Business Guide

For the New
&
For those needing to Review! 

1. Ask an Accountant to set up the specifics
I know - you want to just register an ABN and off you go - sure, in some situations, this could almost be enough. But…..do it the right way. The right way usually takes about a week and about $1000 for a Sole Trader, $2000 for a Pty Ltd Company or Partnership, and $4000 for a Trust (shop around and expect this fee’s as a reasonable offer unless your business is crazy complicated, then ok, it might be a bit more!) to get it all done right. Make sure you ask for a quote to include:

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• What kind of business should I become? Here’s a summary of the different structures from the ATO: 

  • Sole Trader - Simplest and cheapest structure to set up. Business is in your name and you are legally responsible for everything in relation to your business.

  • Company - Bit more setup costs, run by directors and owned by shareholders. Some asset protection, but directors are liable for actions and debts.

  • Trust - More expensive to set up. Trustees are responsible for the operation and can be a person or a business. Profits go to the beneficiaries

  • Partnership - Fairly inexpensive to set up. Multiple people share the profits and losses. Partnership agreements are highly recommended for clarity between partners later.
     

• Registrations for your
  ABN, ASIC, GST (if applicable), Payg (if applicable), and Creating a constitution - more info in point 2 for those who want to try to do some things on their own.
  
  It makes a world of difference if you can enlist an accountant to assist with this step. An accountant can weigh in as they know your specific circumstances. It is worth asking early, so you are set up beautifully from day one (and if you have already started, it isn’t too late to have someone fill in the blanks of what you’ve missed).

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• Looking for an Accountant? Type in your suburb and postcode in the TPB Register to get about a few hundred options. I suggest picking out around ten, google them, check their reviews, then send a few of them a request for a quote for the above - just copy and paste the same email to each of them, go with your gut (and the best price!)
  This website will ensure you find someone registered and not “Terminated.” And yes, you can search BAS Agents as well - like us! (put Polished in the company name field to try out a search!)

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2. Registrations for your business Some of these you can do on your own, especially if you already have a business setup, but you may need to modify/add to it. I suggest getting an accountant to confirm your plans first.

• ABN - Yes you need one, no matter the type of business

https://register.business.gov.au/

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• ASIC - This is where you reserve your business name and trading names. https://asic.gov.au/for-business/registering-a-business-name/#howto 

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• GST - The general rule is if your turnover is projected to be more than $75k in 12 consecutive months, you HAVE to be registered. If you think you’ll make less you CAN be registered. There are some perks to this if your expenses outweigh your income for the first couple of months...but your business does need to be active with the intention to increase income.

https://www.ato.gov.au/Business/GST/Registering-for-GST/ 

Second to this - understand if you are Cash Basis or Accruals Basis
https://business.gov.au/finance/accounting/choosing-between-cash-and-accrual-accounting 
 

• Cash Basis: GST obligations are based on what hits your bank account or your hand. If you pay a bill or a client pays you, then the GST is accountable. Usually smaller businesses - you can choose this method if your turnover is under 10 mil/year.

 

• Accruals Basis (or non-cash basis): Your GST obligations are based on what invoices to clients and bills you have based on the date of issue. Doesn’t matter if you’ve paid them/been paid - if they exist, then the GST comes into play. If your turnover is >10mil a year, you almost always must do this method.

 

Are you a business that gets to choose? Almost all businesses would choose Cash Basis. If you are on Accruals Basis - what happens if you adjust an invoice that was originally dated in the previous quarter or previous financial year? The answer is a bit of annoying math and cross-checking. What happens if your client delays payment quite extensively? Or never pays? The answer is you have already paid out that GST to the ATO and while you can claim it back in a future quarter usually, you have been out those funds and yes, once again, some math.

 

• Payg - If you have employees, you need to register for PAYG Withholding.

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• Create a Constitution - Usually just Pty Ltd/Companies https://asic.gov.au/for-business/registering-a-company/steps-to-register-a-company/constitution-and-replaceable-rules/ 

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• Address - what will your registered address be for ATO/similar documents that are mailed? Your home address? Your business? Your Accountant? The latter is often the case to give your home address a bit of privacy when you don’t have a business address - clients/suppliers can find out your registered address.

