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Starting your own small business

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Mr. Scram:

--- Quote from: Halcyon on May 10, 2018, 06:15:20 am ---It's not "new" entirely. There are people doing this for corporate customers every day however we'd be targeting a specific slice of the consumer market which is yet to be captured (at least properly).

I guess where the benefit comes with my team is that each member brings something to the table, but no one person would find it easy to go at it by themselves. We all actually want to work together and we get on brilliantly.

Our initial goal is to make some play money, nothing more really. If it takes off and becomes very successful, we'll revisit the strategy then. We all have full-time jobs and that isn't likely to change any time in the foreseeable future as we're very well remunerated and secure in our positions.

--- End quote ---
That's a potential point of contention. Some of you wanting to grow the business and professionalize while some don't, even though they're essential to succeed.

Halcyon:

--- Quote from: Mr. Scram on May 10, 2018, 07:01:16 am ---
--- Quote from: Halcyon on May 10, 2018, 06:15:20 am ---It's not "new" entirely. There are people doing this for corporate customers every day however we'd be targeting a specific slice of the consumer market which is yet to be captured (at least properly).

I guess where the benefit comes with my team is that each member brings something to the table, but no one person would find it easy to go at it by themselves. We all actually want to work together and we get on brilliantly.

Our initial goal is to make some play money, nothing more really. If it takes off and becomes very successful, we'll revisit the strategy then. We all have full-time jobs and that isn't likely to change any time in the foreseeable future as we're very well remunerated and secure in our positions.

--- End quote ---
That's a potential point of contention. Some of you wanting to grow the business and professionalize while some don't, even though they're essential to succeed.

--- End quote ---

It might be down the track, however none of us are in a position where we could (or would even think about) leaving our current jobs.

EEVblog:

--- Quote from: Halcyon on May 09, 2018, 06:51:40 am ---I figured there would be a lot of experience on this forum. I'm looking to start my own small business, however not having any experience in this, I'd love to hear from those who have done it.
The business will be based within and servicing clients in Australia only, so I'd need to do some research on the relevant tax rules etc... I have spoken to an accountant already to gain some basic advice.
It will involve a few other people, so it won't be set up as a sole-trader, rather a partnership or a company. It will have no "employees" as such, the partners/directors will be doing all the work and taking a cut of the profit.

--- End quote ---

I don't know how partnerships work, but a Pty Ltd company requires at least one director and you can't just " take a cut of the profit", the money has to remain in the business.
There are three ways to get money out of a Pty Ltd business:
1) Wages / Salary
2) Directors fees
3) Dividends (directors are shareholders)

All 3 ways impact your personal tax. Taking excess dividends will also mean you will get shunted onto the PAYG system and you'll have to pay up-front for next years "deemed income".
The best way is usually Wages up to $80k/year and then dividends after that.

Pty Ltd accounting will cost you several thousand dollars a year to maintain, maybe under $1k if it's really simple. I pay about $5k a year, but i have huge numbers of import/export stuff to deal with.

EEVblog:

--- Quote from: BradC on May 09, 2018, 07:15:04 am ---Make sure you get your insurance in order and keep abreast of the tax legislation and any changes as they come up.

--- End quote ---

Get a lot of quotes for business insurance, as if you do anything "weird" like I am, they will just automatically charge you a fortune.

I'm paying about $800/year for full product and personal liability through my broker friend, compared to $3k+ when I got quotes myself.

Shock:

--- Quote from: Halcyon on May 10, 2018, 06:15:20 am ---It's not "new" entirely. There are people doing this for corporate customers every day however we'd be targeting a specific slice of the consumer market which is yet to be captured (at least properly).
--- End quote ---

Someone needs to handle the finances (or incur the wrath of the tax dept) so you want the specifics wrangled out ahead of time, less headaches later.

I've had to "buy out" an equal partner before and dealing with it a year or two down the track in a profitable business is a nightmare.

Not that I have been in this situation but the problem of an informal partnership would be even worse if you had to go to court, if they had a compelling argument for loss of income or entitlement to the business it could be very costly your end.

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