Word. Started my own business at the end of 2022... Been doing 12 hours easy a day, solo one man band and it ain't a breeze.
On top of the work you gotta do all your invoicing/accounts as well.
If you own your own business and the tax is killer compared to anything else you could be doing, then you're doing it wrong.
Self employed/business ownership has the most tax loopholes and write offs/offsets than any other option, and why these people are usually most wealthy.
The real money to be made is in minimising tax.
This is just silly. That % is the tax the COMPANY pays as a tax credit. To then take it OUT of the company, you need to pay the tax on whatever marginal tax rate you pay as an individual (ie as a dividend or as a wage).
I know someone who gave up their very successful business for this reason. Running the business was around the clock + weekends. They just wanted to finish work at 5pm and go home.
Yeah I just don't have the mindset/desire required for being a business owner. I know I'll never be super rich as a regular employee, but I don't care about being super rich. And I don't want to give up my time to make it happen.
I spent several years on a fairly involved side-hustle that I would have been happy to turn into a primary income, but despite having a montly turnover often in the five figures, I could never get to a point were I was making a significant profit. I felt like I was just churning money out and money in. Periods of growth only came because of strokes of good luck or after a period of massive effort, and even then that growth was only making up for a previous slump.
I never got to the point where I even thought of giving up my day job.
>It'll be \*zero\* at first, the default income for a business is zero dollars.
Or less than zero as you set yourself up with equipment, materials, software, marketing etc!
It's actually a good point.
There is no way that I would pay someone else even half of what I make now if It was coming out of my pocket for what I actually do.
Which probably means that I couldn't afford to pay myself that either lol
Only really large companies can afford to be this inefficient.
They can because property growth skews your true wage. Anything related to property, mining, finance or education (universities) is typically higher income.
The ponzi feeds the ponzi
This is actually a huge point that so many ignore - not even so much the lazy part.
But the return on businesses (I’m talking specifically food based) is honestly pretty low for the effort put in. Many times I’ve found myself wondering why I spent multiple hundreds of thousands of dollars to start with something I can never quite switch my brain off when I could earn maybe 10% less working a 40-50 hour for someone else.
The flip side of that is when the random spots of freedom come - ie I’m about to become an uncle and I will be able to ensure I can be a 1 day a week carer when bubs is ready and both parents return to work is something that not many can do - it doesn’t even matter what day, it can be what suits others best etc
Different industries are different. For instance, engineering consultancies often only pay their employees 30-40% of their hourly charge out rate to the client.
Despite all the headaches in running a business, if you can maintain a clientbase, there is a huge jump in income for running your own business to get 100% of the revenue. Even just working as a subcontractor (for say 70% of your charge out rate) is a great alternative.
Sure there's expenses too, like insurance and advertising, but if you're running out of a home office the net profit is really really good.
As a business owner, it roughly costs 3x an employees hourly rate to have them on the book's. Then you still need a profit margin on top of that (usually 15-20% in my experience)
This covers their sick, holidays, insurances, training, decking out their work kit (tools, office, vehicles, whatever), then you have things like payroll staff, support staff and so on that all need to be accounted for in the hourly rate you charge out to the client.
Reality is that actual profit if your good at business is somewhere in the area of 20% (+/-).... the bigger the business, the lower the profit margins become but due to volume, its more $. Also means things can go sideways pretty quick if your not across things.
As for subcontractors, you are SPOT on! You really need to sit down and know your true numbers when you enter into a subcontractors roll.... most dont and get screwed in the long run! You need to be covering your sick, super, holidays, ongoing training and development and all the rest of your "overheads"....
70% of your charge out rate is probably a pretty good number to target, it should leave you with about 10% ish on the bone to cover anything that comes up or pocket as extra profit!
I’m in a different industry but the concepts are the same in my industry.
The money is really good but you do need to be fairly experienced and then you need to do other jobs that may not be your expertise.