 

• MyGovID - honestly, it will be a bit finicky to set up, but do this and you’ll be sorted for basically forever. This will give you access to lodging your BAS, IAS, and reviewing previous lodgments and Income Tax lodgements, and more. https://www.mygovid.gov.au/set-up 

 

3. Get a Business Bank account

Armed with a bunch of personal IDs and the certificate from the ABR that you received when you got your ABN, and ASIC documentation, head to the bank. Stop using your personal bank account and get yourself a business account.
Trust me, please please please - get all your business income and expenses happening in one bank account.

Is cash flow still unstable? Transfer funds into your business bank account to cover expenses. You’ll be able to easily record these transfers as a loan to the business to track, which is so much easier than tiny transactions here and there purchased from the personal banks and credit cards - get it all under one roof!

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4. Do you need certification?
Sometimes it is only an extra plus to have “official” training and certification, but sometimes it is a must. Examples:

• As a bookkeeper running my own business, I must be a Registered BAS Agent - if I was an employee of a business, I don’t need to be, but in my own business or a subcontractor, I do. (Hint, hint, if you hire a bookkeeper as a subcontractor, ask if they are a Registered BAS Agent). 

• Most tradies need a Subcontractor License if they invoice more than 5k on one job/client at a time. Potentially further licenses. To get qualifications, usually, the certification programs are fairly quick. If you are just starting out, it is best to jump on to this quickly. Not sure? Call FairTrading and ask - they won’t bite! Or, ask for our guidance. Here’s a great link: https://www.fairtrading.nsw.gov.au/trades-and-businesses/licensing-and-qualifications 

 

5. Identify your services
List out all the services you want to offer. Now take your list and group it into categories. Why are you an expert in each? Your category is your heading, your expert reason is your subheading, and the following list is the details. 

 

6. Create pricing points
Check out your competitors, but identify what you do differently. Base prices on your time but also value added to the customer - especially if certain work requires someone with more qualifications or specific unique experience.

Keep it clear though - some businesses offer 20 different rates for all the different services, and that gets messy really quick. When possible, group similar services and give an applicable encompassing rate. It will make your life much easier!

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7. Identify your key clientele
Mind map it! Start writing down everything about your clientele, age, gender, background, what services do they use, where do they hang out, what do they have in common? Get it all down. Now you know who to advertise to. 

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8. Accounting Software
Yes, a BAS Agent is writing this list, so I am biased, but PLEASE set up an accounting software as soon as you can. Relatively low cost but oh my goodness they pay for themselves. Track your income and expenses in a flash, compare months with one click, and see who owes you, who pays you incorrectly, send quotes, process wages (when you get there), get correct BAS figures quickly, review your data for issues, access everything on a computer, phone or tablet. Here are a few suggestions - prices are current RRP, w/ payroll for up to 2 employees:

• Quickbooks Online - Lowest cost, especially with few to no people on payroll = @$47/month average

https://quickbooks.intuit.com/au/pricing/

• Xero - Easiest to use, lots of features: @$52/month average

https://www.xero.com/au/pricing-plans/

• MYOB - Lots of features. Well known. @$27/month for “Essentials” (very limited features, not usually recommended due to limitations and inability to upgrade), @$109/month for “Accountright”

https://www.myob.com/au/accounting-software/other 

Pick one, anyone - I PROMISE in the long run, this will make a world of difference for you, your accountant, and your business decision making. Also - if you choose one of the above, we can get you 10% off the RRP!

