Why are so many people leaving their employee style jobs and going it alone?
Can be for a variety of reasons but the main focus is to be your own boss and take control of your own financial destiny. This sounds great in theory that’s for sure.
I do offer some caution.
Treat this big decision with great care before quitting your job and diving straight into your own business.
Most important advice I give clients is that, it’s a lot harder than it looks or you may think.
On saying that however, don’t let me discourage you.
With the right amount of preparation, a solid business product, skill set, solid planning, execution and a real passion and desire to do well it can be one of the most rewarding and wealth accumulation decisions you can make.
Have a read of this CBA article to get a few basic ideas to give you an indication of what financial resources you may require to set up and calculating an annual income.
I can get you up and running with an ABN and an online accounting system for $330
Remember a good business idea does not guarantee its success.
How to setup a successful business structure.
The other big decision is what type of business structure I will require to get started. The common initial form of business structures are sole traders (your own ABN), partnerships, trusts and companies which are there own legal entity.
If you are just starting up I strongly advise to begin as a sole trader.
This is the simplest and cheapest option. Basically you register your own ABN, whether in your name or the business name. Then set up a business bank account.
Keep track of your income and expenses and calculate your business profit which is taxable income.
This is the most cost effective start up structure.
If your business really takes off it can be converted into a company further down the track.
Do you feel you have ticked all the boxes, or if you require further clarification on any matters in going it on your own feel free to contact me and we can kick start you into action.
This is a big decision, therefore do the necessary diligence.
My fee to get your started with an ABN, business structure, some useful record keeping templates starts from $330 depending on size and structure.
I am passionate about helping small business. You will find me a vital asset into transforming your idea into a real business success story.
The doors are open – what do I do now?
You are all setup ready to go (or you maybe already operating).
One of the most important steps to running a successful business is the structure in which you operate.
Too many times I have had new clients come to me who are doing well in the own business but feel like they are basically working harder and longer than ever before and are broke.
So what goes wrong then, how did it come to this?
The business has a lack of planning and structure. It usually arises from poor cash flow management, i.e. spending more than you earn, recording keeping, tax, staff and legal obligations, just to name a few.
These nasties sidetrack you from what your business focus needs to be, generating income activities.
No wonder why it can feel like a vicious cycle. No enough time in the day to get everything done. Meanwhile the bills keep adding up and you slip even further behind.
The key is to get it right once the business is formed. Get into good business habits.
Don’t panic if you think it’s too late, a fresh set of eyes and ideas with a few simple changes may just do the trick.
I can lodge your annual BAS and tax return from $330 depending on the size of your business
The first step – Commitment
Total commitment is what you must have to yourself on ongoing successful business.
Dedicate the time, effect and passion required to bring your creation into reality. Forget long booze lunches, working half days, having long periods off.
You are now the boss, take ownership of what you have and give it a real go.
Plan you day, your week, month, and year. Allocating enough time not only to get the work done, but to make sure your basic record keeping is accurate and up to date.
Make some strategic time on how you can improve your business. You would be surprised how little actually do this, set yourself apart and get ahead on that treadmill.
Try not to leave things to the last minute if you can avoid it.
That’s when mistakes happen which I guarantee you will create higher stress levels than working for your old boss. .
You don’t know what tomorrow brings, stay on top, and feel good.
Remember action breeds action, stay active.
There will always be something to do. If you don’t have the time or skill then pay someone to get it done.
Next is your – Getting into smart business habits
Once you have your ABN, set up a separate bank account you are ready to go.
Note this bank account is not for you groceries or general living expenses. This is for business income and expense transactions only.
Get into this habit from day one, or adopt this to make your business finances simple yet efficient.
Important tip, banks will need this as well if you ever require business finance down the track.
Record keeping, whilst this seems to be the bug bear for most business owners it is absolutely critical.
Whether it’s a hand written cash book, excel spreadsheet or accounting software, this needs to be part of your business heartbeat, so embrace it.
Anyway, believe it or not it comes in very handy to see how much money you are making after all, remember that’s why you are in business right?
Stay focused and keep it up to date. If you can’t, pay someone else to do it for you.
Your business will simply become a stress machine if this falls behind.
Invest in Accounting Software
I have found Xero to be a real asset for small business.
It’s virtual accounting software that runs from all your devices and is very simple.
Quite a few of my clients have started or converted to Xero and are very happy with it.
I can also monitor it for you to keep track of how your business is trading and help out with any questions that may arise. Tax time and BAS deadlines becomes a breeze.
I’m sure you would much rather that than putting out your bag of smelly old receipts and start adding them up the night before it’s due, could think of nothing worse..
Make sure you contact me and we can set you up with a really solid, easy to operate and effective accounting structure to ensure that part of the business runs smoothly.
