Thread: Sole trader/sub contractor help needed.

A company set up as a trustee for your family trust could be another option. It depends on whether you have offspring to distribute income to. If you do, and they are around 16 and still studying, it's a definite advantage.

I have indemnity insurance for 10Mil and it cost around $500 a year. I can put you on to a good insurance broker if you want. I've used the same guy for almost 20 years and he's a good chap. PM me if you want details. He's in outer east Melbourne.

G'day Tim,

You may or may not yet know you'll need to register your business name, but when you do you'll need 4 back-ups in case the first choice is already taken etc. Registration costs $70 and is renewed every 4 years.

http://online.justice.vic.gov.au/servlet/cav_home

Keep it simple stay as a sole trader, my 2¢, shelf companies are if you're dodgy - do things by the book and you'll be right. If you'd like, come around and I can help out with anything you need to know.

A word of advcie - set-up two b/accounts: one to pay your own money into and the other to keep the GST and tax in. I've seen too may people think that the GST and tax is theirs and come unstuck come end of f/year and they have spent the GST and tax on their person or the business and have to find the money from elsewhere.

You don't need an accountant, GST and BAS is the easiest thing in the world to keep track of and everything else involved with it. Getting an accountant is just spending money you can very easily keep in your wallet.

Incorporation costs a lot of money and in the first year an accountant will tell you to wait until you're up and running for a year before you incorporate. There are benefits in it, but you get near the same exact benefits as a Sole Trader.

If you're working from home and depending on the nature of the business, you may find that you'll get public liability covered under your home insurance, at least I did with AMMI. Like Gumby said, get professional indemnity insurance, it saves you from what could be costly mistakes - but given your business that may not be needed. When printers print big job worth oodles of money for me - it's a piece of mind.

Originally Posted by Waldo

, shelf companies etc. are if you're dodgy - do things by the book and you'll be right. I

absolute bulltish !

Tax minimisation is entirely legal.

Please do not confuse it with tax avoidance or infer that those who take legal steps to get back what they are due are dodgy.

G'day Gumby,

Perfectly correct, wasn't meaning to infer that. All for minimising tax, just the right way. My gripe is those who owe big money and walk away saying that they're just an employee of their own company and pay 1¢ in the $ they owe. But this is I'd think is a different ballpark to what Matrix may be thinking off.

Originally Posted by Gumby

Tax minimisation is entirely legal.

Yes, the definitive case was the House of Lords decision in 1935 in the Queen v the Duke of Westminster where the Law lords held that every taxpayer could organise his affairs in such a lawful way so to pay the least amount of taxes.

This decision is applicable and binding on all Australian courts.

Peter.

Originally Posted by Waldo

All for minimising tax, just the right way. My gripe is those who owe big money and walk away saying that they're just an employee of their own company and pay 1¢ in the $ they owe. .

But, still legal if done the right way. The laws of bankruptcy and company legislation are there to protect them.


Peter.

G'day Peter,

For my 2¢ those people have no morals and don't care about their fellow man, only what they can get out of it and if it hurts others then what do they care. CRS Australia is the latest example - unfortuneately I know one of the directors involved.

Company legislation for my 2¢ is too lenient in favoring business and forgetting about the monetry rights of the employees, by way of superannuation and responsilbility to others etc. but that's way off the topic of one bloke setting up a business.



I'm going to bed before I turn Matrix's thread into more than simple questions, sorry mate.

Originally Posted by martrix

To start with I will only being doing joinery assembly as part of a team in a Shopfitting factory so I am not sure if or how much Public Liability insurance I need, but I will look in to it before I start.

Can anyone recommend some company's for this purpose?

Pretty much like any insurance ring around or use a broker (I never did this but have plenty of mates who did and thought it was great - no effort on your behalf). I had all my business insurance through SGIO as they gave me a decent discount when I linked it to house and car etc. Also look at what else they offer. I think I had to take out a business insurance package when I did it and it included my workers comp and tool and equipment insurance as well as public liability. They would not break it up. It did cost more but not alot more and piece of mind from having your tools insured is very nice. When I first started out I was just sole trader by myself and did not employ anyone. Even with no employees, some larger businesses required that I show them a certificate of insurance for my PL and WC before stepping foot on site, this was despite the fact that you can not insure yourself for WC, it was just a $300 certificate that allowed me to win the job. When i started to emply guys my WC premium rose substantially and was based on the hours worked by the employees, I use to have to fill out a statement of hours worked and predict the following years when I renewed each year, these costs start getting scarey big.

Do not discount the rise in cost of your mobile phone useage, you don't realise how much you use it when you are working for yourself. Also, one thing i did to make life easier come tax time was get accounts with as many places as I could - less receipts to manage, especially for fuel. I had several gull cards (one for each vehicle, one for my bobcat and one for my small plant) Gull did not charge you anything for the service at the time but i remember some of the others did want to charge a monthly account keeping fee. Also, get a ute if you don't already have one, laws for keeping logs are different with utes and much easier to deal with. These may all seem like little things but when you start spending an hour a night entering receipts into MYOB and keeping logs after a day on the tools you soon find ways to simplify it.