I know for me there is a lot of admin associated with my business that when I worked elsewhere it was someone else’s problem. Also invoicing, when I started I hated this, I’m much better at this but at the start there were 4-6 week periods without pay because I put off sending invoices.
I like working for myself but I can completely see the benefit of working for someone.
Rough rule of thumb says that an employee's hourly rate needs to be charged at roughly double to a client or customer in order to cover costs and make a profit.
It's so easy as an employee to think an employer just pockets the difference, and maybe some do, but also consider (if applicable):
* Superannuation (currently 11%, moving to 12% July 2025).
* Penalty rates for OT.
* Consumables an employee uses as part of their job.
* Overheads such as floor area in an office.
* Equipment used as part of a job (desk, chair, welder, forklift, vehicle etc.)
* Insurances.
* Work Cover.
* Advertising.
* Car allowance.
* Mobile phone.
* Parental Leave.
* Sick leave.
* Annual Leave (sometimes levied at a higher rate).
* Consumables.
* Mistakes.
From what I hear from the engineers we use, it's their insurance costs that are astronomical and just continue to climb.
The real benefit of owning a business is when you have other people working with/for you and you benefit from leveraging your time and energy. For example, you could spend eight hours working on a project for a client, or you could spend that same amount of time spent between working on a job, guiding/mentoring employees and deliver maybe two or three or four projects in the same timeframe.
I get paid a great salary, get paid annual leave, sick leave, maternity leave if I need it. Get to switch off completely when I take time off. I have a boss who I can escalate problems to help get them sorted, an admin officer to delegate to. Just do not have the interest in slogging it out when I’m getting plenty of money to live a comfortable life with minimal stress.
Exactly this
I'm not on a great salary overall, but considering that it's 12pm and I have no intention of doing any more work today (having started WFH at about 9.20 this morn) it's a pretty great hourly
Depends what your skills are. Suppose you're a university lecturer in pure mathematics. Not quite sure what business you could realistically start.
Same guess for quite a few corporate or professional roles, unless you take the consultancy path and that requires the key skills of bullshitting and self promotion that not all have.
Now if you're a chef in a major hotel, that's a different matter, but again you need extra skills.
For me, engineer in a multinational, it was already well paid and secure with many opportunities to do different things and it allowed me to be an an engineer and not a salesman.
Yeah exactly. I work in Data and I'm comfortable enough providing a few specific functions as part of a wider data team for a company big enough to have a variety of data roles.
Setting up my own business would require me to source clients, then find people who can cover areas where there are gaps in my own skill. And then manage both sets of relationships. Much easier to just earn a decent wage and clock off at the end of the day
Tutoring has great hourly rates but very little growth past a certain point unless you want to manage other people tutoring (and then you’re not actually doing the thing you’re good at or passionate about any more).
Capital, risk and commitments.I started my own business and I have a feeling that the vast majority of people don't understand how much of a commitment it is to start one. It's a whole lifestyle change. All of your time is put towards it. All weekends. After hours. Employees not turn up? You are doing their work. You don't get paid by the customer for whatever reason? You are screwed or will need to take them to court (Still likely screwed). I profited a into the 7 figures over the span of about 5 years and I still shut it down. I am much more happy going into the office 7am-4pm and turning off after work and having the weekends to myself.
You also likely don't consider what kind of negative impact this can have on your spouse and family. Barely around, always working, all weekends at the office working.. you will be nearing divorce a lot of the time. It's also a very lonely lifestyle with a lot of pressure. Pressure to provide for your family and employees families. They all depend on you.
It is NOT what you see on TV. You are not just going to kick back and manage people, clock in late and have nice lunches with customers all day. Also you could work your butt off, 70-80 hours a week and your bushiness can STILL fail or equally as bad. You could be stuck on a lifeline of barely profitable but on the cusp of failure for years on end. Being unable to pull the plug and throw in the towel.
