Home – New Forums New here? Share your story Newbie Here, Seeking Advice for Business Setup?

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  • #1243423
    Ana
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    Hello all,

    What a wonderful forum this is 🙂

    I am new to business, all I have so far is an ABN.

    I was hoping to get some advice from you smart-business-people regarding the best way to set up a business when dealing with US-based clients?

    I’m most confused as to whether I need to set up an LLC? Is that a must? Is it the best way?

    An LLC sounds a little overwhelming, to be honest! But there have been some recommendations online to do it, and there is an option to do it within Stripe.

    But I thought I’d ask some Aussies as to whether or not an LLC is necessary or best for my situation, and if there are better ways/options. This would be providing lead generation for US small businesses every month. I’m a one-person service!

    Also, should I be doing something different regarding taxes, etc?

    Forgive me, I’m just starting out!

    Any guidance would be much appreciated.

    Thank you kindly.
    -Ana

    #1243466
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
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    Hi And Welcome to Flying Solo Ana. It is great to have you!

    Thank you for joining our community and posting.

    Crush it in your new venture.

    Basically, seek paid accountant’s advice is the best advise. Once you start down a track with tax implications it’s sometimes impossible to reverse and it could be a big mistake.

    That said, I had a US based website and was advised to pay Tax either in Aus or US – it made life much easier for me to keep everything in Australia for me (except the money coming from the US haha.

    Go out there and crush it!

    Cheers
    ~Paul

    #1243499
    Ana
    Participant
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    Hi @paul-fs-concierge

    Thanks so much for taking the time to comment on my post and for the encouraging words!

    Yes, I’ll definitely be looking for an accountant that knows about this type of business setup, for sure! I just thought this place would be a good place to start gathering some knowledge as my first steps 🙂

    I’m glad to hear you’ve had experience with a US-based website from Aus! I’ve been reading up a bit more and I’m leaning towards your exact sentiment regarding keeping all the tax and business stuff in Australia and just keeping the US dollars coming in!!

    Would you mind if I ask if you set up a company PTY for that business here in Aus and used some sort of virtual US mailbox? I was looking at doing that too. A US address would look better on my invoices… I guess? (or am I just overthinking that? )

    Thanks so much again! 🙂
    -Ana

    #1243548
    Paul – FS Concierge
    Keymaster
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    Hi Ana,

    I had all of the same thought processes you did… and more.

    In the end, I became a US – facing site with round-the clock support as I let my customers know (once they were customers) that I was from Australia and there was little to no friction and they actually liked my hands-on and personal support at hours other company’s didn’t provide.

    One insight I can give is that US people value competence above all else and are welcoming of Australians doing business in America – if you had the same fears I did, they will be un-founded.

    I wouldn’t bother with a US mailbox until you are sure you need one but YMMV.

    The one thing I had, was an internet based US phone number (you can get through Skype or other means (I’m out of date now haha) and used Upwork to have a US based person available to answer a low volume of calls – it was a bit to manage as sometimes candidates were strong on promises and short on delivery. Had I have had a bit more business, I would have considered an Agency to do this.

    As to your entity, you really have the same choice as any Australian-facing business and this can have long-term consequences.

    Sole-trader, Trust, Company or Trust with Company acting as Trustee for the Company.

    Again an Accountant is your best bet. @jamesmillar has always provided good advice to Soler’s.

    Cheers
    ~Paul

    #1243487
    Ana
    Participant
    • Total posts: 5
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    Hi @paul-fs-concierge

    Thanks so much for taking the time to comment on my post and for the encouraging words!

    Yes, I’ll definitely be looking for an accountant that knows about this type of business setup, for sure! I just thought this place would be a good place to start gathering some knowledge as my first steps 🙂

    I’m glad to hear you’ve had experience with a US-based website from Aus! I’ve been reading up a bit more and I’m leaning towards your exact sentiment regarding keeping all the tax and business stuff in Australia and just keeping the US dollars coming in!!

    Would you mind if I ask if you set up a company PTY for that business here in Aus and used some sort of virtual US mailbox? I was looking at doing that too. A US address would look better on my invoices… I guess? (or am I just overthinking that? )

    Thanks so much again! 🙂
    -Ana

    #1243570
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
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    Hi Ana,

    I understand your thought process as I lived through it.

    My business was making about 50K AUD (converted) at the time and it was my side hustle while I was working a full time job.

