deliver the resilience and integrity of all the digital platforms on which our 21st century economies are built.”

The Government is right to focus on fostering an environment for better digital intelligence but the real challenge is paving the way for Australia to become a place where people want to own and retain intellectual property, not take it overseas.

Whilst Australia has a mature and desirable market, we still have a way to go in creating a digital intelligence environment conducive to strong capital growth.

Other countries cannot be criticised for having better ways of preserving capital. Experts and digital labor will continue to follow this capital abroad unless significant changes are made here in Australia.

Any government-backed programme to retain smart businesses in Australia, needs to be coupled with a new wave of tax reforms that encourage the creation and retention of intellectual property.

Governments around the world are trying to navigate taxing intellectual property in a borderless environment and there is tough competition between countries.

Home grown intellectual property should be encouraged to remain in Australia. Tax reform is a necessary tool when other countries are desperately trying to attract great ideas using concessional taxation of intellectual property. The people that have conceived those ideas will surely follow.

The Australian government’s $11.2 million initiative to establish “Landing Pads” in Berlin, San Francisco, Shanghai, Singapore and Tel Aviv, was designed to provide market-ready startups with a 90 day operational base located in one of the five global innovation hotspots.

While such an initiative could equip start-ups with the necessary tools to get their foot in the door, it also raises issues of integrity and security of that Intellectual property and whether sufficient protocols and measures are in place to ensure that it can be both commercialised and safeguarded abroad.

The state and federal governments should place greater importance on implementing long-term initiatives that dovetail with models of proven initiatives at a local level.

For example, Brisbane is leading the way in terms of creating a prosperous local environment for digital businesses to form.

Brisbane was only the second city in the world to appoint a Chief Digital Officer who worked with the business community to form a digital first strategy which aims to drive digital uptake and use in Brisbane.

Critical ingredients to the success of these up and coming business hubs are international transport links, high quality internet services and simple and easy work environments.

Start-ups would also benefit from having access to the distribution platforms of established players. If the federal government were to support larger digital businesses with distribution by encouraging them to keep their IP here, these larger businesses would be better placed to support the startup economy.

It’s time that the industry has a shake up and Australia should be looking at ways to keep the digital sphere close to home.

An IP style hub located in regional Western Australia, for example, could provide a gateway to strengthening Australian-Asian ties while also compensating for our deteriorating mining industry.

Business development, skills and information sharing are all key drivers in industry growth and it’s time that we focus on supporting and driving these elements within our own country to bolster businesses, big and small. More importantly, it’s imperative that local, state and federal initiatives are coordinated to ensure Australia’s best and brightest ideas are not lured away from our digital sphere when they are on the brink of commercialisation.

They say that sex sells but in today’s market, it is data that can really land you the big bucks. Whether you are simply collecting email addresses to build a database of loyal customers or on-selling the information you accumulate, data plays a huge role in the lifecycle of nearly all startups.

The sheer volume of data collected from consumers on a day-to-day basis has exploded over recent decades. It is unsurprising, then, that privacy concerns have grown almost as fast.

As a startup owner, what should you be doing about it? We’ve put together a back-to-basics guide to assessing your business’s data use.

1. Define The Data

Like many aspects of your business, taking a big first step sometimes requires a few steps step backwards. Take a moment to consider the bigger picture.

At which points along your startup’s customer experience chain might you find yourself in possession of customer data?

Most businesses these days will find themselves doing one or more of the following:

• Requiring a name and an email address for customers to access a website
• Collecting credit card details for purchases; or
• Collecting home addresses for deliveries.

Examples like this may seem obvious but the more complicated your business model, the more unusual your data collection may be. You may find that you are retrieving and storing a customer’s location, accessing other data stored on their phone, such as photos and notes, or even tracking what they buy at the grocery store each week.

It is important to work out exactly what data you might find in your hands – or indeed, what data you would like to find in your hands – before you can work out how best to handle it.

2. Make The Big Decisions

Once you know what customer data you are likely to need, it is time to decide how you are going to handle it.