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9. Are your Tax Invoices correct?
Worst-case scenario - someone doesn’t want to pay you. What do you do? Small Claims Court, here we go! But, one of the first questions they ask is to prove your Invoices show all items required to be a legal document. If they don’t….well, it might be a short visit. What your invoices need to have:

You are registered for GST -

• Your complete registered business name

• Your ABN or your ACN

• The actual words TAX INVOICE

• An identifying number, ie 10526 or 2021-300 or whatever chronological number scheme you want to do

• The date the invoice was issued

• If the amount of this invoice is $1,000 or more, you need the customer's full name/business name, address and ABN (if it's a business) - the address and ABN are a bit subjective here, but having both clearly identifies the customer. Say your customer is Smith & Son’s - there might be a thousand companies with variations of this name out there. If you have their address and ABN, you have clearly marked this invoice is for that specific business.

• GST Inclusive Prices - a statement saying “All Prices are GST Inclusive,” and if your prices are excluding GST, then you need a subtotal, then a line amount of total GST, then the grand total

• Due Date plus How they can pay you

 

You are not registered for GST -

• Your business name

• Your ABN or your ACN

• The actual word INVOICE

• An identifying number, ie 10526 or 2021-300 or whatever chronological number scheme you want to do.

• The date the invoice was issued

• “GST Has Not Been Charged” clearly at the bottom of the invoice

• Due Date plus How they can pay you

 

10. How can you take payments?
Today, you have so many options, it is insane compared to not too long ago! Here are the basics:

• Cheques are annoying. They take ages to clear and then might bounce. I do not recommend them…but sometimes they are a preferred option for certain clients. Should the customer insist on paying by check, then I suggest getting a credit card on file as well and have in your Terms and Conditions that you'll utilize the card should a cheque bounce, or not be received with X days of the due date.

• Electronic Funds Transfer - It’s free, so it’s lovely. List your
  Bank Name - ie CBA, NAB, etc
  Bank Account Name - ensure exactly matches your bank details
  BSB
  Account Number
  Reference - likely your invoice number will make your life easiest. So many times I see people transfer funds with the bank reference as your business name (not the clients, but the person they are paying. I laugh, but I also cry ahah!). So say something such as:
  Thank you for working with us, please make payment by the described due date via Electronic Funds Transfer:
  Bank Name: Commonwealth Bank
  Bank account name: Business Name
  BSB: ### ###
  Account Number: #### ####
  Ref: Invoice Number

• Cash - highly recommend you deposit exactly the amount you received. But if you don’t, make sure you record somewhere what invoice it applies to and keep your receipts should you use the cash to make purchases.

• Credit Card - Lots of options!

  • Online - there is Stripe, Eway, Paypal, and many others. Personally, Stripe is my favorite currently, but check out the fees and decide for yourself.

  • In-person - 

    • Bank Terminals We have all seen those giant tablets or card machines with a bank insignia on them. For a shop with lots of payments, probably worth the rental fees/costs, but really check what all the fees are for the bank you are interested in. Ask for a free monthly rental for a couple of months or a discount for the first 12 months - no harm in asking!

    • Tyro & FiserV are the big ones for retail shops with multitudes of transactions
      Tyro has been around for a while and used to be our primary recommendation but they had a serious fault in Jan 2021. This particular issue is likely not to reoccur, but it was a big problem for many businesses for many days. 
      FiserV is new to the scene in Australia and has come in swinging with low fees. I’m on the fence currently, but it has been vetted by RetailExpress, a pretty well renowned POS system, so likely they will be a big competitor for Tyro.

    • If you receive only a few sales by card, check out Square. You can order online or go to Officeworks and start accepting card payments within the hour. The fees are medium, but the convenience is unparalleled. There are a few products, but the main options for smaller businesses are
      1. Square Reader + Square Dock + your phone or tablet to link to, or
      2. Square terminal (all in one).
      You do need decent wifi with either.
      
      There are other options, so have a Google and compare!
       

11. Employees
There’s so much we can talk about here, but to get you going:

• Collect the correct details and store them securely. (We have a template if you need one!)

• Identify Casual vs Full Time vs Part Time vs Subcontractor

https://www.fairwork.gov.au/employee-entitlements/types-of-employees/casual-part-time-and-full-time 

• Supply them with:

  • A contract (a proper one!)