Also registering for GST is based on turnover not earnings so if you turn over $60K but only 20 of that is profit you still need to be registered for Get Shafted Tax. I quite liked being GST registered as it is the client who pays it in the end and you get to get 10% back on all your tools at tax time.

Re your name.

My advice is to pick something that starts with the letter "A" as it heads alphabetical directories and listings and is obviously one of the first names/businesses people usually recognise and remember.

Also keep it under 8 letters. That way it makes an easy name and web address for dummies to remember, and is small enough to maximise advertising space for you $$$$

A bit like MYERS they dropped the "S" and the word MYER became 20% larger for the same space.

I picked Artzania, for furniture that is a bit arty and different hence the zany bit I get lots of comments mainly from the women and after all they are the important ones as they "pick" the furniture, and the blokes just pay for it So when you go for names/imaging just remember its the girls you have to get the attention of

Originally Posted by Lignum

Re your name.

My advice is to pick something that starts with the letter "A" as it heads alphabetical directories and listings and is obviously one of the first names/businesses people usually recognise and remember.

Also keep it under 8 letters. That way it makes an easy name and web address for dummies to remember, and is small enough to maximise advertising space for you $$$$

A bit like MYERS they dropped the "S" and the word MYER became 20% larger for the same space.

I picked Artzania, for furniture that is a bit arty and different hence the zany bit I get lots of comments mainly from the women and after all they are the important ones as they "pick" the furniture, and the blokes just pay for it So when you go for names/imaging just remember its the girls you have to get the attention of

I think getting the right sound and image from the name is far more important than getting first place in the directory, mine is Greenroom and as a landscaper it works well and always wins over Bazzas Backyard Makeovers with the ladies. Lignum is right, they are the ones you need to impress.

Likewise, get a decent logo, print it on a glossy card, and print quotes on your computer in colour, it gives clients the feeling that they are dealing with a professional. I use to honest to god subcontract a guy who I watched in horror hand a quote to a woman scribbled on the back of an old envelope that had been knocking around on the floor of his filthy ute, needless to say he makes enough money to get by but never gets ahead. Clients don't mind waiting a day for their quote if it stands out and I am not talking price. I use to constantly get shown scrawled out quotes by women who would plead with me to match it. My standard answer was that I hold all my insurances, pay all my taxes and turn up when I say I will so cannot afford to drop my price but feel free to go with the other guy - I never missed out on many jobs and those that I did I was happy not to do. Clients that scrimp from the start are usually pains and always want a Ferarri for a Ford price.

Brings me to my next point, go with your gut when pricing and accepting jobs, if after meeting with a client to cost a job you feel that they need to have the pain in the rear levy added to their price do it - you will inverably earn it, if someone is hard work to win over, don't work for them, never lower your self to bidding for work. It is imperative that you have a good relationship with clients and you are far better off staying at home for a week with no work than working for someone who does not deserve your services - I learnt that the hard way.

Originally Posted by Burnsy

I think getting the right sound and image from the name is far more important than getting first place in the directory, mine is Greenroom and as a landscaper it works well and always wins over Bazzas Backyard Makeovers with the ladies. .

Bazzaz Bckyard Makeovers would get my attention before Greenroom because its self explanetory and Greenroom could mean anything. Interior designer springs to mind. Im not saying you have to have a name with A but the higher up in listings the better the chance a potential customer will ring before something starting with Z. Its not the be all and end all, but it dose help. Anyway G is pushing up the top

Originally Posted by Lignum

Bazzaz Bckyard Makeovers would get my attention before Greenroom because its self explanetory and Greenroom could mean anything. Interior designer springs to mind. Im not saying you have to have a name with A but the higher up in listings the better the chance a potential customer will ring before something starting with Z. Its not the be all and end all, but it dose help. Anyway G is pushing up the top

I probably should have expanded- full name Greenroom Landscaping

OK, thanks again for all of the good advice. Still looking for a name that I am happy with to register.

It appears now more than likely that I will have to register for GST as I think I estimate all things going as planned, I will be over the limit.

So I know the downsides of GST are the monthly/quarterly BAS statements, what are the benefits of being registered for GST?

I take it that it works like this. I charge GST on my services to the company. That company then also charges GST to their customer and the company then claims a GST credit on what I charged them?

Any tools, goods and/or services I use for my business I can claim a GST credit on the GST I am charged when purchasing these items, as well as claiming them as a tax deduction?

PS. Gday Waldo, do you use QuickBooks?

G'day Matrix,

No, my method is simpler. I just use the old fashioned invoice book and two Mabrig folders, one for quotes and when those quotes turn into invoices they go back in the same folder until they're paid, when they're paid they go into the paid invoice folder.

Then I take out the GST and tax, put that into one account and the money left over into my bank account.

works for me.