You might, for example, find that you want to use the data to create a dynamic and customised consumer experience. This could involve making a decision about whether the data stays with your business or is passed on to third parties.

Alternatively (or additionally), you may wish to use the data to secure a loyal fan base and market new products and services. In this case, you may consider:

• Do you want to be able to directly contact your customers?
• What sorts of things would you like to contact them about? Just your own goods and services, or those of other businesses or causes too?
• How would you like to contact them? Call, text, and/or email?

Perhaps you are particularly savvy and looking to sell the information you collect for the purposes of targeted third party advertising.

It is important to remember that the issue is not only to decide how you plan to use this data but also how you plan to store it. How will you secure it? Will you anonymize it? Will you be making multiple copies of the data? Will owners of the data be able to erase it from your system? If so, how?

Of course, these are only a few suggestions to get you thinking. The only limitation on how you might use customer data for your business is your imagination … or is it?

3. Work Out The Details

Here comes the bad news: now that you have decided how you would like to use and store the data you collect, it is time to work out whether you are allowed to or whether legal restrictions apply.

This is a two-step process.

STEP ONE

The first step is to work out if any laws prevent you from handling customer data in the way you would like.

Two key pieces of legislation will likely apply to you and your business: the Privacy Act 1988 and the Spam Act 2003. Now, there is no need to spend days trawling through these laws but it is important to do some research to find out what you can and cannot do with the data you collect.

Spam Act: To give you a general idea, the Spam Act prevents businesses from sending unsolicited commercial electronic messages – do not assume that you can get around it!

The law determines if a message is ‘commercial’ from the content of the message generally as well as the way the message is presented. In other words, even though you are not advertising your goods or services explicitly, the email you just sent to your list of subscribers (for example, with the aim of testing the market or gauging a prospective customer’s interest) may be considered spam if they were not aware that you would use their email address for that purpose.

These kinds of messages are considered commercial because they seek to establish a commercial relationship. You need to gain consent through other means, such as a letter, a phone call or a face-to-face conversation.

Take home point: Never send an electronic message to a group or an individual if they have not consented to receive it.

Privacy Act 1988: The Privacy Act will govern most of your data activities, particularly, the Australian Privacy Principles (APPs). Although these principles will only govern businesses of an annual turnover of over $3 million, it is best practice to make sure your venture complies regardless.

The APPs cover:

• What to include in your privacy policy (see step 4)
• What to do with data you receive that you asked for … and data you receive that you did not ask for!
• Management systems that must be in place to deal with data-related complaints
• How you can use and disclose data in Australia and overseas
• Expectations around keeping data secure

STEP TWO

Once you know the legal do’s and don’t’s, the next step is to decide whether you have the resources to comply with relevant laws.

If you do not think your business model will cope with the pressure of these restrictions, it is better to reassess now before you go any further.

It is also a good idea to think about whether your data collection is really the best way to foster a positive relationship with your customers, even if you are complying with all your legal obligations.

Take, for example, the recent media frenzy over the alleged privacy invasion by Niantic in their PokemonGO app. It was widely reported that an error in the app required users to give full access to their Google accounts in order to use the app, a permission that it seemed went far beyond the scope of what was reasonably required for the purposes of the app. Though Niantic has now indicated that no data of this kind was collected despite initial reports, the case provides a perfect instance of the potentially damaging effects of dubious data collection on your relationship with your customers.

Ultimately, the more complicated your business, the harder it will be to navigate the rules and restrictions that surround data protection and the more likely it is that you will need to get these details from a lawyer to avoid getting into hot water down the track.

4. Disclose, Disclose, Disclose

After you have sorted through the details, work out what your customers need to know in order for you to store, use or sell their data as planned, and how you are going to tell them.

Enter the Privacy Policy.

Usually tucked neatly away in the “legals” section of a website, the Privacy Policy is your opportunity to tell your customers everything you have worked out in steps 1 and 2 (above), and will be guided by the rules and restrictions you have uncovered in step 3 (above).

In more technical terms, the privacy policy it is a contract between you and your customers. They can either agree to your policy and continue to engage with the business, or they can walk away before their data is captured. The contents of a Privacy Policy will often vary widely in order to accommodate different business models and concepts.