  • Fair Work Information Statement

  • Policies & Procedures + Standards, Rights and Responsibilities/Code of Ethics

  • Their role description

  • Superannuation Standard Choice Form

  • Information Reference sheet - where you get them to put their full name, preferred name, address, phone, email, bank details, super details, emergency contact details, allergies, certification details, and other important info all on a one-page form (ask us for a template!).

 

12. Setup a Facebook and Instagram account

• Now.

• Like right now.

• I’m not kidding! Go do it!

I don’t care if you post anything yet, but reserve the accounts RIGHT NOW. So that 1. Someone else doesn’t take your name, as well as  2. You’ve got some options about backdating posts and history.

• When you are ready, start posting! Brag about your wins, offer complimentary advice, and share things your clients likely would enjoy. There is a lot of different declarations out there about what is right regarding what and how often to post. I think that if you are busy, try to post something each week - just one thing. Then, see where you go from there! 
   

13. Website!

• Get assistance - while Wix, Squarespace, and others make it somewhat easy, creating a professional website is very time-consuming for the inexperienced. Be aware though, building a website from scratch by an expert will be several thousand dollars and likely have ongoing fees.

  • A budget-friendly and time-friendly compromise is even with the above platforms you can get an expert to set it up.

  • A good, but basic 4-page website using one of the above platforms can be done by the right person for about $3k, including content and imagery (some you supply, some stock imagery, and/or the designer will create).

  • Shop around or ask for suggestions from those you know (or us!).

  • Remember, a website comes with ongoing costs:

    • Domain fee’s every 1 or 2 years ($50-$250 usually)

    • Hosting fees usually monthly ($20-$100 usually)

    • Depending on who builds it, sometimes ongoing "maintenance fees" ($50-$500/month) so read your contracts and see what ongoing fees you might be committing to!!.

  • Make sure you get a website that you can access and make basic edits to, such as content and images, as you wish - make this a requirement before hiring anyone. The last thing you want is to have to wait on your web designer to update your email address or personnel listed or services listed. When you have access to these basic adjustments yourself, you can advertise your correct details and preferences immediately.
    
    We are a bit fierce about this point because we’ve been locked in and over-committed to services we just didn’t need. And it was painful to get away - not impossible, but difficult and expensive. We instead had to build a whole new website in the end (and personally we love it!).

14. Business Insurance Most frequently required:

• Public and Product Liability - if you interact with customers or the public as a business. Personal injury or property damage that someone may suffer as a result of your business activity. This is the slip and fall coverage, or you did something and the result is their property is now damaged. 

• Professional Indemnity - almost all businesses must-have. If you provide advice or services to customers, this covers claims made against your business who believe that by conducting your services, you’ve caused the loss. 

• Workers Comp - only through iCare and everyone with employees must have it. The amount is industry-specific. https://www.icare.nsw.gov.au/ 
  
  Still not certain what you need? Ask an accountant or legal advisor to confirm. Note, often certain customers/companies require you to have a minimum amount of coverage. Investigate this so you get the right coverage. Most insurance companies will allow you to increase and decrease coverage as needed over the phone.

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15. Support System

• Who can you lean on for guidance and keep you on track? Whether it's your partner, a mentor, or your team, or a combination of all of the above, have someone to vent to. However - be careful about the confidentiality of your clients!

• What’s your go-to methodology for unwinding and de-stressing? Whether it’s a glass of wine or meditation or playing golf, set up a zen time, because you will need it. (And your business will benefit!)

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Good Luck!

Beginning a new business is a massive venture. I’m impressed with every business owner we come across who has taken the plunge. You have already done the hard part, making the decision to go for it. Now you’ve done the next best step and checked out what you should do to set yourself up for success. You are well on your way to a wonderful start. Keep doing what you are doing and while there will be some tricky days - I’m quite confident you’ll be just fine!

 

Follow us on Facebook and Instagram for more free resources
and comment to let us know how you are going - All the best!

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Kimberly Beadle
Registered BAS Agent, Member of ICB
Xero Certified, MYOB Partner, QuickBooks Online ProAdvisor

 

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