    I was a sole trader as my business was very low risk of having an insurable event occur and didn’t have turnover that warranted anything more than registering an ABN.

    Basically, I am straying into Accountant’s territory (and shouldn’t because things may have changed and/or, your circumstances may be different and Tax Law can be un-forgiving if you “hope” you are right – you MUST be right or potentially pay the consequences) – but being a sole Trader was the lowest cost option for me and suited me at the time. A lot of soloer’s never have a Company or Trust. Ever. Again Accountant’s can advise your best option but seek the advise of a few because some will try to up-sell you on expensive options you don’t need.

    In any quarter, had I done more than 1/4 of the GST threshold, I would have been required to register for GST.

    Depending on the nature of your business – (you haven’t stated what it is), you may need to consider public liability insurance and be aware of the situation in Australia and the US. Another issue is product returns if you have any and how you handle them.
    Thankfully, my business was a Job Board (recruitment) and didn’t at the time, have to worry about that. Amongst my biggest problems was spotting and dealing with Credit Card fraudsters (of which there were many) and keeping my PayPal record in-tact because PayPal was known to shutdown accounts that attracted too many fraudsters without consultation. Had Stripe been available then, that would have been my choice.

    One thing – and this is NOT advise – is that compliance measures that the Govt had for overseas transactions at the time were basically non-existent. I paid tax on my income anyway and all my transactions were through PayPal at the time so I had decent records to support my position. I had some friends that set up Asian based bank accounts and simply never reported income to Aussie authorities.

    Back on being an Aussie supplying a service to US based customers. I didn’t have to look like I was from the US at all – and this was a surprise to me. Australian’s overall are a bit less trusting.

    I was just in a growth phase when I had a cataclysmic disaster with my software that ended up shutting me down – (which is one of the reasons I prefer platforms like Shopify). But I had accounts with Comcast and the U.S Postal Service – all from my little home office out on the deck of my house at the time. They knew I was Aussie and they were still happy to deal with me. They would send me cheques = lol Americans – to my home address in Queensland – so I never, for example, had a mail box or mail forwarding service.

    Keep the main thing the main thing – be contactable via chat, email and/or a US based 1800 Number and make it easy to be found and easy for customers to buy from you.

    I hope some of this helps.

    Cheers

    ~Paul

    #1243586
    Ana
    Participant
    • Total posts: 5
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    Wow, thanks @paul-fs-concierge!!

    I’ve just learned so much from your posts and I can’t thank you enough!

    Your story is very inspiring for me and has many good lessons, so thank you again for sharing your experience!

    The US internet phone number is a wonderful tip. Someone’s recommended Call Hippo as an option for a US phone, and it has some other nifty features about it too 🙂

    I’m going to go with the Sole Trader route for now as I am just beginning with this, and yes – as you mentioned the fear of being an Aussie doing business with the US is DEFINITELY there – but as you’ve so kindly mentioned in your posts, I’ll try not to let it get to me and just provide the best service I can give =)

    Thanks so much again and for this forum too, I can’t say enough how helpful it is to come and get advice here.

    Have a wonderful rest of your week!
    Warm regards
    -Ana

    #1243619
    valentlau
    Participant
    • Total posts: 63
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    Welcome. You would benefit from a consultant who specialises in that area. The NSW Gov have free advisories that can help you get started.

    #1243627
    Chrispro
    Participant
    • Total posts: 93
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    Hi Ana,

    All excellent advice from Paul, so I don’t have a great deal to add. I do a bit of trade internationally (inc with US-based clients) and, like Paul, I’ve always just paid my taxes here. I do operate through a Company and Trust structure because it suited my personal circumstances at the time. However, the simpler your structure, the better really. These days, if you’re doing anything with the US, KYC requirements can become an issue at times (e.g. if you happen to need to use an Escrow service or something like that) – with my structure that has become a bit of a hurdle to get over as I can’t always provide the documents they request, but with a Sole Trader setup that will be a heap easier for you.

    Just one recommendation I was going to give. If you need to send or receive Wire Transfers (as the Americans call direct bank transfers), then I have found Wise to save me a heap. Previously I used PayPal and their fees and exchange rates are terrible (and it was the same with my local bank’s international transfers), but Wise has been a saviour. They will also give you the ability to setup a US bank account. All free to do, so if you’re receiving payments by Wire, US-based clients can pay you as if you are a local. Oh, and you can also get a debit card from them which will allow you to pay in USD, so you can avoid the poor rates that some Credit Card companies give. If it’s allowable on this forum (??) you can PM me and I can provide an affiliate link for you. But even if you don’t want to do that, they are worth checking out in the event that you require their services.

