Entertainment, food, drinks and travel – all of these fall under the broad umbrella of the hospitality industry. No doubt, the hospitality industry is big and often, buzzing. As long as people want to be fed, entertained and taken care of, there will always be a need for hospitality. 

As fun and promising running a hospitality venture might sound, there’s a lot of different things to consider. Whether it’s a small corner cafe or a large scale hotel, managing a hospitality business correctly is no easy task. That’s why some business owners like to call in reinforcements in the form of hospitality consultants. 

A hospitality consultant uses their experience and expertise to advise hospitality businesses to better their business. If this sounds like something you might be great at then starting a hospitality business might be for you! 

Before you start helping other businesses though, let us walk you through the legal considerations for getting your hospitality consultancy business started. 

What Is A Hospitality Consultant?

A hospitality consultant is someone that has a strong background in hospitality. They provide their valuable advice to other hospitality businesses. Remember, hospitality is a pretty broad industry, so most hospitality consultants might focus on a niche area. For example, a consultant that is well-versed in food and drink, may offer their services to restaurants and cafe owners only. 

How To Become A Hospitality Consultant 

There’s no strict code on how to become a hospitality consultant. Instead, it’s important to have the right knowledge and experience. If you’re interested in pursuing a career as a hospitality consultant, consider obtaining the right qualifications from the industry and gaining relevant work experience. Remember, a consultant doesn’t give general advice a business owner could find elsewhere. Rather, their expertise allows them to provide high level, expert advice. It’s important to make sure you’re able to meet this standard prior to becoming a consultant.  

Where Do I Begin Starting My Hospitality Consulting Business?

One the first steps to starting your hospitality consulting business, is taking the time to research and plan your business. Even if you feel like you’ve got everything sorted in your head, it’s always better to write it all down in a Business Plan. That way, you’ll have something you can always look back on that will keep you ontrack. Plus, when everything is written down in one place, it’s much easier to identify your business’s strengths or weaknesses and work them out.   

How Do I Register A Hospitality Consulting Business?

After you’ve established your plans, it’s time to set them in motion. The first step to doing this is picking out a legal structure for your hospitality consulting business. When deciding on a structure, you will usually be choosing between a sole trader, partnership or company legal structure. Each of them have advantages and disadvantages, so keep reading to learn more about them. 

Sole Trader:

The name gives it away – a sole trader is the only owner of the business. The main advantage of setting up as a sole trader is that it’s quick, fast and easy. The disadvantage is, you alone will be responsible for the entire business. As a result, the liability will fall on you.

To register your hospitality consulting business as a sole trader, you just need to get an Australian Business Number (ABN) which can be done online. Make sure to apply for any relevant taxes while you’re there. If you’re using a name that is different from your personal one, then you will also need to register your Business Name

Partnership: 

If you have a business partner that you’re working with, you might look at setting up as a partnership structure. Like the sole trader structure, the partnership structure is quick, fast and easy to set up. Then again, the liability of the entire business falls on the partners. As a result, it can be a little bit of a risky business model as compared to the company (see below).

If you decide to set up as a partnership structure, you’ll need to get an ABN for the partnership online. You will also need to put together a document called a Partnership Agreement which cover things like management, profit share, dispute resolution and the process for leaving the partnership. 

Company: 

Registering A Company is a little more expensive and complex. However, we consider it to be the preferred structure for anyone operating a serious hospitality consulting business. The way a company works is that it’s a it’s a separate legal person to you. This means that while the company may have liability, you or your business partners will be protected from liability in the event that there’s any kind of issues with the business.

In order to register a company, you need to work out who the shareholders and directors will be, register with ASIC and pay some fees. If this is something you need help with, it’s best to get the assistance of a legal expert to make sure everything works out perfectly. 

The choice you make about your hospitality consulting business’s legal structure will lay the foundations for your business, so it’s important to make sure it’s a well-informed choice. To learn more about business structures, you can check out our helpful guide here.

Do I Need Any Legal Documents For My Hospitality Consulting Business? 

Legal agreements are one of the main instruments you’ll need to use to protect your hospitality consulting business and ensure everything runs smoothly. The exact legal documents you will need are going to depend on your specific business operations – one of our legal experts will help you figure all that out. 

We’e compiled a general list of the kind of legal documents a hospitality consulting business might require. 

Consultancy Agreement: A consultancy agreement is the main legal document your clients will sign before you begin business. The agreement sets the tone for your relationship with them, and covers important matters like scope of work, payment, responsibilities and termination.

Non-Disclosure Agreement: As a business owner, there are certain matters you’ll need to keep private. In order to protect your business’s information, having an NDA ready is important.   

Privacy Policy: If you’re going to have a business website, then a privacy policy is important. If your business collects personal information from its users, you’re legally obligated to have a privacy policy in place. 

Business Terms and Conditions: When others interact with your business, it’s important to set some ground rules. Terms and conditions can help do this, while protecting your liabilities and ensuring you have control where necessary. 

Cookie Policy: Unlike a privacy policy, a cookie policy isn’t necessarily legally required. However, it can help promote transparency with your online community, which is always a plus. 

Any Other Legal Considerations?

As you might have figured out by now, the law plays a pretty vital role in business matters. Therefore, when you start your hospitality consulting business, it’s of utmost importance to be aware of what regulations might affect your business. We’ve addressed a few key ones below.  

Australian Consumer Law (ACL) 

When you’re dealing with clients, it’s important to understand that as consumers, they have rights under the ACL. As a business, it’s your legal duty to uphold these rights and ensure your conduct is in line with the ACL’s standards. Generally, the ACL requires transparency, fairness and honesty. Even with the best intentions, mistakes can happen. In order to avoid this, it’s important that you properly understand your obligations under the ACL so you can fulfil them with confidence. 

Data and Privacy 

We mentioned having a privacy policy in place (see above) however, as a business there might be other data and privacy regulations you will be subject to. For example, if you’re going to be storing information about your clients on your database, then you may need to take steps to secure and maintain their privacy. Legal instruments like a Data Breach Response Plan might come in handy. 

Intellectual Property 

It’s also crucial to be aware of your intellectual property (IP) legal considerations. Your hospitality consulting business’s IP might be one of its most important assets. For example, you may have a logo or business name you’d like to Trade Mark or resources such as presentations and original strategies that are copyright material. In which case, you’ll need to look into getting an IP Licence. Securing your IP can save you a lot of trouble down the line, so it’s best to get it sorted ASAP! 

Next Steps 

A hospitality consulting business can be a great new venture, just be sure to secure your business with the right legal protections. To summarise what we’ve discussed: 

  • Hospitality consulting involves providing advice to hospitality businesses
  • Qualifications and relevant experience are important for consultants
  • Start by researching and creating a business plan
  • Choose a legal structure for your consulting business: Sole Trader, Company, or Partnership
  • Each legal structure has different implications for liability and registration
  • Legal agreements are crucial for your business, including Consultancy Agreement, Non-Disclosure Agreement, Privacy Policy, Business Terms and Conditions, and Cookie Policy
  • Consider legal regulations like Australian Consumer Law (ACL), data and privacy laws, and intellectual property (IP) protection
  • Compliance with ACL standards is important in dealing with clients
  • Data protection measures, including a Data Breach Response Plan, may be required
  • Legal guidance may be needed to navigate the complexities of starting a hospitality consulting business

If you would like a consultation on how to start a hospitality consultancy, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

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