional advice on your business insurance needs from, for example, an insurance broker who can accurately assess the risks and help facilitate insurance purchases.
Potential risks to your farm stay include, but are not limited to:
- Property damage
- Equipment breakdown
- Liability claims
- Theft
- Natural disasters
- Pandemics
Insurance can be taken to protect things like:
- Business assets
- Customers
- Employees
- Business owners
- Earnings
Common types of insurance policies are listed below, noting that there may be other types of insurances you need.
- Workers’ compensation – compulsory if you employ staff
- Compulsory Third-Party insurance – covers personal injury to third parties in an accident. This is required if you use a vehicle for business purposes.
- Fire – protects your principal assets, including buildings, contents and stock.
- Business interruption – can cover risks such as loss of profit, or additional costs incurred because of an event such as fire.
- Public liability – covers your potential liabilities to third parties for personal injury or damage to property if you are negligent.
- Property, home and contents insurance – safeguards your property in the event of theft or damage.
Having a financial plan for your farm stay business is essential. At the most basic level, it boils down to whether you can generate enough income to cover your costs and make a profit.
While you may not start your farm stay business for the sole purpose of making money, the reality is that if you are unable to make money your business won’t survive.
Work out what level of profitability you can expect in year one. You can do this by making reasonable estimates of your costs, the number of visitors and the prices you will charge.
Calculate key figures such as your break-even point, gross profit and net profit, as well as calculating profit and loss projections and a cash flow projection for your first year.
For more information about how to calculate financial projections visit the Business Queensland website at https://www.business.qld.gov.au/running-business/finance/essentials/plan.