I recently embarked on the journey of becoming a freelancer (a.k.a sole trader) and it’s a brave new world! After working in the finance industry for several years, I thought I knew what it took to start a new business, at least from an operations perspective. Boy was I wrong!
Taking the step out of a safe and secure corporate job into a venture where everything rides on you, takes a clothes-pile-after-spring-clean sized mountain of courage. Though unsure of what the future may hold as you walk into uncertainty, you feel a rush from making such an audacious move!
Then, with each day of setting up your business, you discover something new you need to do that you had no idea about. You experience a growing sense of inadequacy and ask yourself “am I cut out for this?”
Sound familiar? I’m with you there.
As I began my journey into this brave new world, my excitement was quickly overshadowed by the reality that dawned – I had a lot to learn. I found myself reading blog article after blog article, pinning useful tips on Pinterest and typing detailed searches into trusty Google.
What I wish I had known earlier
What I discovered was, there are key factors to consider that go unmentioned in so many of these articles that I had to find out for myself. Now, these factors may not be sizzling hot topics that drive traffic to a blog or website, but they’re things you need to know as a sole trader! Especially if you’re looking to do business in Australia and to do it right.
Any views or opinions expressed in this post are my own and don’t necessarily reflect the position of any agency, organisation, employer or company. I don’t receive any compensation for recommendations or links included.
I don’t qualify as an “expert” in the area of starting a business. Any suggestions I make are for informational purposes only and don’t take into account your personal circumstances. They are not a substitute for any professional advice.
What have I learned that I wish had known sooner rather than later?
1. If you’ve registered for a new ABN…
Calculate an income tax estimate for every invoice you generate and set aside that amount each time you get paid. This will save you from getting a rude shock at tax time. When you become a sole trader, tax looks a little different. So educate yourself up front!
What I didn’t previously know, was that the Australian Taxation Office (ATO) doesn’t issue quarterly Pay-As-You-Go statements (to pay tax in increments during the year) until you’ve submitted your first tax return under your new Australian Business Number.
To allow a bit of a cushion, I prefer to overestimate my tax (by not taking into account deductions) and transfer it to the savings portion of my business account. Hello, emergency funds!
2. If you’re yet to make $75k or more per year in your business…
Did you know you can hold off on registering for Goods & Services Tax (GST) until you generate $75k? I didn’t!
After stressing out about whether I needed to charge GST on my first client invoice, I stumbled upon (okay, I intentionally dove into) an ATO article that told me I could forget it. At least, for now as a new business.
So, if this scenario applies to you, you can leave the GST off your invoices, your first-mover clients will be grateful for it! Just be sure to keep them informed when you do register for GST at the time you hit that $75k revenue mark.
3. If your office is your home & you use email marketing…
Apply for a PO Box or GPO Box to protect your privacy. Apparently, by law, email marketing platforms like MailChimp and ConvertKit require the disclosure of the sender’s mailing address at the bottom of every email.
You can imagine my surprise after typing my first welcome email, sending a test email to myself and discovering my home address right down the bottom. I almost missed it too!
To minimise the chance of you being the target of a creepy stalker fan or nemesis, get a PO Box for your business. No unwanted visitors here!
The journey as a freelancer should be just as the name implies – freeing! The last thing you need is operational technicalities holding you back. Staying educated is key to thriving in this new capacity.
Leave a comment and let me know what you’ve learned from your own experience or even from people you know who’ve started a business on their own.
Oyelola is a freelance writer based in Sydney, Australia. She works closely with entrepreneurs and businesses in financial services, consulting and education, writing quality-rich content to engage their readers and motivate action. When not writing for clients, Oyelola provides insights on writing, wealth and work on her Phrased with Purpose blog and shares her faith journey on her personal blog, He Speaks, I Write.