Tax Basics Explained Simply

Tax… we know it can seem overwhelming and quite scary when you’re first starting out. So we thought we’d put together some information for you about the basics of tax in Australia. All of this info is available elsewhere on the internet, but it’s here for you all in one place. We’ve also included links for further information and advice.

Now, take a breath as there is a fair bit of info coming right up. Just take it in bit by bit!

Why not start by figuring out if you are actually running a business?

Logical, I know! Some of the things to take into account include whether you have actually started to undertake business activities or started to “do” business with others (instead of just planning to at some point in the future), whether you intend to make a profit (perhaps now, perhaps down the track a little bit – the intention just needs to be there), and is there repetition and regularity to your activities.

Most businesses operate for a purpose and their everyday activities reflect this – they do the same or similar things in order to operate. The Australian Taxation Office (ATO) is here to help with some basic info for you about working out if you are running a business.

Are you running a for profit or a not-for-profit (NPF)?

According to the ATO, “a non-profit organisation is an organisation that is not operating for the profit or gain (either direct or indirect) of its individual members. This applies both while the organisation is operating and when it winds up. Any profit made by the organisation goes back into the operation of the organisation to carry out its purposes and is not distributed to any of its members.”

What does this mean? NFP’s still have staff and pay wages, including to any management peeps, but any profit that is generated is not given out to directors or employees as dividends or bonuses, that profit stays in the organisation and is then used to run it.

Some examples are churches, sports clubs, environmental protection societies and charities. Click here for more information on NFP’s.

For info on registering a NFP as well as registering click here.

If you intend on making some profit and paying out some of that profit to owners or directors, then you are probably NOT a not for profit!
Australian Business Number (ABN)

An Australian Business Number is an 11-digit number that is unique to your business.

What is it used for? It helps other businesses to easily confirm your details, it indicates to other businesses that you are operating a business (even if as a sole trader), it is required if you are claiming Goods and Services Tax (GST) credits, among other tax related things.

If you’re operating as a sole trader, partnership or company, you need an ABN. If you’re operating as a NFP, you may or may not need an ABN.

It’s pretty simple to get yourself an ABN, and it doesn’t cost anything. You can apply online .

More info for NFPs is available in regards to ABN requirements.

According to the ATO, “Anyone carrying on an enterprise (this is usually a business) should quote their ABN in relation to goods or services they supply to another enterprise. If they don’t, the general rule is that the payer must withhold 46.5% from the payment to the supplier (you) and send the withheld amount to the Tax Office. Some payments are excluded from this rule.”

So once you’ve got your ABN, remember to use it, otherwise the people you deal with may hold on to 46.5% of what they owe you, ouch!
Australian Company Number (ACN)

According to the Australian Securities and Investments Commission, “Under the Corporations Act 2001, every company in Australia has been issued with a unique, nine-digit number, an Australian Company Number (ACN), which must be shown on a range of documents. The purpose of the ACN is to ensure adequate identification of companies when transacting business.”

So what this means is, when you register as a company, you will receive an ACN. Often your ACN will be very similar to your ABN, only nine digits instead of 11.

For more info check out the ASIC site.

If you operate as a sole trader, you can do this under your own individual tax file number (TFN).

If you operate as a partnership, company or trust, you must also have a business tax file number. If you operate as a NFP, you might need a TFN.

For help in figuring out if you need a tax file number, check out the ATO site.
Your Accountant

It’s never too soon to get an accountant for your biz. Look at it this way – they live and breathe all this tax and compliance stuff! If you’re not sure about tax, account keeping, etc, why not go to an expert?

We know it is scary and you think straight away….”there is no way I can afford an accountant”! But you will be surprised at how affordable they can be, and how much they can SAVE you, thus paying for themselves in your business! The Frank Team can recommend a few great accountants – who are young entrepreneurs – who are really affordable. Ask us for their contact details.

Remember there’s no obligation to stick with the first accountant you find. Go and meet a few, find one that you trust and enjoy working with, and who obviously knows what they’re talking about. Here at The Frank Team have been with the same accountant since 1998, she is awesome!

Accountants’ fees vary a lot. Be sure to ask about fees and find an accountant that you feel is affordable. $500 per hour charge rates might not be in the budget to start off with, so why not support another small business person? Also remember that meeting all of your compliance needs could end up saving you a lot of money and hassle in the long term.

Remember also that your local Business Enterprise Centre can be a huge help here too – and they give FREE advice!
Record Keeping (or bookkeeping)

What records do you need to keep and for how long?

Keeping records of all your financial transactions (money in and out) are vital to your financial record keeping, whether you do it on a day to day, monthly or even annual basis.

All payments you make, all money you receive- receipts, invoices, bank statements, proof of purchase of assets, everything! With as much detail as possible – job numbers, what it was you bought if it isn’t clear, who you just made that cheque out to. Months later it will be extremely difficult, if at all possible, to remember.

Start early with this stuff and set up a way of keeping track, trust us!

