Sole Proprietorship – standalone business that only has one owner who pays the personal income tax on profits earned from the business. This allows the business to have complete control over every aspect of the business. This means that the business is essentially considered an extension of the owner, but you can operate under a chosen number not necessarily your specific name. Since the beginning of the covid pandemic, Australia has seen a steady rise in sole proprietorships.
Aussie Business
According to Inside Small Business 1.5 million is the number of current sole proprietor businesses operating in Australia in the period between 2020-2021, with this number likely increasing throughout the covid pandemic with Australians being at home more & having more time to focus on their personal ideas outside of their regular employment or taking over if stood down or lost position during that time.
Positives of Being a Sole Trader
Many Australians have moved to the notion of operating their own business based on the benefits and requirements outlined in the Sole Trader planning page through the Government website such as; simple set up, having full control of your own assets, being able to make all the business decisions as opposed to following orders and the ability to work the hours that suit you best. This setup comes with several possible advantages; you are in complete control, you keep all the profits, maximum privacy and depending on what your business is the start-up costs are likely to be lower.
Struggles of Being a Sole Trader
Conversely the potential sole trader needs to be aware at the outset that it is not all simplistic and that hard work is involved in making a successful business. A person contemplating starting a sole proprietorship business needs to understand that you as the individual have full liability for debts, noting that there is no legal distinction between your private finances and your business assets.
Your ability to raise money can be limited and measured largely on your required expenses versus the money you are bringing in. While it can be a positive that you are your own boss and the decision making comes down to you, it can also be a challenge as you are solely responsible for the tricky decisions that can make or break your business. Finally, you may not be able to afford to take on employees, which means you are required to be fully available to run the business meaning taking a break or holiday can be very limited.
Retirement
Since the introduction of Superannuation this has become the focus of the Government with an aging population. With the increase in retirement age, the age to receive the aged pension has increased by multiple years and therefore people are looking elsewhere for retirement support. This is where superannuation has become hugely popular. However, as a sole proprietor you are not required to pay yourself super. A lot of people choose this option in order to maximise their profits up front, this means however that retirement may be further away for the average Australian running their own business.
Moving Into Your Own Business
With all of the above considerations, making the move with a great business idea into a sole proprietorship business is still an important part of Australian commerce. Young Australians wanting to make the move from working for a company or leaving high school and wanting to take their own path still need guidance and support to achieve a successful business. Getting an MBA online is a great way to do this as it allows the individual freedom to study when it suits them and still work on starting their business or working part time to increase funds to do so.
Enrolling into an MBA course gives the student 2 years to complete the requirement modules and assignments with support from trained staff available. The online course also generally has multiple intakes each year (January, March, May, July, August and October) offering increased flexibility to suit the individual person when they are ready to commence.
Final Steps
Once you have begun or completed your training and started to get an idea of everything involved in the process, young Australians can start putting these ideas into action; deciding whether you want to have the business in your own name or under a pseudonym, checking whether that business name is already in operation, if not register the business and Trademark it, which can be simply done online now. You must also ensure you have obtained an ABN which you can apply for through Australian Business Register and depending on your business you will likely need to look into the appropriate licences and permits.
Overall, the most important thing to remember when wanting to start your own business no matter what your age is simply to seek guidance and utilise the resources available to you. Speak to your networks including your trainers and seek out in your community the people who have started their own businesses to ask for information about their journeys as a learning opportunity for your own endeavour.