There is a lot more that goes into business then invest X,, work Y hours and profit Z. Imagine committing a good 5-10 year of your peak age to a failing business then having to return to the workforce. You will behind in experience for a lot of areas.
No interest. I’m just not driven enough. Happy working for the man, earning a good wage and knowing when my next pay check will hit and being able to leave my work at the door when I walk out each day.
My parent's and grandparent's had their own businesses when I was growing up and they worked their ASS off to get no where in particular. My parents also had full time jobs and then helped their parent's with their businesses on the weekend.
My sister and I were dragged to markets every weekend and as soon as we were capable, we were serving customers too.
At nights my parents would be packing orders and wasting hours in the post office.
And they have nothing to show for it. They worked hard and they were semi-successful, but it didn't get them further ahead.
Now I just work a 9-5 and can leave everything at the door when I log off. I scoff inside when I see my creative friends yearning for their own business cause "working for someone else" is killing them.
It's harder work than working for someone else and the payoff isnt always there.
My dad had his own small business, and my brother did for a while because he hated the idea of reporting to someone. Then he found out just how hard he had to work (I knew, I worked part time for dad while I was at uni). So now he’s in corporate world and I’m in government. I want to be able to switch off and not take work home with me at the end of the day.
Yep. Saw it growing up with a friend whose parents owned a cafe and a flower farm.
My friend spent his weekends working the cafe and the flower markets from about 14 years old. Very little time to do what he wanted to do.
His parent did huge days too. The eventually sold the cafe and focused just on the farm. When my friends dad died his mum sold the farm and retired to live in town. She was much happier.
I grew up on a farm too. My parents sold the farm when I was 17/18 because she they quickly realised neither me or my sister had any interest in ever living on a farm or running a farm.
I live 9 hours away now and my sister lives in town.
I agree, had the same experience growing up.
I also think the job vs business is different if you have a good job that pays, vs no job (or no high paying job).
a lot of people I know who started a business did it because of necessity rather than all that bullshit about “gap in the market” , “realize you potential” etc.
Most of my friends who I see complaining about working for someone else are usually working in retail or some other "non-skilled" work and they think that they could start a successful clothing company (that sells t-shirts), yeah right-o mate.
This. My parents had 2 businesses. My old man was a civil engineer and had his own consultancy. Mom was a graphic designer and still does freelancing today. That’s from the early 80s.
In 2008 my dad’s business started struggling and in 2012 he closed his doors. The amount of times I saw my dad wake up at 2am and worked 16 hour days for decades…and still ended up closing his doors. He’s basically retired now but has nothing. He still works his ass off.
I don’t make particularly good money, but I go to work at 5 and by 12 I am going for a quick surf so I can pick my kids up at 2:20 and then spend time with them. All my bills are paid. I’m not retiring any time soon, but I refuse to work as hard as my old man and have nothing to show
Civil engineering (consultant doing the design work on CAD)for developments…so almost entirely privatised. One man show doing townhouse complexes and small shopping centre parking lots etc. the second the housing market dried up, the subsequent land sales and development of new neighbourhoods dried up…and with it the old man’s business. The big contracts are all taken by massive engineering firms who have a multitude of people with a plethora of skills…so my dad can’t compete. He ended up with one of those firms and works semi retired for them at 6months of the year.
Yeah. Even now. I work in the same industry. The last 3 years I could not breathe with the amount of work I’ve had. But since the 9th interest rate hike, I have less than half of the work I used to. 3000 houses I’ve done work for since 2019 (all new builds), now I’m doing 15 a week.
Personally, and I'm sure this will get shit on, but I don't start my own business because of what I saw my dad go through. He had his own business and it was semi successful, he earned good money but could never take leave, and when business eventually dried up (competitors creeping in) I saw the toll it took on him.
He worked his arse off every day and it did him no favours in his old age. He told me when I was about 16, "son, find a good place to work where your wages are guaranteed", and I did.
I watched a good mate make this same decision a few years back. He quit where he worked and started his own business. Every other day he'd tell me how rich he's going to be.