We know of some young entrepreneurs who were years behind in their recording and tax and it not only cost them in terms of paying their tax bills but also cost them huge amounts of time to back track. So even if it is shoe boxes that are labeled, set up a way of keeping track of all money in (and what it was for) and all money out (and what it was for).Then an accountant will be much more useful for you.

Keeping all of your documentation together means when it comes time to process all of your accounts, the info is ready to go! It also means that if your accountant comes back with questions, you can look anything up that you need to, with minimal effort.

We keep our financial records in ring-binder folders, sorted month by month; if we ever need to look up a payment, find a receipt, even find companies’ contact details, we can generally find it within just a couple of minutes. Everyone needs their own filing system, electronic or paper/manual. You can even use online Google doc spreadsheets to keep yourself sorted.

If you were ever audited by the ATO, or needed to complete a financial audit for any reason, you could get in a lot of trouble for not having all of your financial records. So make it easy for yourself!

By law, you are required to keep financial records. As a general rule, your records should go five years back for regular income tax purposes, though it does vary for other taxes. For more info, check out the ATO site.

If you’re a NFP, more information about record keeping requirements is available here.
Cash vs Accrual Accounting

Ok… so now we’re getting into the technical stuff. Cash and accrual accounting are just two different ways of keeping track of your finances.

Cash accounting records only the amounts of cash that have flowed in and out of your business. So when you receive $100 for your product, you record that sale. When you pay $40 to your supplier, you record that purchase. Cash accounting is definitely the easiest place to start.

Accrual accounting records all of the expenses and purchases paid by your business, as well as those that are currently due or outstanding. So if you sent a client an invoice for $100, you would record that as a sale, even if you haven’t yet received that money into your bank account. If you receive an invoice from a supplier for $40, you record that purchase/expense. You then also have an Accounts Receivable account/category in your accounting system (money that you are due to receive) and Accounts Payable (money you need to pay).

An accounting package of some sort will help you with this system, if that is what you choose. You would use accrual when you have larger volumes of transactions happening and you need to be able to track and predict cash flow.

Tax Returns

If you’re operating as a sole trader, your business tax information will go into your individual/personal tax return. You may need to complete some extra schedules/forms, and record all business income and expense. Your business profit will then be taxed at your marginal rate of tax. For details go to the ATO site.

If you’re operating as a partnership, the partnership lodges its own tax return. BUT, because of unlimited liability, the income and expenses from the partnership’s tax return then get allocated to the partners. This means, on your individual/personal tax return, you will need to report your share of the business’s income and expenses. Your partnership profit will then be taxed at your marginal rate of tax. More info here.

If you’re operating as a company, your company will need to lodge a tax return. You will need to show all business income and expenses. Your business profit will then be taxed at a rate of 30%, or 30 cents per dollar. And yes that means for any profit you make, 30% of it is paid to the government. More details here.

As soon as your business starts to earn an income and incur expenses, you need to start thinking about your tax return. Your first financial year of operation (even if you start your business in May) is the first year you need to lodge a tax return or include biz info in your own personal tax return, depending upon the business structure you’ve chosen.

If you’re operating as a NFP, you need to be aware that only certain types of non-profit organisations are exempt from income tax. Charities and income tax exempt funds require endorsement from the Tax Office to be exempt from income tax. Other non-profit organisations can self assess their exemption.

Many non-profit organisations are taxable and may need to lodge an income tax return and pay income tax.

Taxable non-profit organisations are generally treated as companies for income tax purposes, whether or not they are incorporated.

More info here.
Tax Concessions for Small Biz & NFPs

If your revenue is under $2 million, you might be eligible for certain tax concessions. Simpler depreciation, entrepreneurs tax offset, the list goes on.

For more info, check out here.

This is where an accountant can come in really handy. Do your research; list your questions then book in some time with an accountant or Business Enterprise Centre for some specific advice for your business.

If you operate as a NFP, you may be eligible for a number of tax concessions. For more info, go here.

It really is up to YOU to be aware of and find out what obligations your business has in regards to tax, and what concessions it could be eligible for.
Goods and Services Tax (GST)

In Australia, GST is incurred at a rate of 10% on top of the company price for many goods and services. So lets say you go to clothes store and buy a new shirt, it will have 10% GST included in the price already.

You don’t need to register your business for GST until you have sales of up to or over $75 000 a year, including GST (your portion of the sales would be ten elevenths of $75 000, or $68 181).

It’s up to you if you register for GST under the $75 000 threshold, or under $150 000 if you’re a not-for-profit. There are some exceptions – like if you’re a taxi driver. Check out www.ato.gov.au for more information.

Being registered for GST means that you are helping the government collect GST. This also means that you can claim credits for any GST that you pay in the price of your business purchases.

When you are registered for GST, you need to show this information on the tax invoices that you send and give to customers when you make a sale. In fact, the difference between an invoice and a tax invoice is being registered for GST – if you are not registered for GST, you are using an invoice. If you are registered for GST, it is known as a tax invoice.

We have a sample tax invoice for you to use if required.