The APPs provide some guidance in Part 1.4, noting that a Privacy Policy must contain the following:

• how you collect and hold personal information
• the kinds of personal information that you collect and hold

• the purposes for which you collect, hold, use and disclose personal information
• how an individual may access personal information about the individual that is held by you and seek the correction of such information
• how an individual may complain about a breach of the APPs, or a registered APP code (if any) that binds you, and how you will deal with such a complaint
• whether you are likely to disclose personal information to overseas recipients
• if you are likely to disclose personal information to overseas recipients—the countries in which such recipients are likely to be located if it is practicable to specify those countries in the policy.

In this context, ‘personal information’ means data about an identified individual or a person who is reasonably identifiable.

As a general rule, personal information should not be collected unless it is reasonably necessary for one or more of your business’s functions or activities. The APPs may seem overwhelming at first, but give them a go – there is no better way to learn about how to correctly handle your business’s data collection than to go straight to the source.

A word of warning: It can be tempting to find a similar business and copy their Privacy Policy for your own use.

This is a breach of copyright law, and you may find yourself jumping out of the frying-pan and into the fire if you do it. If you are struggling to put together your own policy, consult a lawyer. Alternatively, if you do not have the funds to seek professional advice and you’re not sure what to do, the best policy is often to disclose, disclose, disclose!

If nothing else, this fosters a positive relationship between you and your customers, indirectly building consumer confidence in your brand and business.

5. Do

It is easy to throw together your Privacy Policy and to sketch out the various data storage and usage procedures, and then to think your job is over. While we might wish this were the case, unfortunately, the reality is a little more complicated.

Buckle up, because here comes one of the toughest parts in handling customer data: making sure you comply with any restrictions you have discovered in the detailing stage and making sure you actually do what you promise in your Privacy Policy.

Don’t be too disheartened. Data collection can offer you infinite opportunities to better market, sell, expand, and diversify your business – just make sure you do it right!

At the end of the day, remember that data collection is as easy as define, decide, detail, disclose, do!

Further Information

For more information and resources to help you understand what rules and restrictions may apply to your business:

• Australian Privacy Principles
• Guide to developing an APP Privacy Policy
• ACMA: Ensuring you don’t spam
• ACMA: Overview of the Spam Act 200 for business 

When was the last time you considered the potential legal and privacy implications of customer data retention for your startup? Let us know in the comments!

There are multiple factors that impact the success or failure of a startup.

In Australia, entrepreneurs are being put out of business by more than just underdeveloped planning and poor sales. The grim reality is that over 95% of new startups are destined to fail. Many of these are sunk by preventable legal pitfalls that new business owners did not foresee or did nothing to protect themselves against. When you have solid foundations in place to protect yourself and your business against unnecessary risk, you can devote your energy full time towards making your startup dream a success.

Below are some strategies to deal with avoidable legal issues in business early and effectively.

Have A Clear Ownership Structure

The common legal structures for businesses include sole trader, company, partnership and trust.

Choosing the right legal structure for your business from the outset is important as some structures provide protection against personal liability for debts and legal disputes. It also impacts your tax obligations and expenses and makes it easier to sell your business in the future, if you wish.

A Shareholders’ Agreement

Even if your partners are your parents or your best mates, a shareholders’ agreement is an important and necessary document that clearly sets out the rights and responsibilities of each shareholder in your company.

Without such an agreement in place, in the case of a legal dispute, it will be up to a court to decide the outcome.

There is no ‘one size fits all’ shareholders’ agreement. Each agreement must be drafted according to your unique set of circumstances and the outcome the shareholders wish to achieve in relation to shareholder funding or contributions, director appointments, how the company should be managed, dividends and financing, transfers of shares or an exit strategy.

Depending on how much of the company certain shareholders own, for example, the agreement may also stipulate that minority shareholders cannot be forced out of decision-making by majority shareholders.

You can start by downloading a basic shareholders’ agreement template and supplement basic clauses according to your needs by speaking with a legal professional.