    Chris

    #1243637
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
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    @chrispro – excellent post. Thanks for your input.

    I have used Wise in a different context and have found the service to overall be awesome and in my circumstance have grown to trust them with (for me) very large sums of money.

    Having the ability to accept bank transfers directly would have been great for my previous gig.

    In Ana’s shoes making the payment method at the checkout frictionless is a critical part of the sales process so looking into Wise and potentially, Stripe too (for it’s integrations into many carts and accounting software) is what I would spend some time investigating.

    If Ana’s business is consumer facing, I can’t stress how important testing the check-out process is. It needs to be both quick and easy and the less screens a customer has to click through, the better.

    #1243649
    Chrispro
    Participant
    • Total posts: 93
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    Yep, precisely – must be easy from a consumer perspective.
    Wise is something that can be super handy for the backend, rather than getting end users to pay directly to your account. For most businesses there are going to be some type of expenses and this is where Wise can be very useful. For me I mostly use them for larger B2B payments (both sending and receiving) and it saves me plenty.

    #1243686
    Ana
    Participant
    • Total posts: 5
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    Yep, precisely – must be easy from a consumer perspective.
    Wise is something that can be super handy for the backend, rather than getting end users to pay directly to your account. For most businesses there are going to be some type of expenses and this is where Wise can be very useful. For me I mostly use them for larger B2B payments (both sending and receiving) and it saves me plenty.

    Hi Ana,

    All excellent advice from Paul, so I don’t have a great deal to add. I do a bit of trade internationally (inc with US-based clients) and, like Paul, I’ve always just paid my taxes here. I do operate through a Company and Trust structure because it suited my personal circumstances at the time. However, the simpler your structure, the better really. These days, if you’re doing anything with the US, KYC requirements can become an issue at times (e.g. if you happen to need to use an Escrow service or something like that) – with my structure that has become a bit of a hurdle to get over as I can’t always provide the documents they request, but with a Sole Trader setup that will be a heap easier for you.

    Just one recommendation I was going to give. If you need to send or receive Wire Transfers (as the Americans call direct bank transfers), then I have found Wise to save me a heap. Previously I used PayPal and their fees and exchange rates are terrible (and it was the same with my local bank’s international transfers), but Wise has been a saviour. They will also give you the ability to setup a US bank account. All free to do, so if you’re receiving payments by Wire, US-based clients can pay you as if you are a local. Oh, and you can also get a debit card from them which will allow you to pay in USD, so you can avoid the poor rates that some Credit Card companies give. If it’s allowable on this forum (??) you can PM me and I can provide an affiliate link for you. But even if you don’t want to do that, they are worth checking out in the event that you require their services.

    Chris

    Thank you, thank you! Both, thank you!


    @chrispro
    I would love to check out Wise if you’d like to post me your affiliate link 🙂

    It sounds like a great service, especially if you both recommend it, being fellow Aussies and all!

    I currently have Stripe setup and a business Paypal account. I’m using third-party software to create invoices, but Wise sounds like something I might need too.

    I’ll be providing lead generation for small business owners every month in a couple of select US cities. It came about from a contact in the US so that’s the only reason for the US marketing! What you’ve said about paying taxes and the Sole trader/simpler set-up really helps me, so thank you so much 🙂

    -Ana

    #1243786
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
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    I’ll be providing lead generation for small business owners every month in a couple of select US cities. It came about from a contact in the US so that’s the only reason for the US marketing! What you’ve said about paying taxes and the Sole trader/simpler set-up really helps me, so thank you so much 🙂

    -Ana

    Being B2B makes things so much easier IMO Ana, especially around insurance and check-out.

    I can advise that it’s great to attract ideal customers that care primarily about results, results, results and “storytelling” around ROI works really well.

    Using Groups on FB and LinkeIn also works well eg, telling a story around how a company was doing it wrong or investing in the wrong areas before finding you and consequently increasing profit would work really well in a small business or CFO group.

    Surprisingly, lots of operators still sell the sizzle but don’t actually write or film Case Studies that give people a sense of what they can expect when they put their money with you.

    Who knows, Lead Gen in a “few select” States might lead to 50 select states haha.

    All the best.

    ~Paul

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