You can register for GST when you are applying for your Australian Business Number; through your tax agent (your accountant); or through the ATO. For more information, check out the ATO.

See Business Activity Statement below for more info about reporting on GST.
Pay As You Go Tax Withholding (PAYGW)

What is PAYW, I hear you say?

Pay As You Go tax is the amount of money that is withheld from your wages each week/fortnight/month. If you’ve ever received a pay slip, you’ll notice it has Gross Wages (e.g. $500), PAYGW (e.g. $60) and Net Wages (e.g. $540).

Now that you’re running your own business, it’s up to you to withhold that PAYGW tax (for yourself and for any staff that you employ), and then pay it to the ATO when it comes to BAS time (see below).

Personal income tax rates change from financial year to financial year. Which means when a new financial year rolls around, you need to check the new rates at which you should withhold tax.

You can get updates for your accounting software, like MYOB, which have the current tax rates. Or you can check out the ATO’s online tax calculator. It’s a simple tool to use; you plug in each person’s information and it tells you how much money to withhold for that pay period. Easy! Check it out here.

If you operate your business as a sole trader or company, it’s likely you pay ‘pay as you go withholding’ (PAYGW) installments at different times throughout the income year as you earn your income. These installments are credited against the total amount of income tax you are liable (must) to pay for the income year.

All that means is the government keeps track of those payments, and at the end of the financial year when you work out how much PAYGW you are required to pay for that year, you see how much you have already paid and then either just pay the difference or get a refund back from the ATO.

If you operate your business as a partnership or trust, you do not have to pay PAYG installments. However, you may have to pay PAYGW installments on your individual share of your partnership’s income or any income you receive from your trust.

If you operate as a NFP and you have employees, you need to withhold PAYGW just like any other business. You’ll need to determine who is an employee, a contractor and a volunteer. NFP’s also have some fringe benefits tax concessions for additional benefits for their employees. For more info, check out the ATO.

Handy Hint: have a separate bank account in which you collect your GST and PAYGW tax, and even superannuation (so you are moving money into this account regularly). If you put these small amounts away each week, or fortnight, whenever you receive payment, when it comes time to pay your BAS and superannuation, you won’t have to scrounge the money out of your other accounts. Streamline this from the beginning. There are lots of banks now that as part of your business account can provide you with a tax management account that has higher interest rates, so check with your bank.
Business Activity Statements (BAS)

So now it’s time to report to the ATO…

Generally, new businesses use an activity statement to report and pay their GST and PAYG withholding.

When it comes time to do your Business Activity Statements (or BAS as most people call it), you will need to include in your declaration the amount of sales you made (money IN); and the amount of GST collected. You will then need to include the amount of purchases (money OUT) you have made; and the amount of GST you have paid. Then you will be required to either pay the Australian Taxation Office the difference (if you have collected more GST than you have paid out) or this will contribute towards a refund from the Australian Taxation Office (if you have paid more GST than you have collected in sales).

So depending on the difference between what you have collected and paid you may have to pay the government, or they will pay you!

BAS’s can be lodged either monthly (if you make a lot of money), quarterly (if you make a bit of money) or annually (if you don’t make much money).

In each BAS, you will need to outline:

* Sales made in $ (sales your business completed)
* GST on the sales made in $
* Purchases made in $ (things your business bought)
* GST on the purchases made in $
* Wages for the period
* Pay as You Go Withholding tax incurred on those wages (which you’ve been holding for your employees, just waiting to pay to the ATO)

You may also be required to pay Pay As You Go Installments (PAYGI– different to Pay As You Go Withholding [PAYGW], which refers to employees personal taxation. We’ll call them Income Tax Installments for now to keep it simpler) to the ATO, if your business has reported an end of year profit before and you are expecting to make a profit again this year. This installment will be outlined on the BAS report you receive from the ATO.

Once you are paying PAYG installments, any installments you pay during the year are credited towards your final tax assessment after you lodge your income tax return. What does that mean? For example, if you make four installments of $1000 throughout the year and your end of year company tax bill is $4200, you’ll only need to pay the ATO $200, instead of $4200 in one big go).

The amount you need to pay to the ATO will consist of:

+ GST you collected

- GST you paid (you receive a credit for this)

+ PAYGW tax that you collected/withheld from your employees’ wages

+ Income tax installment (if relevant)

For more info, check out the ATO here.

REMEMBER – if you have any questions, find someone to ask. The Frank Team can get your questions answered – just send them through – we will then share the answers with all of the young entrepreneurs in the network.So send us your questions.

Your accountant, lawyer, Business Enterprise Centre are great as well or just give the ATO a call – we’ve had to call them in the past and found them to be extremely helpful!

Don’t bury your head in the sand about tax stuff, or ignore what needs to be done. Even though it’s not as interesting or exciting as some of the other aspects of running your own biz, it is vital to your ongoing success.

