Build your trade business from the ground-up with Fusion Group. We sort out the back-end, so you can focus on the doing the work and growing your client base.
We helped Adam Clark from Clark Electrical smash his goal – to create a self-sustaining electrical business that sees the big picture – with minimal headaches.
Stage 1: The Set-Up
Got a glimmer of an idea, a drive to go on your own, and a name for your business? Then we have everything we need to set you up and make your business legitimate in the eyes of the law and the taxation department. Boom – simple as that!
Adam says: “When I went to Fusion Group, I was at zero. One year fresh out of my apprentice training I had different, bigger ideas than the person I was working for and wanted to go out on my own. I’m only 25 but I knew I’d have a private work-base through friends and family, and the old man said he’d back me. The timing just seemed right. You have an idea, but then Fusion Group guides you through those hurdles.”
Stage 2: Structure
Should you trade in your own name, bring in partners, or set up a trust? Fly solo as a sole trader or upgrade to the big guns as a company? This isn’t some arbitrary decision you can make with a coin toss. Choosing the right structure can have massive taxation and legal impacts on your business. We assess your values and goals – both short-term and long haul – to help you figure out a rock-solid foundation, ripe for expansion. For a start-up like Adam’s, the simplest and most cost-effective solution is often to register as a company.
Adam says:: “We decided to register as a PTY LTD from the start. If I set up as a sole trader I would be okay now, but in the future I want subcontractors to work for me. Plus, I wanted to run the company on a business credit card, and to not be personally liable for anything that goes wrong. There are some more start-up costs with setting up as a company but Fusion Group was there to talk me through it – and I know I’ll be better off when tax time rolls around. Some time in the future we might switch to a trust, where I can distribute income to my partner. I think people put themselves back a year or two depending on their aspirations but Fusion Group helps see the bigger picture.”
3. Xero set-up
Once the company is incorporated, we set-up a Xero File (cost: $399.00). Xero is our go-to accounting software for a few reasons. It’s simple, streamlined and almost effortlessly efficient. It’s also perfect for business owners on the go, because you can access data in real-time at your fingertips, around the clock and over the globe. When we set it up right from the start, we can claim GST and tax the start-up costs of the company. Recording all expenses from the first stage of business is smart – and a major bonus for the company.”
Adam says: “I love Xero. It’s a really good program, really straightforward. I’d recommend it to anyone.”
4. Xero Training
Next comes the training. Most tradies keep hectic hands-on schedules and want to keep their involvement in the numbers minimal. We tailor our training packages to the amount of bookkeeping work our clients want – or don’t – want to do, teaching them tricks along the way you couldn’t learn from a handbook. Then we take care of the rest.
Adam says: “I didn’t want to spend too much time running the software myself but I still wanted a basic understanding. Fusion Group gave me a rundown and showed me all the shortcuts and tricks. For example, I don’t use the app – that’s one trick they taught me. You can’t do as much on it, so it’s better to leave it.”
When you see that first big fat payment, it can be tempting to go on a spending spree – or shout the entire pub a round. But unlike when you’re working for the man (and your bank balance seems to magically replenish each week), as a business owner, you can’t get away with living paycheck to paycheck. Especially in the early stages, you should be pouring as much cash back into the business as possible. We recommend that business owners like Adam pay themselves a fixed salary, ideally something modest but liveable.
Adam: “Deciding how much to pay my own salary was definitely the hardest part. You want to pay yourself a lot but you need to build your company the smartest way. Fusion Group said pay yourself and pay your bills, keep it below 35c in the dollar. I appreciated his professional opinion. I also have an apprentice and he gets paid in wages. It’s usually a fixed amount of hours, but if he does overtime I let Fusion Group know and he’ll adjust the payment. They take care of all the invoicing and payments.”
6. And all the rest…
Now that Xero is up and running we look after all everything the ATO needs – all those migraine-inducing compliance and reporting requirements. This includes quarterly Business Activity Statements for GST-earning clients, as well as recording any deductions in Xero that the client can use come tax time to lower the amount they owe.
Adam: “The thing is with business owners, the numbers stuff isn’t necessarily our area. I think even if you’re small, it’s better to outsource it so you can focus on growing the business.
I pay a weekly fee for my Xero accounting and bookkeeping and payroll – I think it’s actually easier to budget for it, for both tax and business purposes. If an accountant comes in once a year or even every quarter, there would be so much cleaning up to do – it would take ages and it would probably cost more too. Plus I wouldn’t be as far along with work and my stress levels would be through the roof!
Fusion Group will advise you on anything – they will ALWAYS pick up the phone and have an honest opinion. I wouldn’t change my accountant for the world.”