Working independently is never easy, especially if it is also your first time starting a business. While difficult, becoming a sole trader is certainly rewarding, as all the success that comes with it is accredited to you! If you are looking to become a sole trader but have no idea where to get started on the path of success, keep reading to learn from our tips!
Start with a business plan
A cohesive and detailed business plan will keep you from becoming overwhelmed when starting your business, and hold yourself accountable for any developments within the business. Using a business plan to determine time frames (for example, how long it will take for your business to launch, to start making profits, to make a particular level of profit).
Your business plan should also include details on your:
- Goals. What is your business aiming to achieve, in the short term and in the long term?
- Feasibility factors. How will you launch your business? Where will you source your business funds?
- Target market. Research your business’ target market and consumer behavior.
- Marketing strategies. How will your target market learn about your business? How will you market your business successfully towards your desired market?
Get all your set-up requirements done
Although a pretty straightforward tip, it is important that you get all the set-up requirements for your business done before committing to any big project idea. Knowing what you need to do and to prepare for your business set-up will prevent any overinvestments from occurring. For example, if you find that you are ineligible to apply for a Tax File Number (TFN) or an Australian Business Number (ABN), you will not be able to open up your own business.
In addition to getting all your legal requirements in order, it may also be beneficial to prepare financially by learning which taxes you will need to pay (for example, you may need to pay Goods and Services Tax if you find yourself earning more than $75,000 a year). You can hire a small business accountant to help you sort out your finances, and find out which taxes you will need to pay as a sole trader, as well as how you can manage your superannuation payments.
Invest in your work space
As you will be spending a substantial amount of time in your workspace getting your business up and running, it may be worthwhile to invest more into it.
Not only can you improve on the ergonomic factors of your workspace (such as a standing desk, large computer screens, a comfortable chair), you can also invest in your networking abilities, with increasingly popular coworking spaces. Investing in a co-working space will allow you to naturally socialise with other sole traders, and help you gain insight into the profession, as well as your industry.
Follow our tips above and you’re sure to become a successful sole trader down the road! If you have any questions regarding your financial position as you start your business, don’t be afraid to consult with an experienced accountant as well!