Freedom of Choice:
You have the Freedom of Choice to
start up your first business in front of this computer - if it's in your own
home. Come to think of it if this computer is in a School, Library or Net
Cafe why not here?
A Bunch of Books:
A Business is really only just a
bunch of books - it's not a place or a person.
An ATO Book Audit:
If the ATO want to audit your
Business they wont come and look at the dust on the furniture or the state
of the kitchen or the unmade beds. They want to look at your books. If your
younger brother is the one who hands the books to them the ATO person may
say "Thank you. Now bugger off so we can use this (filthy) table to
inspect the Business (books)".
Computer Business:
Some of the "books" of the
Business can be Electronic. So, rather than sitting at a filthy table
they can sit at a very clean Computer. If you have all the Business
information on disk the ATO Auditors might prefer to check your
"books" at their own filthy computer in their own smelly, badly
air conditioned and filthy office. (I'm trying to get the
cleaning/maintenance contract for the ATO)
Why start Your first
Business in Your Own Home:
First you save on rent. Next, the
best first Business is started when you are gainfully employed by someone
else and living at home. This allows you to use your PAYG tax to help
finance your Business and keep the overheads down.
Travel to
Work?
Travelling to and from work by vehicle can be tax
deductible which - at around $2500/annum perhaps more tax deduction - is
better than a poke in the eye with a blunt stick.
80%
of Businesses go Broke:
in the First Three Years because they bit off more than can be chewed
- and paying commercial rent is hard to swallow for your first shot at being
in business - and you haven't yet created a client base.
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Learn from a Pro:
The best lesson on first premises - we don't give
advice - can be learnt from reading the short version biography of the "greatest
entrepreneur Australia has ever had - Mac
Robertson of Chocolate and Croquet fame".
He started in his Mum's bathroom and ended up being the biggest Taxpayer
in Australia's History.
When
to Rent:
When you have a biiiiig client base or your turnover exceeds
$1,000,000/annum it might - might - be time to move out of Mum's kitchen.
With $1M turnover your net profit margin might be $100K/annum which would
allow you to employ someone to do the hard work while you play Croquet -
Well!
Mac
Robertson did.
Rented
Commercial Premises:
If you have commercial rented premises you might need office
staff to answer the phone and sweep the floor and all those things you
need to do and have to justify the expense.
Keep
This in Mind.
Never hock your Business to buy a home in which to
live. Instead, hock your home to invest in your Business. In the former
the interest and all other expenses are not tax deductible - but in the
latter they are tax deductible. Lesson learnt?
DON'T
YOU DARE:
Buy a MacDonald's Franchise before you have
learnt about business. Preferably on a MacDonald's Team. Without doing an
apprenticship for a few years in business - running one and then owning a
small one first - you're asking for biiiig trouble.
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