Are you considering purchasing a business for sale? Here are three reasons why you should consider working for yourself.
Tax Implications For Business Owners
A lot of the expenses that you incur as running costs can be claimed as tax deductions. Business travel, vehicle, wages, repairs, home office equipment and small value assets are all examples of potential deductions that will reduce the amount of tax that you need to pay. In this instance, of course, you’ll need to have a thorough and accurate filing system of receipts, invoices and other paperwork in order to claim, or have on hand, in case of a future audit by the ATO. Check their website, as there are some ways to reduce this administrative burden such as pooling eligible assets together to claim depreciation as versus individual capital expense claims. Other deductions that will reduce your tax burden may include small business tax offsets, the research and development incentive, capital gains concessions and primary producer concessions.
Buying vs Starting
In many instances there are advantages to buying an established enterprise instead of starting one yourself. Depending on your situation and the type of planning you have undergone, finance wise you may not be able to afford to wait until a new business grows and starts to make revenue. Don’t forget it could be years away until a reasonable profit is achieved, so unless you are set up for this scenario, buying a business may be a better option for you in terms of risk, especially if you already have external financial commitments (such as a mortgage) that you need to uphold. Furthermore, gaining finance for established businesses can also be a smoother process if lenders can have proof of assets, income and business planning when you apply for a loan. Ideally when you purchase an established business, you will also potentially be gaining current clients, employees, suppliers, a lease and the reputation that was built by the previous owner. Therefore, be sure to ascertain which of these you will acquire before committing to a purchase and factor it into the sale price accordingly.
Be Your Own Boss
Perhaps the most aspirational reason many people ultimately choose to become a business owner is the lifestyle that it represents. Sure, in reality there will on average be long hours, sunk costs and limitations upon holidays and downtime from your business, but being your own boss is highly appealing to a lot of people. Besides the autonomy to make decisions for yourself at a strategic level, many business owners enjoy working in their preferred location and creating a working atmosphere that suits their temperament, as well as having the chance to contribute to their local community and ability to reap the financial benefits of their labour. So if you’re thinking of delving into business ownership, start brainstorming what you’re passionate about, perhaps consult a business advisor to get you started, and chat to your friends or family that are currently business owners to hear their experiences.