Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.
There are 2.1 million small businesses in Australia. Of them, just under 1.3 million are sole traders or partnerships. Making the decision to start your own business can be both exciting and terrifying. There are many perks to being your own boss but plenty of responsibilities too. We spoke to two Australian business owners to get their take on it.
Go your own way
Running your own business generally means working hard, being the key decision maker and wearing many different hats – for everything from marketing through to customer service and accounts. However it also gives you the ability to develop and create your own vision for the business and work in your own way.
“I love the freedom of being able to do what I want to do creatively. It’s my vision with no compromises,” says Jackie Fazekas, founder and owner of Melbourne-based homewares business Fazeek.
It’s a sentiment shared by Nick Walsh, creative director and founder of Web Wolves, an independent Sydney-based creative branding agency, who says freedom is a major benefit of working for himself. “You can work when and where you want. I’ve set myself up next to the beach, so I can enjoy an active and healthy lifestyle simultaneously with the work week.”
Start right – and keep learning
Establishing your own business takes a lot of time, research, money and planning – but it’s also a continual process of learning, and evolving your business, skills and offering.
Walsh says one of the biggest business lessons he has learnt is the value of “always keeping the fire burning” by working across multiple projects simultaneously. “In the nature of my business, I need to ensure I’m juggling a few projects at any one time, so it flows financially, whilst encouraging growth and keeping me on top of my game.”
Walsh believes that money shouldn’t be the make-or-break reason you start a business. Instead, he advocates the importance of ideas and planning. “It should rest upon the ideas and the implementations you set in place as these will ultimately determine the success of a business.”
Fazekas says trusting your gut instinct is essential when it comes to your business. She thinks that the right business ideas shouldn’t just be marketable and saleable they should “feel right” too.
“Don’t go in too big to start as you never know what the market’s response will be,” advises Fazekas, who started her label in 2014 after 15 years spent honing her skills in various roles across hospitality, fashion, floristry and design. “Once you know then you can throw more money into it, as you know where you stand to a certain degree. As the design world is constantly changing you have to be constantly thinking about the next thing and researching the best and most viable way to create it. This makes it really exciting, but also keeps you on your toes”
Master being your own manager
From PAYG to superannuation to expenses and invoicing – there’s a lot to learn when you first become self-employed. Here are five key things to keep in mind:
1. Find yourself a good accountant
You’ll need a reliable accountant who you trust and feel wants to grow with you and your business. They are a key player – along with your financial planner – in helping your business grow and succeed.
2. Engage a financial planner
When you’re working for yourself, it’s more important than ever to have a clear plan for your financial future. A financial planner can work with you to set business and personal goals and make sure you have a plan for reaching them. Your accountant may be able to refer you to a suitably qualified planner, or you can try our Find A Planner tool here.
3. Consider the business structure
Before you start your business, it’s important to consider which structure best suits your needs. Some common types are sole trader, company, partnership or family trust. Each has advantages and disadvantages, so it’s important to seek advice from a professional business advisor, lawyer or accountant before deciding what is best for you.
4. Make time to manage your accounts
Finding time in an all too busy workday can be hard but it’s important to make maintaining your accounts a regular to-do. This will give you a clear understanding of your business’s financial position and help you manage it more effectively.
5. Invest in accounting software
Online accounting software for small businesses, such as Xero, Rounded, Wave and Expensify, can make managing your business finances easier and more efficient. They can also help give you an overview of your income streams and earnings without all the associated admin of doing it manually. Take a look at this overview of some of the best accounting software solutions available to help you manage your business finances.
Being self-employed can be hard work, but it can bring plenty of rewards too. Knowing how to manage your finances is just one part of a bigger picture, but an important one when it comes to your income and the sustainability of your business.
Find out more about how financial planning can help you achieve your business and personal aspirations here.
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