Michael Jarocki – CreditCardFinder

Name: Michael Jarocki
Age: 19
Field: Search Engine Optimisation (SEO), Internet Marketing
Interests: Music (Metal, Electro), Guitar, Snowboarding, Cricket, Internet, Late Nights with Friends.
Website: http://www.creditcardfinder.com.au
Contact: mike@creditcardfinder.com.au

High School Boredom – Year 12, 2007

Throughout high school, although I had interests and hobbies, I lacked any sort of educational or career-based direction. While this is fairly normal for the beginning of school, by the time Year 12 rolled
around, it was becoming a worry.

At one point I wanted to be an actor. Then a professional snowboarder. Followed by a musician. Anything that came to mind was fairly short-lived.

Plain and simple, I was bored at school. The only one of my subjects I had relative interest in was English, and even then it was completely subjective to what we were doing. Crime fiction for instance held little interest for me, so I practically stopped attending my extension english classes, and the whole unit went to waste.

One day during a typical dreary economics class, I noticed my friend browsing some forums. Gladly diverting my attention to his laptop, I questioned him about the forums he was browsing – they were internet marketing forums. At that moment I had an epiphany – I can make a career on the internet, moving at my own pace and enjoyment.

I knew making money online was possible, but had never really considered doing it myself till that point.

That night at home I suggested my new found interest to my parents. To say the least, my idealism was not met with the same enthusiasm. Just like the majority of Australian parents, they wanted nothing more than
for their son to attend university and settle down in a nice respectable job. I told them I wasn’t interested in university, and as expected they commenced a furious rant of how I wouldn’t achieve anything without educational credentials.

While it was a blow to my excitement, it didn’t hinder me from my new career adventure.

In 2007, the year of my Higher School Certificate, I spent July to November studying the basics of internet marketing and seo, instead of studying for my HSC.

When my UAI of 68.8% came, I tossed it aside as it held no relevance to my career choice. My parents weren’t too phased about my results – they figured I could work my way at a lower-grade university up to achieve anything English/Journalism related with my mark. However, they did rage when I told them I hadn’t submitted any uni applications for 2008.

Excited Entrepreneur – 2008

Fresh on the internet money-making scene, I was super keen and enthusiastic to absorb and learn all the knowledge I could. While I used to play video games, they didn’t hold any interest or procrastinating value anymore – the internet was (and still is, in a way) a video game to me. To beat the first level, I set a goal at
making $10 solely online.

To achieve this, I began creating niched sites, such as Eye Diseases and Mobile Phones with Google advertisements, or ‘Adsense’ on them.

For those unaware, Adsense places advertisements similar to your site’s topic and you earn money everytime somebody clicks on them.

The sites were up and running, and spammy to the max. I spent up to 10 hours each day writing content and experimenting with my websites. I frantically logged onto my Adsense account by the hour to see if I’d
made any money.

Shock! A click! 18 cents! MY hard-earned 18 cents!

Grinning ear to ear in pride, I show my girlfriend, who replied with a blank face of dissatisfaction, maybe even a hint of embarrassment. But I didn’t care. I didn’t expect to retire at 19 after a couple of months work. As long as I was making progressively more money, whether it was cent by cent, I was pleased.

April rolled around and my parents were beginning to probe and doubt my line of work.

“How much money did you make today, 32 cents?” my dad would ask mockingly.

He revived his rant of how I should be studying at a university. I retorted that this is what I’m interested in, and YOU don’t have to pay $18,000 in uni fees for me to do it.

“No one will ever take you seriously without a degree. You need one to be successful” he stated.

“Are you saying no one without a degree has never achieved success?” I replied. He shook his head and walked away.

Nevertheless, I carried on. I knew at this point my skills in the field were above average and I could possibly get employment. While it was my dream to ultimately work for myself, I was desperate to show my parents I could make more than $2 a day.

In early May, one of the my friends replied to me with interest for me to work for a website and I was on board after an interview. I began making some respectable income, and I was on top of the world.

I was given the reigns of Credit Card Finder, which I still administrate to this day – which allows me to now work comfortably from home. Since I began working, editing and improving the site, revenue has increased by approximately 2400%, and growth is set to continue.

Reflection 2009

As you may have picked up throughout my story, the approval of my parents was, and still is a very important factor to me. To this day, while my parents are pleased with my success, I know deep inside that they would prefer me to still go on secondary education. Fortunately, my own drive for entrepreneurial success outweighed any lack of support.

I did not expect to reach the level I have in such a short period of time. If I had only increased from $2 a day in 2008 to $6 in 2009, I would still be stoked. I take great pride and satisfaction in any of my self achieved results, no matter the rate of progress.

For anyone interested in making a career online – there is no easy money. While it can come to you quicker or slower than most, ultimately you’ll need to put it in the hard work and originality to rake in the revenue.

Why Do I Love My Job?

There’s nothing more satisfying for me than seeing my hard work reflect in the search engine rankings. The basis of my job involves me targeting specific Google search terms, i.e “credit cards” and aiming at making that term the #1 result for when Australians ‘Google’ the term. The thrill of achievement motivates me to maintain the ranking, while there are still endless other search terms to become #1 for.

