10 key steps for starting a trades business
So, you’re over working for someone else and want to become a trade business owner yourself? Congratulations, there’s nothing quite like being your own boss. But the whole process of starting a business can be a little daunting. We’ve put together this handy checklist to help with some of the questions you may have.
As a budding small business owner, there are a few steps you’ll need to take to ensure that you’re operating both legally and successfully. Work through this checklist to help tick all the right boxes before you go out on your own with a tradie business.
A business plan is a summary of all the other elements of this checklist. It’ll help you plan and prepare in manageable chunks, while giving you a document that’s likely to be required by anyone you want to borrow money from to help with start-up costs.
Typical sections of a business plan for a startup trade business are:
A SWOT analysis (listing strengths, weaknesses, opportunities and threats) can also be included. Drafting it will help you address issues before they arise while recognising ways to increase the chances of having a successful trade business.
Search online for a business plan template to complete. Or get some tips in our How to write a business plan article.
Many tradies start out as sole traders, though you may be considering a partnership with a friend or even a company. Choosing the right business structure is important as each one has different ownership, liability and tax implications.
Check out our Choosing a business structure article to see some of the pros and cons of each type of business entity.
Before you start trading, you’ll need to apply for an ABN (Australian Business Number) or ACN (Australian Company Number) depending on your business structure. You may want to register for Goods and Services Tax (GST) too, or you may have to if your projected turnover is more than $75,000 each year.
Learn more about business registrations in our 4 key steps when setting up your business article.
As a tradie, you’re very likely to need a licence to operate too. Search for required permits in your area using the Australian Government Licence and Information Service. Or if you’re entering the construction industry in any trade, go to the building authority for your state or territory:
Occupational Health and Safety (OH&S) is an important consideration too. Learn about your legal obligations in the Work health and safety section of the Government Business website.
New trade businesses often need a cash injection to help with start-up costs, including tools and other equipment, and a ute or van. You can use your own funds or ask family or friends for help; or you could consider applying for a grant or loan to help get you up and running.
Government grants and training courses are available to startups in a wide range of industries including trades. To find out what’s on offer, start by searching ‘<Your state or territory> business grants’. Or use the Australian Government grants and programs finder tool.
Alternatively, you could borrow money with a business loan for startups. Or for your transport and tools specifically, you could look into vehicle and equipment finance, which includes both buying and leasing options. If all you really need is support for your cash flow while waiting for bills to be paid, a business overdraft may help.
If you can build a house, you’ll find building a website to promote your business pretty simple. Search ‘website builder’ to get links to all the main self-build website providers.
Choose a URL for your website and email addresses that match your business name – this will act like an ad when people are searching. To find out if the name you want is available in any relevant domain extension (such as .com.au), search ‘domain registration Australia’ and choose a registration company to search URL options through.
Then try to build a social profile on platforms such as LinkedIn, Facebook, Instagram and TikTok. These are great ways to promote your business locally by sharing work that you’ve completed, testimonials from happy customers, and news about industry developments. You can have a bit of fun with them, to let customers know there’s a friendly human in charge of the tools.
You may want to advertise your business on local community noticeboards, through leaflet drops and in local media – both printed and online. Join any relevant industry associations too, to add credibility to your business and letterheads. And remember that search engines such as Google will probably be an important source of customers. Check out Google Business Solutions to see how they could help.
It’s important that you protect your business and employees and cover yourself for unforeseen circumstances. Some of the business insurance options to consider (or that might be compulsory for your trade) include:
Westpac offers a range of Insurance policies for business that you can explore. Or chat with a business insurance expert to find the right protection for your trade.
Small business owners often find that separating business finances from personal banking makes life simpler for them. Using different bank accounts makes it easier to separate personal and business purchases, track income and expenses, and plan for tax time and end of financial year. Plus, choose a business account to receive payments into and it may include extra features that help take the strain out of accounting.
For example, if you open a Westpac business transaction account, you can link it to accounting software such as MYOB and Xero to streamline bookkeeping. To keep things simple and visible, if you already do your personal banking with Westpac, you’ll be able to see your personal and business accounts side-by-side in Online Banking.
Westpac offers a $0 monthly fee business account and an added value business account that gives you access to exclusive discounts on popular business products and services. Unlimited electronic transactions are included with both accounts.
When you’re running your own business, there’s always a risk of getting buried in admin. So, before you start trading, work out a good way to store and access quotes, invoices, orders, receipts, correspondence, business activity statements and tax returns.
You could keep records electronically on a PC or laptop, as hard copy in folders in a filing cabinet, or both methods to be on the safe side. And make the most of accounting software, which can simplify your bookkeeping and business record keeping.
The Australian Taxation Office (ATO) has a Record keeping evaluation tool that can tell you how well you’re keeping your records.
Whether you choose to invoice for work or get paid on the spot, a key to getting your cash fast is making it easy for customers to pay you. So think about how they can pay you the way they want to.
If your customers are paying into your bank account:
You can print the BSB and account number of your bank account on your invoices. But if you’d rather not share your bank account details, you can ask customers to pay into your account using PayID® instead. With PayID you just link a unique number such as your phone number or ABN to your bank account, then give that number to customers to make near-instant payments to you through their online banking.
If your customers are paying you in person:
A flexible way for trade business owners to take card payments is using an app such as Westpac EFTPOS Air on your compatible smartphone. It turns your mobile into an EFTPOS machine with no extra hardware required, and features point of sale capabilities, so you can build menus of your services and hourly rates.
Making a big deal of your launch will not only let potential customers know that you’re now available for projects, but it could give you engaging content to share on your social media. Try to do something distinctive and memorable and send pictures of your launch party to local media for some free publicity.
There’s a whole lot to think about when starting a new business and at times you may struggle to focus on the best way forward. Use this checklist to take things one step at a time, for the chance of heading in the right direction for business success.
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The information in this article is general in nature and does not take your objectives, financial situation or needs into account. Consider its appropriateness to these factors; and we recommend you seek independent professional advice about your specific circumstances before making any decisions.
The PayID types available to you may vary depending on your customer profile. If you register your mobile as a PayID, it needs to be the same as your SMS Protect CodeTM.
When your PayID is registered, your details (including your name) will be available to people who use the service and enter your mobile phone PayID.
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