Consider you are a small business advisor. You have been approached by a client, John Stratton, who is interested either in establishing a new electrical business, purchasing the existing Jims Electrical, or buying into the partnership of Jim and Wendy Burns. Your client wishes to make sure that he has obtained as much information as possible about the establishment of a new business before making any decisions. He requires advice from you about the steps he needs to take to establish a new business. Such information will include advice on the most appropriate business structure, the legal and taxation requirements of establishing a new business and possible sources of finance. Further guidance on the case scenario: Before you can provide advice to your client it is essential that you have a good understanding of his business and personal objectives.

You will also have to analyze the records of Jims Electrical to establish the viability of either a purchase or establishing a partnership with the existing owners.

As part of the process you will have to determine the level of your clients knowledge of business operations and his commitment to the future success of the business. You will need to establish a level of mutual trust and confidence with your client to obtain the information you need to assess their requirements. You will consider the information necessary to enable you to provide proper advice for your client. Before giving advice you must have collected sufficient information about both the client and the business they are considering purchasing or establishing. Comprehensive analysis of the records of the existing business is essential before proper advice on the purchase of all or part of the business can be given. As well it is imperative to have as full an understanding of the financial position of the client and the business skills that person will bring to the new business.

On conclusion of this element you will provide your client with a report providing him with advice on how to establish this business based on the information he has provided.

This report will contain relevant information covered in the previous elements relating to the business structure and the legal and taxation implications of establishing the business. Additionally you will need to provide information to your client on the risks and responsibilities of business ownership and the importance of establishing contingency plans to protect against unexpected occurrences. You should identify essential insurance schemes to protect the assets of the business, key personnel and the owner. You will also need to consider the internal control processes they will need to ensure the business operates successfully.

The client has approached you with his business idea. The client is not sure about the legal requirements, ethical requirements, risks and other aspects of the business. Based on this situation, please prepare a response to the following questions: 1. How do you prepare your advice in this situation? Discuss.

2. Prepare summary information to the client for the situations above-(having a brief Microsoft PowerPoint slides is ideal way to present these type of information to the clients).

3. If you were starting a business, what tax considerations might cause you to prefer to set it up as a proprietorship or a partnership rather than as a corporation?

4. Assume that you are considering for risk management through insurance for your business. What types of insurance policies do you generally procure for your business?

5. What is contingency planning? Identify the issues that need to be addressed in a typical contingency plan.

6. What are the standard financial analysis techniques? Briefly discuss ratio analysis and cost benefit analysis.

7. Consider the sources of finance available for your client and identify the features of each. (You should consider at least two short-term sources and two long term sources)

8. Identify the 10 employee entitlements that employer must abide by (National Employment Standards (NES) as per the Fair Pay Standards 2009.