The idea of starting a business appeals to many people for a variety of reasons. Often, those considering a company believe they will find freedom and wealth as a business owner.
For those employed in the trades, starting a business is a traditional thought. Many tradies spend their apprenticeship dreaming about becoming their own boss.
As exciting and gratifying the idea sounds, budding business owners must remember that a great deal of know-how and general knowledge is necessary to start a company and see it last long enough to succeed.
In this guide, you’ll learn 7 important steps you must take before you start operating your trades business.
1. Decide on the Type of Business You Are Building
Generally, many tradies opt to start out as sole traders If you plan to operate your business as anything other than a sole trader business, please consult professionals for advice.
There are several advantages and disadvantages to beginning your business as a sole trader:
Sole Trader Advantages
- Easy to set up and run
- Few conditions of reporting
- You have total control of business decisions and assets
- You are not an employee and not subject to payroll tax
- You can use your own tax file number
- Restructuring is easy
Sole Trader Disadvantages
- Unlimited liability
- Tax planning can be difficult
- All of your personal assets (and jointly owned assets) are at risk
2. Get a License if Necessary
Many trades require licensing, but the requirements differ from state to state. You will need to know what license you must have as well as the existing conditions you must meet to qualify for your license.
3. Sign Up to Get You Australian Business Number (ABN)
The ABN is the 11-digit number identifying your business to the Australian government. You will need to register an ABN prior to naming your business.
4. Name and Register Your Business
If you plan on using your name for your business, you do not need to register it. However, before naming your business, take a few moments to check and see if the name is available not only as a business name but also as a trademark and a domain name.
5. Register Your Business for the Goods and Services Tax (GST)
If you anticipate that you will do less than $75,000 a year in business, you do not need to register for the GST. If you expect your revenue to be over this figure, you must register for GST.
6. Begin the Work of Marketing and Branding Your Business
While you do not want to sink a considerable amount of capital into this area of your business, skimping here can be costly.
Exactly how much is enough for you depends on your business as well as your connections. If you are a painter and expect to get most of your business from other tradies, you may not need to put much time, money, or effort into the area of marketing or branding.
However, if you are starting an electrician’s business, you should consider putting effort into your marketing, so you stand out from the pack.
If you will be doing marketing on your own, here are a few basic necessities to get started:
- Register your domain name to match your business
- Design a logo or have one professionally designed
- Print your business cards, and if you like, stationary with a company letterhead
- Create a website. It is possible to make a basic website yourself. However, a professionally designed website gets more attention and generates more leads.
- Build a social media presence. It is worth the time and effort to make business pages for Facebook, Instagram, Twitter, Google Ads, or LinkedIn. Be sure to pay attention to your social media accounts and interact.
7. Get the Proper Insurance Cover
It is not possible to overstate how crucial good insurance cover is to a sole trader.
Remember the unlimited liability means just what it says. You are held liable for anything that happens as a result of your business. Your business and personal assets are on the line, as you can quite literally lose everything if you are not insured correctly.
Work with an experienced expert in the field of insurance for tradies, such as Tradies 365, to be sure your cover is right.
Note: The facts and data presented in this blog post are for informational use only. The information is an overview of the procedures necessary for starting a business and is not complete or legally binding. Please seek guidance from a licensed professional as this blog post does not constitute legal advice.