An Aussie Tradie's Guide To Budgeting For Your Small Business
For a vast majority of the population, budgeting for your business is, at best, a chore. And a lot of new tradies in Australia are struggling to put together a budget that works for their small business, while still being realistic about their wants and needs. You can always consult a professional to guide you on your budgeting journey, but we’ve taken your basic need-to- knows and put them here for you- ‘cos we know a good tradie has DIY in their blood, and might want to have a crack at it first.
Either way, a sound budget is crucial to your trade empire taking off, so make a note of these tips, to start assembling your most effective budget yet.
Streamline and Simplify:
Setting goals is a great way to show how your budget is going. You could aim to save a certain fraction of your income, or a certain amount every week. Make sure you start with manageable goals and gauge your future goals from there- there’s no point deciding to cut out all your beer money for the week, or stop getting three coffees a day if you’re going to get to Wednesday and pop an eyeball. Instead, make small adjustments (like making coffee at home and bringing it in) and make your way forward from there.
Be Bank Smart
Some things are easy to pay for, like an afternoon pick-me- up snack from the servo. Some things are hard, like bills. A quick way to reverse this is to look at your payment methods; use automatic bank transfers to take care of bills, loan or credit card repayments, on the day when you’re expecting your pay, so that the debt is cleared before you’ve had time to rack up any more; and carry cash for life’s little things, you’ll see that $50 turn in to two $20’s, then down, and down, and down… Once that starts happening, you’ll find yourself more aware of all those ‘little’ expenditures.
During your career, you’re going to rack up a few expenses to maintain your business, like tools, transport, clothing… The list can go on. So you need to look at all your tax deductible purchases, otherwise you’re just going to end up treading water. Look at these tax deductible expenses, and make a note of them for your next work-related purchase.
What’s a tradie without his tools, after all? Yep, just about every tool you use is tax deductible, with general rules indicating that if it’s under $300 you can write 100% off as a tax deduction that same year. When your tool, or tools, are more than $300, you will need to claim a decline in its value over a few years. If these tools are fixing up your bathroom sink at the same time as someone else’s, you’ll need to mark that down somewhere, and keep a record of how much time it’s being used for personal reasons.
If your assortment of tools is too big for your belt, and you need to move them from A to B to get the job done, then you can claim these costs back too, including petrol, car servicing, and even public transport. As one of Australias noble tradies, you’re likely to be in constant need of your tool set- judging from this, nearly all transport is tax deductible if your tools are on site with you. You can even claim a deduction on costs surrounding travel for learning or skills development. Flying from Perth to Adelaide for an upskilling course? Keep that receipt, mate.
Working outside -for longer than a brief period of time- with tools means blades, sun, dirt, splinters… just about anything can get in your eyes. Invest in some sunglasses and protective eyewear, and hold on to proof of purchase to iron over during tax refund season. And don’t forget the rest of the glamour that comes with the industry; rubber soled and steel capped boots, fire-resistant high visibility clothing, heavy-duty shirts and overalls… This is all tax deductible. Need to wear a uniform? Odds are that you wash it, either yourself or at a laundrette. Well, you can even get a deduction on your laundry services to an estimate of $1 per load of washing.
So if you’re a tradie looking to balance the books in your favour, then keep this information close by for future reference. Another great way to bolster your income is to create a clean, powerful online presence, to show potential customers who you are and the kind of workmanship you provide –and this happens to be our area of expertise. You know when you turn up to a new job, and some poor sap with a nail gun has already made a mess of it, when he should’ve left it to the professionals? Yep. We know that feeling too. Here at Dilate, we offer complete digital marketing services -from design and content, to SEO and Adwords campaigns- so if online marketing isn’t really your thing, rest assured, it’s ours.