7 Things to Ask Yourself When Starting Your Own Business

So you want to start a business. Maybe you’re a tradie looking to branch out on your own, or maybe you’ve always wanted to start a little café. You’ve gone ahead and registered for an ABN, and you know that you have to prepare a quarterly business activity statement (BAS). However, there are a number of other important things to think about when starting your own business. Here are a few important questions to ask yourself.

1. Do you need to register for GST? Simply put, you will need to register for GST if your business will generate an income exceeding $75,000, not including any GST you charged. You also need to register for GST if you would like to claim a fuel tax credit.
2. Can you claim fuel tax credits? If your business involves operating any heavy machinery, such as for construction or agricultural use, or traveling on roads with heavy vehicles, you will be able to claim fuel tax credits. Beware though: there are very specific rules around fuel tax credits so it’s worth checking the ATO website or consulting with professionals to make sure that you are claiming the correct amount.
3. Do you need insurance? There are a variety of insurance options that can protect you as a small business owner. If you are a tradie, public liability insurance is important—this will protect you if you are found to have caused damage to a third party or their property. Income protection and business interruption insurance are also available and good to consider.
4. Do you need a trade contractor license? If you are a tradie, the answer is most likely yes.
5. Do you have employees? If you do, there are a few important steps to take.
   1. Check the appropriate award amount on www.fwc.gov.au.
   2. Set up Superannuation—a great way for small businesses to do this is through the Small Business Superannuation Clearing House.
   3. Get yourself set up with worker’s compensation insurance—this is mandatory for most employers.
   4. Make sure you understand the difference between an employee and a contractor. Often, businesses make the mistake of hiring someone as a contractor, when that person should really be classified as an employee. Your obligations as a business are different depending on whether you hire an employee or a contractor, so it’s important to know the difference.
6. Do you have a budget? Cashflow management is often overlooked by small businesses that are starting up. While it can be tempting to simply spend based on whatever is in the bank account, you might find that there isn’t enough there when you have to pay important expenses. A little bit of planning now can save you a lot of grief later.
7. How will you maintain your business records? We get it: bookkeeping can be tedious. If you’re a tradie, sitting in front of a computer sorting out your invoices is probably not something you enjoy. However, there are a number of ways now to make bookkeeping more streamlined and less painful. For example, online software such as Banklink and MYOB Essentials can greatly simplify the process and reduce the amount of time required from you AND your accountant. Remember: good bookkeeping is a must to claim all legitimate tax deductions.

There are a lot of things to consider when starting a new business, so make sure you check resources such as the ATO, the NSW Office of Fair Trading, and the Fair Work Commission. If you ask yourself the questions above though, you’ll be well on your way to getting yourself set up properly.