From time to time I browse university courses to see if there is something that would interest me, but to no avail. I imagine even if there was, It would be like year 12, where only certain units and topics would interest me enough to attend and excel. That’s the wonder of making money on the internet – there’s a thousand ways to do it, and you have the freedom to attempt any you wish, at your own rate.

The internet is always changing, and thus I can never truly be bored when I have to re-learn and be on form with its changes, in order to stay on top.

I would love for anybody with any questions or queries about my line of work, Credit Card Finder or anything else to contact me. My best wishes to any of you who personally wish to go down the path of an internet entrepreneur. Maintain the interest and you’ll get the results.

Young Entrepreneurs – In The Flesh!

Shining Stars!

You wanna get inspired by some young entrepreneurs? We have interviewed some awesome young entrepreneurs that we know you will love! Read the interviews and profiles now.

And these are just the beginning. We will have new profiles, interviews and stories direct from young Aussie entrepreneurs all of the time.

If you’re a young entrepreneur and would like your “name in lights” on our site then CONTACT US and we will get it happening.

Get inspired by these young entrepreneurs now.

James Greig – Bloomtools

A web empire, a network of franchises, and all by the age of 24.

At 20 years of age James Greig left university with plans to start his own web empire. Four years later young entrepreneur James is a Founder and Director of Bloomtools, which is now franchising across Australia and has developed hundreds of websites for Australian businesses.

James started out working from a client’s office in exchange for building their website and business management system. His knowledge and natural business acumen were obvious from the start when he developed a software system for the client that reduced a six hour task to six minutes.

From there, the young entrepreneur built a team of some of the best programmers, graphic designers and marketers in Australia and began developing websites and online tools for local Gold Coast businesses.

“I realised that customised websites were just too expensive and too complicated for the average business to use, so I began to build products that could be used across many businesses, and would make websites more effective for business yet still extremely affordable,” James said.

In 2005, at the age of 22, James met his future business partner, former business coach and entrepreneur Tracey Voyce who was looking for someone to help her create a database marketing system for businesses.

Together they honed the business and created a range of web and email marketing products, designed specifically with business in mind.

These products proved extremely popular with local businesses and soon the business expanded with a number of resellers across Australia.

“I think what sets us apart is the fact that we understand what works for businesses online and our whole team is really passionate about helping businesses get results from the Internet,” said James.

Bloomtools has grown over 180% in the past year and now employs 19 staff, with clients such as OK! Magazine and Wide Span Sheds, and celebrity endorsements from Tim Campbell, Grant Denyer and Ian Maurice.

Earlier this year, Bloomtools launched a franchise business, which has already been taken up in a number of locations across Australia.

Well known businessman, and Action Coach master licensee, Bruce Doyle, was one of the first franchisees, launching Bloomtools Melbourne Central.

“When I came across Bloomtools, I knew they were the type of company I wanted to be associated with, because they are so passionate about business and the Internet and they have the world class tools to back it up,” Bruce said.

James said his aim was to franchise Bloomtools across Australia and New Zealand and soon the world.

“We have already had a number of inquiries from people wanting to take up the Franchises overseas,” James said.

James’ advice to other young entrepreneurs

* Believe wholeheartedly in your vision – six months into my business I saw the void in the market and knew that my business would be big, unique and successful. You need to have a clear dream and vision for your business and know exactly how it will be and what it will look like.

* Know your market – Find out who they are, what they want, what they need and other brands they use and respect. The more you know about your audience, the easier it is to engage them and tailor your services to them.

* Be unique – no matter what industry you’re in, there are a lot of people doing the same thing. Create your point of difference and live by it.

* Have the right people around you – associate with people that have the same energy, positiveness, commitment and belief in your vision. Hire the best people you can afford and treat everyone around you with respect.

* Be a sponge – always ask lots of questions of people and listen to what they have to say. Knowledge is power.

Klaire & Travis Johnston – Mobibudget

Meet Klaire & Travis Johnston, creators of Mobibudget. Frank Team caught up with young entrepreneur 30 yr old Klaire from QLD to find out about the biz & where their unique idea is taking them! Read on…

How do you describe your business to people who ask what you do?

Mobibudget is not only the easiest way to create a budget, but the easiest way to STICK to it. It is the world’s first truly mobile budgeting program – accessible via both the internet and mobile phone. Mobi’s standout feature is that it can tell you how much you have left in your budget BEFORE you spend … no excuses for not reaching your financial goals!

How did you come up with the idea?

Living on the Gold Coast, my husband, Trav, and I wanted to spend more time hitting the beach than doing our finances. We were motivated to spend better and save more, but were unable to find a budgeting tool that was simple and effective enough… so we decided to create our own.

How long have you been working on it?

Mobibudget, in its infancy, was simply a spreadsheet where we tracked our spending and saving. The catch was we couldn’t generate reports or analyse the data effectively enough and at the click of a button (there’s nothing wrong with wanting to be a lazy budgeter!). We budgeted this way for nearly two years, then launched Mobi late in 2006. Mobibudget is now in its second iteration, with enhanced features but the same adherence to simplicity. It is designed for the everyday budgeter – student, parent of six, retiree….