Know what is your business exposure (tax, GST, running costs etc.).
A common question I get some from first time business owners is how much tax/gst will I pay, and how and when do I pay it ?
Now that you are your own boss you now have to pay your own tax, and if you are registered for GST lodge a quarterly or annual BAS.
A huge trap for small business is to spend the GST they have received and not set aside any funds for future tax obligations.
It can be a real downer and put you in a terrible financial situation if these areas are not well managed.
My simple solution for clients is to set up a second bank account for tax and GST.
Most banks offer a GST offset account which will also earn interest. The average small business owner should put 15 – 20% of revenue for income tax and 5 – 10% for GST (depending of the type of business).
As I have stated, it is critical to be disciplined with this, make it a regular habit (weekly/monthly) to transfer that % of your turnover into the offset account.
Remember this is not your money and it’s your legal obligation.
GST and tax will be smooth and effortless experience, doesn’t that sound good.
I can lodge your quarterly BAS from $150
You are in control of this, so make it happen and free up valuable time to do what makes you happy, enjoying your business life and making truckloads of money.
A few other points to remember.
Make sure your insurances are relevant and up to date.
Don’t make assumptions, check your monthly mobile and internet plans; you don’t need any expected blow outs here.
Keep your receipts nice and safe, you will need them for 5 years and can be audited at any time.
In regard to the income of your business, trust your product or services that you offer, don’t sell yourself short or under value your work.
This will attract a whole lot of clients that will always be trying to get things on the cheap.
Set the right price the first time.
You will feel good and provide the best service you can to your client. Watch put those hidden costs when doing your pricing, factor in a % of all running costs of the business, not just material costs?
Be aware of this when obtaining finance.
The lending institutions are very strict these days. They will want to view lodged returns, assessment notices, accounting records and financial performance. You must have this in order in be given the opportunity for loans and mortgages.
Note if these spreadsheets are too simple for what you require, you need to upgrade to an appropriate accounting system, i.e. MYOB or Xero.
Keeping these tips in mind will get you off on the right foot and allow you the opportunity to establish and operate a long term successful business.
Support it, nurture it, love it and it will provide you more than that back.
You have been running and operating your business for a while, it’s going well so far, so now how can you improve it
I really enjoy having this conversation with clients.
The business is going well, the work has been hard, but it’s been worth it.
Success might not necessary be measured by how much money / profit you make.
You love being your own boss, accept that you have decent amounts of time and money to enjoy your life.
The business has provided you a lifestyle you are comfortable with, without necessary rolling in the dollars. Importantly, you still enjoy it.
A simple definition of a success business is the way you feel, if it makes you feel good it will be successful.
Don’t get suckered into what others may think, or how similar businesses to yours are doing, you will never really know anyway. Stay focused on your business and continue its success.
You may want to start growing your business further, increase marketing, employ more staff, set up other offices.
I consider this to be a major step for small business.
You really need to plan and execute this strategically and with diligence. I have seen in some cases this just about wipe out small businesses due to poor planning and inflated expectations of these changes.
Business should be an organic model with organic growth.
The fly by night usually does just that, fly’s high short term then crash and burn. You have worked hard to get it to where it is, don’t throw it away. Seek professional advice.
Believe it or not, the biggest problem I have seen it that when additional staff are employed, and the business owners drop the bundle, a sense of not having to work at hard.
Be very mindful of this, it’s a trap. In most cases when adding staff you will have to work harder especially in the short term.
If you are considering some growth strategies, contact me and let me know what you’re thinking, I can give you unbiased advice and prepare you for what to expect. Bring it on.
Check out my Where your is your business at page if you are looking to take the next step
Sometimes owning your own business is just too hard, and this is ok as well. There is no shame in selling or closing it down so long as your financial obligations are satisfied.
The worst thing you can do it hold onto it, having debt up to your eye balls just to keep to running.
If this is the case, look at get out strategies before you risk losing all your assets. Go back to the security and less responsibility where you know you get paid and start moving forward again.
So you may have gathered by now that I am passionate about small – medium businesses.
After all, I have owned my own businesses now for over 15 years. I know what it takes, the good times, the tough times and the real times. Don’t be a stranger, let me help you.
A standard small business tax return will start from $330 (Inc GST) I can provide you a personalised quote before proceeding.
Setup ABN and implement online accounting system $330 (Inc GST)
Lodge quarterly BAS $150 (Inc GST)
Create a business plan and forecast with quarterly reviews and all tax obligations $880 (incGST) Annually
Keeping in mind, a small business can range from a one man show with a small turnover, to having multiple staff and turnovers > $1,000,000 so the fee will range accordingly.