Home – New Forums Starting your journey Do I need to start a business???

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  • #967060
    richkoto
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    Hi All,

    I am thinking about starting to earn some extra money and I have an idea about how I want to do but I a just wondering do I really need to register a business?

    I am going to be purchasing some IT equipment from Asia and then selling it on at a profit (hopefully!!!). My target market is very niche and I will likely be advertising through classified ad’s such as Gumtree, Trading Post, eBay etc.

    Do I really need to register a business for this purpose as it is just some money on the side. I’m sure people buy things and sell them on eBay all the time and they don’t have businesses. Is there a limit to the amount of money you can earn before you have to start a business?

    Any advice would be gratefully received.

    Thanks,

    Richard

    #1023037
    Nealst
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    Hi Richard,

    Firstly by starting a business I am guessing that means registering a business name, obtaining an ABN etc, which amounts to your ‘business’ becoming a legal entity in its own right.

    From what you have described in your post, I would suggest that you need to consider doing just this. From a revenue law point of view, once a business reaches a certain size (which is essentially bigger than a bit of fun on the side that generates a bit of pocket money) then you suddenly attract the attention of the ATO. If your idea becomes what you want it to, then it sounds like you will have enough money rolling in to satisfy this criteria.

    Also, when you register your business, it makes it separate from your own personal finances etc and most people find this easier to manage.

    One tip – do a business plan. If you do this well it mitigates risk and will give you more chance of making a go of it.

    Most of the info can be found searching our old pal Google, but I would suggst the ATO website is a good place to start for ABNs and GST information, and the Depatment of Fair trading in your state.

    Good luck!

    #1023038
    Jake@EmroyPrint
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    It’s free to register for an ABN, so there really is no drawback in doing it.

    Also if your sales are under $75,000 (from memory – Janna jump in and help me here) you don’t need to register to GST.

    – Jake

    #1023039
    Confident Woman Australia
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    I think it may help you to decide whether you are just want a “bit of money on the side” which sounds more like a hobby, or you are really serious in which case start a business. Clarity can help people be successful and focused.

    Think also of your potential clients – they may trust you more if they think you are a real business.

    Rachel.

    #1023040
    Karen Wardle
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    Also, when you register your business, it makes it separate from your own personal finances etc and most people find this easier to manage.

    As stated above it is much easier to manage your business finances when they are kept separate from your personal affairs. But I think it is worth clarifying that registering your business doesn’t automatically make it a separate entity. This will depend on the legal structure that you choose.

    #1023041
    Dream Group
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    Karen Wardle, post: 27292 wrote:
    As stated above it is much easier to manage your business finances when they are kept separate from your personal affairs. But I think it is worth clarifying that registering your business doesn’t automatically make it a separate entity. This will depend on the legal structure that you choose.

    Hi Richard,

    I find it easier to keep business and personal affairs separate, as I think that most people would.
    I’m sure that it helps with all the accounting side of things come tax return time.

    Regards
    Warren

    #1023042
    richkoto
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    • Total posts: 14
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    Thank you all for your responses. I think my main issue at the moment about committing to registering a business and everything that comes along with it is that I’m not sure if my hobby will turn out to be a “serious business”. I’d love it if it does, but wouldn’t everyone!

    #1023043
    richkoto
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    Emroy, post: 27251 wrote:
    It’s free to register for an ABN, so there really is no drawback in doing it.

    Also if your sales are under $75,000 (from memory – Janna jump in and help me here) you don’t need to register to GST.

    – Jake

    Do you, or anyone else know that if all of my sales are made to customers overseas who don’t pay GST, would I ever need to register to GST even if I made over $75k in sales?

    #1023044
    Steven Hudson
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    Richkoto

    Mate…..do your self a favour and go see an accountant and get some professional advise. The right structure could save you hundreds of thousands of dollars.

    THINK…..DO…..REVIEW…..NEXT

    Cheers

    Steven

    #1023045
    Confident Woman Australia
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    richkoto, post: 27322 wrote:
    Thank you all for your responses. I think my main issue at the moment about committing to registering a business and everything that comes along with it is that I’m not sure if my hobby will turn out to be a “serious business”. I’d love it if it does, but wouldn’t everyone!

    Your mind set will help – at least know what you are aiming for. It will help you talking to customers.

    #1023046
    Confident Woman Australia
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    Steven Hudson, post: 27333 wrote:
    Richkoto

    Mate…..do your self a favour and go see an accountant and get some professional advise. The right structure could save you hundreds of thousands of dollars.

    THINK…..DO…..REVIEW…..NEXT

    Cheers

    Steven

    Yes I think it would be a good idea to get some professional advice, there is a Small Business Development Corporation in most states – they are really helpful – and advice can be free or at a very low cost – is there something like that near you? If not, this is the website of the WA one: http://www.smallbusiness.wa.gov.au/

    Rachel.

    #1023047
    beancounter
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    You obviously see potential in your new venture, or you wouldn’t have gone to this much trouble

    As previously stated, go get some professional advice from your accountant. When it comes to financial/ tax issues there’s never one straightforward answer that fits everybody’s situation.

    How the additional income is treated is dependant on your other individual circumstances. Often our clients will ask us similar things – but we’re bookkeepers not financial advisors, tax agents or accountants so we can’t give advice in such matters

    If you are thinking big and starting small, then it really does pay to have the right set-up at the beginning

    “Begin With The End In Mind” and even have a look at an exit strategy for your business – that can also affect how you establish it.

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