How to set up your own sole trader contracting business

When you operate as a self-employed person in Australia who provides services to your clients, you may be classified as a sole trader contractor. If you’ve been thinking of starting your own business and taking on contracts from clients, then this guide is for you.

Steps to set up your own sole trader contracting business

1. Get your ABN

This is one of the first steps you will need to do to make your business official. Your individual ABN helps the government to uniquely identify your business and will be used on all official business documents.

2. Tax file number (TFN)

You will need an individual TFN to register your sole trader business in Australia. This will help not only with tax but other activities like setting up a bank account. When you operate as a sole trader you do not need a business TFN.

3. Register for GST

The Australian Tax Office advises that you may need to register for GST if your business or enterprise has a GST turnover (gross income from all businesses minus GST) of $75,000 or more.

4. Obtain licences and registrations

Within Australia there can be licences and registrations which you may need depending on what your local, state and federal governments may require. The Australian Business License and Information Service is where you can verify what you may need to have in place.

5. Getting your name out there

Once you have all the legalities of getting your business sorted, you need to look at how you are going to let your future clients know that you are open for business. As a sole trader, it is a good idea to get a solid understanding of who your competitors are and how you can stand out from the crowd.

Set up social media accounts for your business. Make sure you keep the branding (use of logos for example) and tone of voice consistent. Many online local community groups often have people asking for recommendations for local professionals and trades to help with certain tasks. Network and advertise until you gain clients, then use their positive testimonials to secure more jobs.

Protecting your business with insurance

There’s one important step that you need to consider when it comes to protecting your sole trader business for the long haul. Consider investing in business insurance if you’re going to go into business for yourself.

Why should sole trader contracting businesses consider business insurance?

There are a few reasons why you may wish to consider business insurance as a sole trader. These may include:

• Financial implications – if you were faced with a claim, would you be able to afford it? There’s also the potential time spent away from your business, which no sole trader can really afford.
• Legal costs – if your claim went to court the costs involved for legal representation can be steep. There are also the compensation costs to consider if the claim is awarded.
• It may be a requirement – depending on the type of sole trader contracting work you perform. This is typically common for professionals who wish to become a member of an industry board and for tradies working out on site.

Arrange your business insurance with BizCover

It’s an exciting and busy time starting your own sole trader contracting business. When it comes to shopping around for your business insurance, BizCover makes it easy for you to compare multiple insurance quotes.

At BizCover, we provide multiple quotes from some of Australia’s most trusted insurers, ready to compare and get your business covered. Get a quote today by visiting us online or giving us a call on 1300 249 268.