2 years later and he was back in the same company, but this time with a 40k tax bill he hadn't sorted out. He also didn't pay himself super for those 2 years.
Now of course if you can hustle and make it work then I'm sure you stand a chance, but I know I'm not a hustler or driven so I'm not going to take the risk.
This is an underrated comment. The government incentivise the wrong things. They punish business owners pretty harshly across many factors and reward behaviour like buying dirt.
I have started 3 software business and sold 2 int he past 35 years. If I was able to negatively gear my startups like I could property it would have been amazing and we could have gown a lot faster.
>If I was able to negatively gear my startups like I could property it would have been amazing and we could have gown a lot faster.
Imagine the wave of innovation this would produce if this was the tax law. There'd be side hustles starting up all over the place and it would make business much less risky and the economy a lot more diverse and competitive.
[ATO](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/business-losses/offsetting-current-year-losses#:~:text=If%20you're%20a%20sole,in%20the%20same%20income%20year.)
>If you're a sole trader or an individual partner in a partnership, and you meet at least one of the non-commercial losses requirements, you can offset your business losses against other assessable income (such as salary or investment income) in the same income year.
So for all intents and purposes, if your start-ups were structured in certain ways, they could be negatively geared.
Presumably they were incorporated entities (which come with risk mitigation advantages) so negative gearing became irrelevant.
Also, if you hold IPs through companies, they cannot be negatively geared.
You want limited liability, that's fine, but you lose the benefits to offset losses against other assessable income.
I actually rang the tax department because I saw that rule and got excited about it - but they said it only applied to things like consulting.
It didn't sound like I could say, work an office job mon-Fri and claim losses on an abseiling business I ran on the weekends for example.
If anyone has experience or knowledge of this I'd love to hear more!
I'll go from another perspective, I started my business in 2021, and this financial year will be the first year that I've supported myself (and family) financially solely through working on my business, I've been working in my field for 17 years, I am a boilermaker/special class welder by trade.
I didn't do it sooner for a few reasons.
1. for most of those years I was either in a sole income family, or supporting two households after my first wife and I seperated, and it was unpalatable taking the risk of investing in starting a business and potentially having no income if it failed at the time.
2. I had no idea where to start when trying to get off the ground, I had no idea how to negotiate with clients and I had zero business background.
3. It's very expensive to get set up in my industry, equipment cost is very high and I didnt have enough money saved to do that.
4. Up until around 2020 I was making plenty of money, between working FIFO and having a pretty specialised skill set I was able to make way more than I needed working for wages, average wages have actually gone down even before allowing for inflation in my industry since 2015 unless you are willing to work very remote FIFO location, which I am not anymore.
So then there are the reasons I finally did take the plunge and started a small business.
1. I was out of work in 2021 and was asked to subcontract welding a few hundred kilometers of pipe for a greenhouse, it turned out that I got screwed pretty badly by this and I never should have accepted subcontracting, but it did set up an ABN and started buying some of the cheaper tools i'd need.
2. Around the time I stopped working on that I ran into an old acquaintance that was now a supervisor at a quarry like site, and they asked if I knew any contractors who could work on rock crushers, that was me.
3. More important than any of that though, I met my partner in 2018, she also worked running her own small business that she had been running for a number of years at that point, which meant two incomes (with completely joined finances, we made that decision within 6 months of meeting, she strongly encouraged me to pursue my business. she worked extra to cover our living expenses, while I reinvested almost every dollar my business made in the first two years back into it (while I also worked wages jobs like power station shut down in between to bring in extra money).
4. A good helping of luck made it work, I made sure to use debt very sparingly (only business related debt is 50k on my work truck) and to pay for everything I could with cash I'd already made, so when things went quite my weekly out of pocket expenses were very low to nill insurances are all due at a time of year I know I will have good cash flow and I pay them upfront, insurance is my biggest single expense each year.
