It was wonderful to see everyone again and also meet all the new faces who attended our SB² Meetup. We were joined with our special guest Roger Hawley, who is the owner of Hawley Accounting. He gave us some great tips on choosing the right business structure when it comes to setting up your first business.
From personal experiences, Roger believe that despite all the benefits of being a Sole Trader, the term “Sole Trader” itself can create a negative perception of your business. This is where a prospective client might assume that you are not registered for tax and therefore is making less than $75,000 a year. This assumption will have a negative impact for your business and is something worth keeping in mind.
Luckily, there are other options such as setting up your business as a Company. Many people avoid this option because of the $1000 initial start-up cost; however, this is a small price to pay considering the potential long-term success. From his personal experience, Roger advised that “If you’re serious about business don’t be a Sole Trader, be a Propriety Company. If you have passive income, then set up a Trust”. We do recommend you seek professional advice on this topic as everyone’s circumstances and the outcome will be different.
Roger shared his biggest mistake was being afraid to outsource tasks; he soon realised that it was unproductive to spend all his time and energy on essential tasks just to keep the business going when he could instead use it to be innovative and grow his company. To put it into perspective, if your service costs $200 then you can outsource a Book Keeper for $50, not only would you make a $150 profit, you can have your tasks completed by a professional and also gain more free time to innovate. These benefits are more valuable than the extra $50 you would have earned if you spend all your energy on the essential tasks.
Roger also highlighted his mistake of underselling himself and his service. As a new business it is understandable that you want to compete on price but underselling your service can have a negative long-term effect on your business. When you undersell yourself, you not only missed out on the profit, but your clients will start to undervalue your service as well, as the saying goes “you get what you pay for”.
Another issue Roger mentioned is client’s expectation for you to keep prices low, however when you’re ready to raise the price, they will become dissatisfied and search elsewhere. Therefore, underselling yourself is not an effective strategy and Roger advised that you should initially spend 85-90% of your time on sales. This way you can increase brand awareness without compromising on long term profit and growth!
We had some great business tips from Roger and got to learn more about what others’ hurdles are. It’s always good to have the support of all attendees, and we would like you to be a part of our conversations. So, join us at our next meeting on the 12th June at Bedouin Brew Café where Matt Heywood from Heywood IT will be the guest speaker.
RSVP to firstname.lastname@example.org and join us at our next event!