Whether you’re keen to start monetizing a passion project, or want to finally escape office politics and run your own show, here are four issues that regularly trip up new business owners.
Starting your own business is an exciting time. However, for the unprepared, it’s fraught with uncertainty and risk.
Here are four of the most common new business hurdles you need to overcome.
1. Keeping records of everything
When you’re an employee, everything is taken care of for you. Jenny from payroll looks after your salary, Tom from IT keeps your data safe, and Ken from HR, well, no one really knows what Ken actually does.
The point is: you now have to become a master multi-tasker, and establishing a meticulous record-keeping regime from day dot is vital.
Hanging on to all physical and electronic evidence of income and sales, as well as expenses, will make your life much easier long-term.
We can help you establish a best-practice record-keeping system that will track your growth and ensure you’re able to explain every transaction to the Australian Tax Office (ATO).
2. Choosing the right business structure for you
Would you prefer to operate as a sole trader, a partnership, a company or a trust?
Each one affects not only the amount of tax you are liable to pay, but also your level of asset protection, ongoing business registration costs and how you might deal with your customers.
If you do a variety of work and are unsure of which structure is best for you, we recommend you come in and talk to us about your expectations.
3. Reporting and paying tax
Ensure you know how you’re going to pay tax before you lodge your tax return. After all, no one enjoys being stung by bill shock.
If your business needs to be registered for GST (if its annual gross income minus GST will be $75 000 or more) you’ll need to lodge a business activity statement (BAS) each quarter.
Your BAS makes it easier to report and pay GST, PAYG installments and withholding tax, as well as other taxes, but it must be lodged on time, and quarterly.
4. Hiring people
Most of us have worked in an office with a great team dynamic before. There’s also a lot of us who know just how toxic work environments can become.
The staff you hire can make or break your business, so it’s crucial you make sure you get the right people onboard.
But that’s just the start of it.
You also need to get yourself up to speed on the legalities around contributions to employee superannuation funds and any other payments that attract tax.
If it’s the first time you’ve hired anyone, register for PAYG withholding so you can withhold tax from your employee’s wages straight away.
To discuss any other taxation and registration requirements for your new business, feel free to call us to book an appointment today. We want to see you succeed!
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.