LEGAL SET UP FOR YOUR SALON – Have you got yourself covered?

Home / HABA Blog / LEGAL SET UP FOR YOUR SALON – Have you got yourself covered?

Posted October 29, 2018

Being in business isn’t easy. Whether you’re a new business just starting to get set up, or whether you’re quite established and looking to make a change in the way you operate – there are plenty of legal requirements that you need to check off, and we can absolutely assure you that it’s more involved than registering for an ABN. So, here’s our checklist of things you need to have in order to cover your salon or spa.

 

Business Registrations

We know all businesses have to have an ABN, and 99.9% of salon owners will have one already. But there are a number of other registrations you need to make sure you’ve got covered:

• Registration of your business name as a trademark – this is important so that you have exclusive rights to your business name and so your competitor doesn’t go and set up a similar brand in an attempt to take your clients.
• Registration of your domain name and any variants – make sure that you get the .com.au and the .org and the .com variants to ensure that someone else can’t set up a website on a similar domain and take clients or traffic that was intended for your business!
• Registration for GST – you need to ensure that this is renewed each year if you are going to be collecting GST so make sure that this doesn’t lapse
• Registration for a tax file number (TFN)
• PAYG withholding and registration with the clearinghouse – this can be alleviated for you if you work with HABA Payroll, who handle all your PAYG and Clearing House issues

 

Business Structure

This is often where salon owners get themselves in a bit of a mess. There are 4 main structures used by small businesses’ in Australia –

Sole Trader – an individual operating as the sole person legally responsible for all aspects of your business. While you can employ people while operating as a sole trader, you are personally responsible for anything that occurs during your business – meaning, if you get it wrong, you are open to being personally sued by a client and they could potentially take reparations out of elements like your home or personal savings.

Company – a legal entity separates from its shareholders, usually denoted as a PTY LTD incorporated entity. This may include a number of directors, or could just be you with an incorporated structure. There may be more paperwork and higher ongoing cost to registering as an incorporated company.

Partnership – an association of people or entities running a business together, but not as a company. A simple example of this is a beauty salon owner running their business in part of a salon, and a hairdresser running their business within the same space. You might be entered into a partnership as there are a number of shared services, which could include staff, equipment and transport, that need to be clearly marked.

Trust – when your entity holds property or income for the benefit of others, such as parents, kids or similar.

When deciding on a structure for your business, it’s best to seek advice from your financial planner. They will help you choose a structure that is most appropriate for your business needs, weigh the pro’s and con’s and ensure that you are getting the best tax benefit from the way in which your business is set up. You might even change between different business structures over the life of your business – so make sure that how things are set up is still relevant to your situation today.

 

Salon Policies and Procedures Manual

We know, we know, we bang on about the Salon Policies and Procedures Manual often. But there is a reason – we have seen many salon owners and businesses saved by having a strong Salon Policies and Procedures Manual in place. A Salon Policies and Procedures Manual is made up of statements of principles and approaches to dealing with the general management and ministration of a salon. They act as a framework for how the salon deals with everything general operational problems, or how to respond to requirements to comply with legislation, regulation and codes of practice. They provide the framework for business planning and demonstrate that the organisation is being operated in an efficient and professional manner. ASalon Policies and Procedures Manual should be consistent with the values held by both the business and by employment legislation. Having a standard set of guidelines creates a stable working environment, where favouritism, special treatment, nepotism and prejudice are thrown out the window – the policy allows everyone to be treated equally and each situation to be handled effectively and efficiently. As a HABA member, you can download this Salon Policies and Procedures Manual template HERE.

 

Workplace Health and Safety

This is key in businesses like hair salons and beauty spa’s where there are chemicals involved that could be damaging to both yourself, your staff and your customers. As a business owner, you have a legal responsibility to implement WHS practices in your workplace to ensure that your business doesn’t create health and safety problems for anyone coming into contact with your business. Under Australian WHS laws, all business are required to

• Provide a safe work premises
• assess risks and implement appropriate measures for controlling them
• ensure safe use and handling of goods and substances
• provide and maintain safe machinery and materials
• assess workplace layout and provide safe systems of work
• provide a suitable working environment and facilities
• have insurance and workers’ compensation insurance for your employees.

While there may be a fee to implement safe practices and install safety equipment in your salon, if you don’t do this it can be costly or there can be more severe action taken. We advise you seen independent legal advice on what WHS items are appropriate for your salon and business to ensure that you are covered.

 

There’s nothing easy about being in business, we know that. But it’s important to make sure that you’re covered at every stage and to ensure that no matter what business life throws at you, that you are covered and protected. Having membership with HABA is one part of that coverage, offering our members dedicated assistance in workplace relations matters, and the getting these other elements sorted is the other part. So, make sure you protect yourself and your business and get your business coverage in order.

 

*Note, this blog post should not be considered specific advice, it is a general statement produced by the Hair and Beauty Association and should not be considered to be specific to your situation. We absolutely recommend that you seek advice from your financial planner about your specific situation before making any major decisions about your business.