What is the biggest challenge you’ve had to overcome?

There are a number of technical issues relating to phone and browser compatibility that Trav has had to work very hard on. That’s all come together neatly and we are continually developing the product and its features based on user feedback. Surprisingly, a great challenge has been to explain the difference between Mobibudget and some popular mainstream accounting packages. Mobi is not about reconciling bank accounts or the complex number-crunching that makes many of us run a mile! It is simply about saying, “How much do I earn? How much do I spend … and what on? And how much do I want to have left in between?”

What do you like most about being in business?

We thrive on being able to take to the market a product that helps everyday people, just like us, get better control of their finances and therefore positively impacts their lives. What a buzz!

What do you like least about being in business?

Being in business for ourselves, gives us so much more than working for someone else. Running a business doesn’t initially give you the stability you might expect from a regular salary, but the benefits more than make up for that. You could, on any given day, give us less hours to work and we wouldn’t complain!

How do you market your product?

Mobibudget is marketed through a variety of channels – ABC radio helped kick start our promotion in 2007 and word of mouth always plays a big part. We also have a sponsored link on Google, which has directed some business our way. We are looking to launch Mobibudget to the international market shortly and are always investigating low cost yet effective ways to get Mobi out to people who need it most.

What advice do you have for young people out there trying to start a business or community project?

• Think about what you really love doing – that sort of pursuit will always be less of a chore and to a great extent provide its own inspiration.

• Work with your strengths and, while you need to be a good ‘generalist’ in your area, try and build a team of experts (such as marketing, accounting, engineering specialists) to support you in your venture, whether its to be part of your team or simply as a ready resource for advice.

• Finally, research, listen, and be very willing to learn. Go for it!

Wanna do some budgeting of your own?? Check out Mobibudget

Sam Cawthorn – Be Motivated

Meet Sam Cawthorn, an amazing young entrepreneur running his own business in Tasmania. Sam knows that
overcoming challenges and taking life by the scruff of the neck is what it takes to achieve goals! Plus he is the current Young Tasmanian of the Year….well well!

Check out his interview below…

How do you describe your business to people who ask what you do?

Be Motivated specialises in developing and unleashing personal and organisational creativity, uniqueness, innovation and diversity. We are committed to creating environments that expand imagination, unleash creativity, and maximise the creative potential in every individual and organisation.

Convinced that the world is changed by dreamers and visionaries, Be Motivated serves the purpose of history by maximising the divine potential in every human being.

Sam is also a Frank Team facilitator for our youth programs!

How did you come up with the idea?

In October 2006 I was involved in a horrific accident in Northern Tasmania. I suffered many major injuries including an amputated right arm and a permanently disabled leg. Seeing I’ve been given another chance at life, I’m now making sure others do not take life for granted, and live their life’s purpose.

How long have you been working on it?

I get bored really easily. So when I was in hospital for over 4 months and then in a wheelchair for over 9 months I worked on it continuously throughout this time.

What is the biggest challenge you’ve had to overcome?

I think it was definitely my accident, being told by the doctors that you will never be able to walk again, and also dealing with the loss of your most dominant arm, it was by far my most biggest challenge.

What do you like most about being in business?

Inspiring and empowering people and seeing peoples lives transformed. I love being influential; I recently came back from working in the USA, speaking at schools and at a conference, I loved being Australian and being blessed to be able to travel and talk to people around the world.

What do you like least about being in business?

Paperwork – but it has to be done!

How do you market your product?

Mainly word of mouth; I really do not do a lot of marketing as such… Yes, I have a website I keep updated regularly, but my main form of advertising is people.

What advice do you have for young people out there trying to start a business or community
project?

Do it! You only live one life, Create the life you want to live, don’t wait for it to happen… Make it happen. Be persistent and you will reach your wildest dreams!!!

To find out more about Sam & Be Motivated

Testing Your Business Idea

So you’ve had an idea! You think it would make a really great business and are thinking about starting up. So what are some “tests” you should put that idea through to really work out if it’s “the one” you should pursue with all of your time, energy and a possible short stack of money? Try these:

• Excitement levels

When you think of your idea and turning it into a business, how excited does that thought make you? Starting and running a business takes a lot of heart and soul to make it truly successful, so if the idea doesn’t fill you with fire in your belly in some way then it’s probably not right.

The most successful business people will always tell you that passion for your idea and business is essential. So really ask yourself right now, does this idea wake me up at night, in a good way? Does this idea fill my belly with butterflies when I think of where I can take it? Does this idea lead directly to thoughts of who you could work with on it, all of the possible marketing you could do to sell it and how much everyone is going to want it? If you answered yes to these, then your idea has passed its 1st test!!