A Commercial Lease You Understand

Commercial leases can be complex documents which spell out the rights and responsibilities of both landlord and tenant.

If you don’t understand the lease document, you could end up being liable for costs you didn’t anticipate such as utilities, repairs, taxes and the cost of documentation regarding the lease.

You may also have difficulty renewing the lease. Fighting a lease dispute can be expensive and losing such a dispute could mean that your company loses its space.

Make sure you fully understand the legal implications of your commercial lease agreement before signing.

Have Proper Warehouse Safety Equipment

If your business has warehouse space for storage, it is critical to have proper equipment and procedures in place that comply with Work Health and Safety legislation to protect your staff from preventable injuries.

Loads falling onto forklift operators and other workers account for a high percentage of Australian workplace injuries and fatalities. Forklift safety cages and large goods cages, for example, protect operators and everyone else working in the immediate area from physical injuries and protect your startup from potential workers compensation claims.

Mandatory Sexual Harassment & Bullying Education

No doubt you agree that this behaviour has no place in your workplace, but do your employees understand exactly what is defined as sexual harassment or bullying?

As a business owner, if you don’t dedicate the time and resources to train your employees in appropriate workplace conduct, you could leave yourself open to large fines for breaching workplace health and safety legislation. The resulting financial drain on your startup could quickly put you out of business.

Understand relevant legislation surrounding workplace health and safety, bullying and sexual harassment and have each employee complete the necessary compliance training.

Maintain Detailed Record Keeping

A commitment to detailed record keeping is necessary for many reasons including invoicing and accounts receivable, tax compliance and payroll.

If your company is not large enough to hire a full-time accountant or business manager, record keeping is a task that you can adequately perform yourself by using accounting and online bookkeeping software like Xero. If you don’t have time to maintain your own records, it is worthwhile contacting an accounting firm in your area.

Yes, outsourcing this work is an ongoing overhead expense, however, failure to keep accurate records can lead to serious problems for your business, the consequences of which can doom your startup before it starts.

Compliance With The Privacy Act

Depending on the nature of your business, you may be collecting data about current customers and potential customers.

As a business owner, it is critical that you comply with your obligations under the Australian Privacy Principles to avoid breaching the Privacy Act in the way that you collect, store, use and disclose private information about your customers.

Mishandling or misusing private information can lead to serious fines and penalties.

Conclusion

These are some of the main legal risks faced by Australian startup owners.

Understanding your rights and obligations, and building your business on a rock-solid platform, places you in a strong position to avoid any unforeseen obstacles that may impede your startup success.

What unanticipated difficulties have you encountered on your startup journey? Let us know in the comments below!

Starting a business is a calculated risk.

It involves weighing relative costs and benefits, assessing known financial risks, seeking advice from trusted sources, accepting uncertainty and pushing ahead anyway.

Most startup owners are big advocates of ‘when you need it’ learning. This usually involves learning something ‘on the run’ and finding out what you need to know about a specific subject area right before you need that information.

However, when it comes to the legal obligations involved in setting up and running a safe business, ‘when you need it’ learning doesn’t really cut it. This is largely because you need to be aware of your legal duties towards your business and your staff in order to actively comply with them.

It’s a lesson that was hard won by RM Williams earlier this year when the chain was fined $90,000 for breaching the Work Health and Safety Act after a worker was seriously injured, partly due to a lack of appropriate training.

This lack of formal workplace safety training can have a significant financial and human cost for businesses. In most states, businesses can face up to $3 million in fines for breaching workplace health and safety legislation.

CourseGenius And Compliance Training

Launching today, CourseGenius aims to fill a gap in the market by providing accessible and affordable online safety and compliance training courses to small to medium-sized businesses (SMEs) in Australia.

The WA-based company offers a platform for SMEs to create and deliver custom online training programs.

With additional topics to follow, the suite of compliance courses provides training in three core areas:

1. Workplace Health and Safety Fundamentals;
2. Workplace Bullying and Harassment; and
3. Social Media and Electronic Communication.

