Everyone wants to be a business owner, capitalising on cash flow and quantum leaping into the lifestyle that comes with being your own boss. However, whilst this may sound like the natural progression for many tradies, there is plenty to consider when making the bold step to go out on your own.
Employee to employer – where do I begin?
When you decide to make the move from employee to employer, it can almost seem as straightforward as choosing your name, registering it for tax purposes and getting a few tools together. However, the considerations required when starting a business are extensive and failure to comply with legal obligations can have adverse consequences on you and your business.
We’ve compiled a brief breakdown of the business fundamentals required to set up a successful and compliant business.
The first step is to develop a strong business plan. This should identify which business structure is most suitable, preempt any potential challenges and risks involved, and propose strategies to achieve the businesses goals. In choosing whether to be a sole trader, partnership, company or trust, we strongly recommend seeking professional advice as this will impact your tax obligations, paperwork, finances and personal liabilities, so it’s important to get it right!
Be sure to also consider equipment and machinery, cash flow projections, incoming expenses, potential software needed, your competition, marketing strategies and staff recruitment.
You are wise to seek the services of a solicitor in drafting your contractual agreements. This will affirm they are legally binding and relevant to your circumstances. Inaugurating the correct provisions to protect your business structure will set you up for success in your new venture.
The business plan should emulate your objectives, whilst conveying the reasons why people should choose your business.
Here are a few contracts to consider when starting up your own business:
Commercial trading terms and conditions
Service contracts (for independent contractors)
Liability waivers, indemnities & releases
Registering your business is the next step in bringing your plans into fruition. This includes registering the trademark name, any of the businesses intellectual property, GST and other relevant taxes. In choosing a business name, ensure it encapsulates the business personality and service offering. From this, you are required to obtain an Australian Business Number (ABN) and we recommend creating a new bank account for the purpose of managing business expenses and transactions.
Insurance is an imperative fixture of a secure and successful business and it is sensible to cover the business premises, equipment and machinery. Additionally, workers compensation insurance offers adequate provisions to protect your employees, whilst public liability insurance will safeguard you in third party damages consequential to the business operations. These are just a few of the legal obligations expected of new business owners. If you need assistance in any of these domains, contact our legal and accounting team for professional advice.
Once you have mapped out the foundations of your business plan, it is important to forecast the financial prospects of your business through weighing up the expenses vs expected revenue. Be proactive in attracting sufficient capital to enable a smooth and successful business start up.
Connection and consistency – the keys to expanding your business
Building relationships and delivering quality service is the basis of growing your business. Through providing quality and reliable service and connecting to sub-contractors and customers, word of mouth will naturally progress your business. Review how your recent clients have located your business and recirculate the effective strategies, whilst amending the ones that aren’t evidencing profitable results.
Implement tactics specific to your target market through relating your advertising to your clients interests. Curate a compelling online presence, distinguishing your approach as the antithesis of your competitors. Staying up to date with the industry news, particularly through resources such as Australian Construction Industry Forum, will position your business as a trusted expert, consequently attracting new clients.
I’m a business owner – what now?
If you’re an expert in the trade but a novice when it comes to business operations, we can help. Not only do we provide extensive start up support for new business owners, but once you become an employer, we offer an array of services including bookkeeping, compliance reviews and taxation services, all within the one practice.
As an integrated legal and accounting firm, we believe this increases efficiency and value for our clients and gives you the tools to achieve success. If you have taken the intrepid action to go out on your own, rest assured that you’re never really alone with the support and expertise of our local professionals here at Greenhalgh Pickard.