• Outsiders

Have you told anyone else about the idea? What do they think of it? Of course, you may be worried about people “stealing” your amazing idea, so put due processes in place to protect yourself (Memorandum of Understandings or confidentiality agreements or get some legal advice if you’re truly worried), but then get out there and ask everyone you know what they think! Get them to pick apart your idea and ask you a million questions. This will help you to see what research still needs to be done, where the holes in the idea are, where there is more potential in the idea and perhaps will show you if the idea is not right in its current form. Of course, “advisers” have been proven wrong before, but no one has built a successful business without the advice of others.

If your idea has withstood this barrage, you are doing really well.

• Anyone done it before? Why not?

If your idea looks like it will be the “first of its kind” or “too good to be true”, ask yourself, why has no one else had this idea or done something with this idea before. Often the reason why no one has done it before is because it is not a really great idea, or its time has not yet come. Do your research in your industry to really find out why no one has done this before. It could be that the idea is so simple that no one has seen it yet, and it is truly brilliant. Or it could be that others have not seen any value or money in the idea. You need to find that answer for yourself too, to pass this test.

• Uniqueness

Every customer you will get, generally, means you are taking them away from someone else! So what is going to make your idea stand out so customers will come to you rather than anyone else? How well do you know your potential competitors, direct and indirect? Do a SWOT not only on your idea, but also on your competitors. You will learn a lot about your idea with this test.

• Start up costs

How much is it going to cost you, and how much will you have to risk to get it started? Can you put together a 6 month budget to see what you’re going to have to put on the line to start it up? How does that amount make you feel?

Perhaps you can get out and sell your idea (product or service) at cost or for free to test your market. Just starting small is a great test for your idea – selling 1 tutoring lesson, 1 new computer mouse, 1 piece of clothing on ebay – what was the experience like, what was the demand like, get your customer to give you feedback, learn, learn and learn more. This will provide a huge wealth of information that will help to direct your next move in testing your idea further. And by the way, if you do this step you have started your business!!!

• The market

Of course a good in depth look at your industry market and the general economic market and geographic location if you are setting up a physical presence can help to test your idea. How are other businesses doing in your area? Are they growing, stable or contracting? Are there other business like yours in the local area? Why and why not? Get out there and look at trends, read industry magazines, talk to people in the industry, go to networking events – really submerge yourself in the market you are thinking about. You will get a sense of the vibe and energy around your area. Good vibes = good idea!

• The numbers

Now depending on the type of entrepreneur you are and why you are starting, the financial numbers can also help to test your idea. For those of you just wanting to get out there, and get started and see how it goes – do just that, just start now. Others want to see that the “numbers” all add up – that is, that there is going to be profit and good profit in this idea. This will mean putting together at least a 1 year budget backed up with your research of the industry, competitors and market information. Get someone on your team who is really good at all of this stuff, and put your idea up against the toughest test, financial!

• Official checks

You know that amazing business name, or product name that you have just come up with? The one that is so perfect for you and your business? Before you get too excited check it through your state business name registry, and even the Australian business name registry to see if anyone else is already using it.

You can then also put it through the IP Australia registry of trademarks and again see if someone has already “got it!” And then of course the URL, is that perfect website you want already taken?!

Check it through a domain name search engine like NameScout .

You will find that when you sit down brainstorming ideas for business names, products and services, you want to have the internet at your finger tips to do your testing as you come up with the ideas. It can save a lot of disappointment and faster elimination of ideas for names you just can’t have.

Keep in mind key words used by potential customers when searching for your product or service and use those keys words in your business name and URL.

There are many ways to test a business idea and these suggestions are based on our experiences here at The FRANK Team and how we test our ideas as we come up with them – and the tests we have learnt the hard way that you should put your ideas through before going ahead with them.
You need to do your own research and then ultimately it’s your decision whether you think you’ve got a winning idea. Expert business advice from others is advisable as well.

And remember, there is no one way or right way when it comes to business. So what is your great idea? How have you tested it so far?

If you want to learn more about the steps to starting up your own business then The Frank Team has the prefect tools for you. Our Break it Down cards make starting up your business easy, fun and totally practical.

Starting up in business as a young person can be lonely and tough at times. Come and meet other young entrepreneurs just like you and share ideas and stories with the Frank Team’s Young entrepreneurs membership program.

What is Mentoring & Coaching?

You have probably heard the words “mentor” and “coach” being used before, in regards to business and not! But what is the difference and how can they help you?

We can often think that we need a mentor or coach to really help us keep on track, get motivated and be powerful in our actions… but truth is sometimes, with just a little more self organisation and direction, we can figure out the path ourselves and get back on track!

So how do you know when you need to sit down and get organised and focused, or when it’s time to get an outsider to help with your business, projects or personal life? Lets explore!

What is a mentor?

A mentor is usually someone who has some knowledge, skills, and experience that they can share with you that is helpful to you and the challenges you are facing in making your ideas real.

They are there to guide you and be a reference, not to tell you what to do or how to do it necessarily; that part is your responsibility!

They can be there to talk to so you can get clear about your goals, and to support you in reaching them.

You get to learn from their experiences and they get to help you achieve your goals.