Developed by Australian law firm People + Culture Strategies, the courses are legally compliant and tailored for Australian workplaces.

Co-founder and lawyer, Sarah Mateljan, was able to see the significant risk and potential cost to SMEs who fail to run formal compliance training:

We’ve listened to our customers and we know it’s hard for them to find engaging and legally compliant training content on a budget. Our new suite of compliance courses solves this problem by providing interactive, legally authored online training on-demand. Our customers, such as ECOYA are well placed to make this move as they are more agile than larger enterprises, and can more easily adopt new technologies to solve problems.”

The CourseGenius compliance courses were exactly what I was after. I oversee manufacturing where compliance and training is of critical importance. Being a medium sized business, we are good at implementing practical training elements however this not always reflected on paper. If I had to create the program myself, not only would it take me two or three days to prepare the material but I couldn’t be entirely sure that the content is correct and current.” 

Further Information

To sign up for a demonstration visit CourseGenius.

When you start your own business, reading a lot of information about the necessary legal documents is par for the course.

But after a while, everything you read can seem to be involved in a conspiracy of conflicting advice and excess browser tabs. Leaving you with no clear answers and a serious case of decision-making fatigue.

We heard your pain. We took it hostage. And converted it into a little video on the main legal documents you need to get your startup venture off the ground.

Key Legal Documents:

Although dealing with the legal side of your startup can seem like a daunting task, it doesn’t have to be.

Tackle your legal documents early and they will continue to protect you and your business as it inevitably changes and grows.

Watch us put the squeeze on QuickLaw! Subscribe to BucketOrange Magazine’s Youtube Channel.

Further Information

To contact a legal professional who specialises in small business and startups visit:

• LegalVision; or
• Ph: 1300 544 755

While previous generations have prided themselves on maintaining job security, a stable income and working up to executive-level positions, unlike any generation before them, Millennials place a high value on independence.

We are wary of working in stagnant jobs with little variety or flexibility. After, perhaps, observing family and friends toiling in unfulfilling roles in a fluorescent-lit cubicle (nb: no one looks good in fluorescent light), we want to innovate by breaking the traditional career mould.

We crave the occupational freedom to create something meaningful and unique. In a recent study of Millennials in the workplace undertaken by Bentley University, 67% of surveyed participants described their career goals as starting their own business.

One of the most important criteria for establishing a successful business is to set it up the right way, in accordance with relevant legislation in your state or territory.

Say you have an amazing business idea to open your own boutique cafe! You have found excellent premises to open up shop and all that stands in the way of your thriving new venture is your landlord, and negotiating a favourable commercial lease for the premises.

The following tips will help you prepare for your meeting with your new landlord or leasing agent and put you in a position to confidently negotiate your new lease.

1. Rent

Do your homework. What are the rental costs like in the area of the premises you wish to rent?

It is handy to work on a costs per square metre basis.

Keep in mind that GST will usually be payable on top of rent.

2. Rent Review

A Rent Review is either of the following options (or sometimes a combination of them):

• Consumer Price Index Increase – CPI reviews are usually carried out once per year;
• Fixed percentage increase (for example, 4% each year); or
• Market review – ensures the rent you pay is consistent with current market rates. Market rent reviews are based on the rent paid by tenants in similar properties in the surrounding area and influenced by demand for similar properties. These reviews can be carried out by your landlord, a property valuer or estate agent.

From the perspective of your landlord, the rent review is an integral element of your commercial lease. It means that your rent will be reviewed at specified intervals and makes sure that your rent aligns with current market rates.

Make sure you aren’t paying too much. Over the course of a five-year lease, fixed price increases of 5% a year can see your rent increase 25% over the term of your lease.

3. Term Of The Lease

The length of your lease agreement is something you will need to negotiate with your new landlord. You may wish to sign a long-term lease to secure your premises, however, there are advantages and disadvantages with this approach.

One of the main benefits of a long-term lease is that it provides you with security, the ability to build up your business and to make it a saleable asset.

A potential disadvantage is that if the term of your lease is too long, and you expand your business, you may outgrow your premises.

