Going into business for yourself can be daunting as you don’t know what you don’t know.
Whenever we have new clients going into business for the first time we recommend some simple things to consider which will help keep them on track. We also check off on this with existing business owners when they come across to us to make sure they aren’t missing any of these strategies:
·Get set up right from the start – the wrong structures can be extremely expensive over time as you grow or if anything goes wrong in the business so plan ahead so it doesn’t cost you more to fix later.
·Have the right banking such as bank accounts,credit cards, finance for your business and use those accounts for all business related costs so none are missed.
·Get the right insurances in place – these are your first line of defence should something go wrong so it is important you are covered and for only the right things.
·Get the right accounting software in place –this isn’t just about getting the information that the tax man needs, you want a solution that suits you and your business so you can use it to get professionalism and efficiency in your business.
·Treat cash as king – the key reason businesses fail is cash flow so be careful with your cash and don’t commit it unnecessarily (i.e. buying larger assets with cash rather than finance) – you might have the cash available but is there something else coming up that will require that cash later and leave you caught short.
·Know how much to put aside for taxes (and do it)– think about GST, PAYGW & income tax so you aren’t falling behind with the ATO. When you are in business the ATO will ask for taxes in lumpy amounts which can cause a lot of problem for your cash flow and is the reason a large amount of businesses fail. Putting the funds aside as you go takes the pain out of that.
·Consider your personal insurances – if you are the director of your own company then you are no longer covered by Work Cover unless you get a special, more expensive policy taken out. So if you get injured and can’t work then how will you manage financially – your personal insurances including income protection become so much more important at this point.
·Know what to put aside for super – being your own boss means there isn’t an employer putting super away for you anymore. So that you don’t fall behind you should make sure to be doing this for yourself.
But the real key is you. Know and understand your business. Know what you need to consider and adhere to specific to your industry and circumstances. Know what the key drivers of your business are. Know howto read and understand your numbers. Know when to be checking in with us for not only compliance but also advice to keep pushing forward.
Experience always helps and it becomes easier over time but it is always so much harder without the right support and advice to make sure you on the right track.