What is a coach?

A coach doesn’t always have the direct experience or skills that you need, but they can show you how to get what you’re after.

There is often a goal set at the beginning that the coach is then helping you to work towards. The coach helps you with the PROCESS of achieving your goals. They can hold you accountable (make sure you are doing what you say you are going to do) and call on you to take action!

Here is an example of how the two would be different.
Lets say you are have just started a business and want some help with what to do next. A coach would sit down with you and plan out a strategy on how you are going to build your business idea. They may not necessarily have run their own biz but they know all about how you should go breaking down the steps to make it happen, and your relationship will be very much goals and results orientated.

If you were to work with a mentor on your business idea, the relationship would be dictated by you.
The mentor is more likely to have actually run their own biz and so they can share their experiences with you, you can ask for advice, suggestions, contacts and info. Ultimately the reigns are in your hands to move towards your goals, but there is more mutual contribution in this relationship.

These days you can get coached or mentored in so many different areas. There are business coaches, sports coaches, performance coaches, workplace mentors, community mentors… just do an internet search! And all of these services are unique in their own way.

So, how do you get your hands on one?

Mentors and coaches can be people that you already know. Consider asking someone you know and admire to be your mentor if you think they have some skills and knowledge that you are looking to develop. And then set up a time to chat over coffee, and go prepared with some questions.

If you are looking for something more formal like a mentoring or coaching program, here are some good sites you can check out to get started… – for the basics – there is a great UK site.

To find a mentoring program that you can join here in Australia try Youth Mentoring.

For business mentoring you can contact The Frank Team, or your state government’s business organisation.

Is it what you actually need?

If you can see that there is room in your life to be taking bigger steps to reach your goals, but you’re not quite spending enough time and energy on making these happen, either try a good old fashioned to-do list and TAKE ACTION, or harness the skills and power of a mentor or coach. Only you can make it happen.

Six Great Reasons Why You Should Start Your Own Business

We hope you’ve noticed that here at The FRANK Team we’re really into entrepreneurship.

Ever since our founder, Jessica Schebesta (Kiely), started the Frank Team in 2001, we’ve been encouraging other young people to get out there and start their own businesses – and many have.

Here are our top reasons why YOU should start your own business.

Turn your hobby into your job – Get paid to do what you love

Many people have great hobbies that they love doing and are really into – but they don’t have much spare time to spend on their hobbies. Think about what you love to do, and consider whether it would be a viable business idea. Do you enjoy making earrings and necklaces in your spare time? Consider heading to markets and setting up a stall of a weekend. Do you love to take photographs, or paint? Approach retailers to see if they would be interested in purchasing any of your artworks.

Start Own Business to Fit in with Your Needs

Our lives are getting busier and busier. With school or university, part-time work or full-time work, family commitments (and leaving some time for fun of course), it can be hard to fit everything in. So why not start your own business to fit in with the needs of the rest of your life?

Lots of uni students run their own business: Jessica Schbesta’s (Kiely) first business involved organizing tutors for high school students.

Running your own business can also be great if you have a young family or need to work from home for some reason. Warning – the more successful you get, the more time your business will take!

Be Your Own Boss

Some people don’t like to be told what to do, or prefer to do things their own way. Others don’t like working nine to five, and prefer to set their own working hours. If this sounds like you, starting a business could be perfect for you.

It’s up to you when you work and what you do. There’s always going to be some stuff involved that you may not like doing though – like keeping accounting records or learning sales skills. But be warned, starting your own business does take a lot of time (and sacrifice), but YOU will be the one setting the hours and telling yourself what to do!

Can’t Find a Job that suits your interests?

Times are tighter and tougher at the moment, and perhaps that job you thought you would get straight out of uni or school is just not happening. Perhaps starting your own business is the answer.

Or find that you’re looking at all of the available jobs and thinking “If only I could … (e.g. combine my interests of ice hockey and ballet, or graphic design and sports)?” Create a business that suits and combines your interests – you’ll be far more motivated to get out of bed in the morning if you like what you do, instead of settling into a “good job” that you hate.

You’ve had a great idea in the back of your mind for a while now…

Maybe it’s time to do some research, find out if you could turn it into a viable business and go for it! Turn your dreams into your reality and make things happen for yourself! You never know where your business may take you (Paris, London, Rome, Wagga Wagga…). Do you really want to be someone who looks back at your life when you’re seventy, and wishes you’d started your own business now?

You’re Young!

Yep, it is the perfect time to be taking the risk, rolling the dice and giving a business a go for yourself. You don’t have the mortgage or kids tying you down, so give it a go now!

You are also packed with energy (we know you can party all night, and the next night again you will back up!) that will get you through the long hours involved in starting and running your own business.

Plus, you have heaps of ideas that are fresh because you look at the world with new and young eyes – this is where great ideas can come from!

6 great reason to start your own business NOW and TODAY, and you are on the perfect site to provide you with all of the inspiration and know-how you will need to make it happen.

Don’t forget to tell us all about it!!!