Write a business plan so that you are confident of where you want your business to be in 5 years time. Is the current location temporary until you can find the capital to expand? Or do you have plans to develop the business operations from the same location?

By asking yourself these simple questions you can be sure that the length of your commercial lease is right for your circumstances.

4. Will You Need To Fit-Out The Premises?

Do you need to provide the necessary equipment to run your business from the premises, such as final decorations or fittings? If so, what is it likely to cost?

Sometimes your landlord will either pay for the fit-out or provide a combination of a lease incentive payment and/or rent-free period to assist with the costs of your fit-out. The most common lease incentive is a contribution by a landlord to whole or part of a tenant’s cost of fitting out of the premises or the provision of a rent-free holiday or a rent discount period.

Make sure you consider these hidden costs and ask your landlord for a lease incentive payment and rent-free period.

5. Permitted Use Of The Premises

When negotiating your lease agreement you should be aware of your proposed use of the premises.

Negotiate your permitted use to be as broad as possible to account for the fact that in the future your business may diversify, or you may want to sublease some of your space.

Without a broad permitted use of your premises, this may not be possible unless the lease is varied.

6. Assignment And Subletting

It is important to ensure that your lease allows you to sell your business and assign the lease. Assigning your lease means that all rights you have over your premises may be transferred to another party. This will be important if your business expands or you wish to move premises for other reasons.

You should also make sure that your lease allows you to sublease part of your premises. Subletting allows you to lease all or part or your premises to a third party, rather than your landlord, during a period of the unexpired balance of your term of occupancy in the premises.

Most landlords will allow this, subject to several conditions.

7. What Are The Outgoings/Operating Expenses?

The reference to ‘outgoings’ in a commercial lease usually refers to increases in taxes and rates that may include the running of the physical building where your premises are located. Generally you will not be responsible for paying outgoings, unless this is specified in the lease agreement.

If your landlord is passing on the outgoings (or operating costs) to you, and is charging separately for these services, negotiate a fixed-fee or cap on the amount.

Also, make sure your landlord is transparent and discloses these expenses to you before you enter into the lease.

8. Alterations Or Improvements

Most leases state that a tenant cannot make any changes or improvements to the premises without your landlord’s approval.

While sometimes a landlord’s approval is a formality, the approval is still conditional and subject to your acceptance that:

• all work is undertaken by a licensed and approved contractor
• you must extend your own insurance to cover all improvements
• you agree to make restitution for any damage incurred when removing the improvements (if mutually agreed – to restore the property to its previous condition).

What happens with the improvements at the end of your tenancy should be clearly documented and understood by you and your landlord.

Ask for a clause that gives you permission to complete particular work, for example, if you require a fit-out of the premises with your landlord’s consent.

9. Make Good And Refurbishment

A make good clause is common for commercial lease agreements. It requires you to make sure that the premises are returned to your landlord in the condition you found them.

Some leases only say that you must return the premises in the condition they were in at the start of the lease. Other leases can be onerous and impose redecoration obligations that extend to re-painting and re-carpeting premises.

Make good clauses can have some hidden lurks, so it is important to carefully check the terms of your lease agreement and raise anything you are concerned about with your landlord prior to signing.

10. Costs

When negotiating your lease agreement, make it clear who will pay the lease preparation costs.

Ideally, each party should bear their own costs. In the case of a retail lease, Retail Lease Legislation in each state and territory prohibits your landlord from passing on these costs to you.

There is no such restriction in commercial leases, and all prospective tenants should be aware of this.

Conclusion

Like most things in life, starting your own business is not hard when you know how.

Branching out on your own entrepreneurial venture is less daunting when you understand how to avoid potentially costly pitfalls and where to find professional help.

Renting a commercial property is a business transaction, and you should make the decision to enter a commercial lease agreement carefully and with professional assistance. The cost of your business lease is likely to be one of the biggest overheads you have.

Have you started, or dream of starting, your own business? Tell us about your startup experiences in the comments section below!

Further Information

To get in touch with a legal professional specialising in commercial leases visit:

• LegalVision; or
• Ph: 1300 544 755