Things to Consider as a Director of Your Own Business

Are you a Director of Your Own Business?

A lot of business owners operate through a Proprietary Limited Company, and therefore, are Directors.

The trouble is a lot of business owners do not know the legal responsibilities as a Director of their company. They tend to rely on their accountant to do it all here are some suggestions for you.

Here are a few things to help you as a Director

Have a board meeting each month.

This is not a management or operational meeting. But a chance for you to work on your business and not in your business.
Have an agenda and keep minutes of your meeting. With decisions, and make items to action and followed up. Reviewed the previous month’s financial results and look at your Strategic Plan for Growth. Other reports to consider include WH  and S, Marketing and the results you are getting. And discuss any employee issues.

Understand your responsibilities.

If you read my book on Board Basics, which is available at www.TappAdvisory.com.au. You will learn what you have to ensure your company is complied with all the laws that affect your business.

Did you know for example, that the directors are responsible, and personally liable for all the money owed by the company. Or for any injury to staff and unpaid staff superannuation or tax.

Pay yourself dividends.

You’ll be surprised how many of my clients make a profit in their business? Yet they’ve never pay themselves a dividend from the profits.

If you are just drawing the wage, when you have only bought yourself a job. The real wealth creation is in paying fully franked. dividends to the owners of the company.  This of course is assumes you make a profit each year. If you don’t make much profit, then contact me and I will have a 30 minute consultation with you so you can start making a profit.

Have an Exit Plan

What happens to the business when you want to retire or you pass away?

Have an Exit Plan ready, so your family is not left with a mess. Statistics show that 91% of business owners rely on the sale of their business to fund their retirement. But they have not ensured that they’ll get the maximum sale price for their business. If you are not sure about any of these things, then call me for a 30 minute talk to discuss your role as a director.

Are you paying yourself a directors fee for this responsibility?

On top of your normal salary that you pay yourself. You should pay yourself also for having the responsibility of being a Director.

Have a think about your role as a director and let me know if I can help, contact me here.

Warren Tapp
Tapp Advisory, Business Consulting Gold Coast.
Business Profits Made Easy.