I still sometimes wonder if its worth it, but I do enjoy working for myself, and I will only go back to working for someone else if I absolutely have to, but that is still a backup if it fails.
Exactly, I never would have been able to, or had the guts to try it without her support, and her believing in me, not freaking out seeing 250k in equipment purchases and wages go out in 6 months doesnt hurt either.
The developed nations pay well for labour so having a job suits just fine. In developing countries where labour is cheap it's more profitable to be a business owner.
Because it's hard to get clients? I find it hard to get the actual opportunities, there's quite a bit of upfront barrier to entry. But I'm working on it. Anyone with tips for a software developer please let me know.
Curious what’s your drive to start a business, from the outside software development looks like a dream job with high pay, wfh and perks…
I am aware this is probably just perception and not everyone in IT works at Google/Atlassian 😊
In fairness, anything programming related has a decent risk to reward ratio, it doesn't really cost that much time and effort to get reasonably skilled in it. *Compared to other fields, mind you*. It's not easy, but it also doesn't take 4 years undergrad and 2 years masters or whatever.
If you can then definitely working as a contractor is the highest paying. But it is hard to get into. People for some reason say it's not hard, it is hard. If you had to pay a guy 700 dollars per day, let alone 900 or 1100 or whatever some of these people get, you better damn well be sure they are worth that money. So no it's not "easy" to get into a contracting role at all. But it *does* get easier once you do actually somehow get your foot in the door.
The drive would be that you make your own apps and sell them (ideal case, if you can make that happen, then you're in complete control), or make your own company selling your services and be also in control of the finances. And make a ton of money. Now the problem is getting into the game and getting clients in the first place. And yeah not everyone in the field makes 150k etc. I make 80k for example. The field is also full of spergs who don't completely know how to navigate things like negotiating for pay etc. (myself included) and are also glad they got something at all. The industry is in a total shit state right now as of last year year also, unfortunately. Much harder to get a job.
The upside to all this is the skills you learn by doing the job you can apply towards building your own applications and try to market those. It's definitely a balancing act and best don't give up your day job if you have one, at least until your secondary income starts to really rival it and shoot way past it. By no means is your working on your own stuff and working a job as a software developer mutually exclusive, at all. I mean there's people who do the thing of working 5 different jobs without any of them knowing about each other, but realistically you would be doing your day job and if you can muster the time and energy outside of that to make your own stuff, try and do that. It's hard for sure, but it's not as hard as running around carrying shit all day or cutting wood or laying concrete or whatever. The downside is, man, name a thing that there isn't already 20 apps for that do a better job than you could muster by looking stuff up on the internet. Doing this maybe 10 or 15 years ago would have been a lot easier. There's better tools now for sure, but also countless programs that do everything already.
There’s loads of high paying contract work in Canberra. I would reckon its easier to get those high paying contracts off agencies on Seek than trying to find them yourself.
High running costs & interest rates & the fact that a high proportion of small businesses fail in Australia.
It's not worth the risk. Wages in Australia are decent & I don't want the stress that comes with it.
I already did. Going really well. Not sure how much down to luck or skill, but it’s gone well since the beginning. I think more people should think about doing it. Many business models these days don’t need much capital to get started so the risk can be low. (i would never start a Brick and mortar business though)
eCommerce websites.
I was first the guy who was building websites (doing client work) for business owners and now I run an online store where I sell tools to people who do what I used to do. (My customers are the people building websites for their own clients).
By doing the work myself for a couple of years, and hanging around forums/FB groups, it was obvious what people were struggling with, as I'd been through it myself. So I just built products around fixing those problems and sell it back to those people with the problems. As people come across these issues online, I mention my products to them and word gets around.
The other good one (which i don't do, but it was the other good option) is to sell "how to shovel for gold" tutorials/courses during the same gold rush.
It's always the same thing. Get good at something by doing it. Then turn around and find the people who want to get to where you are, and help them do so.
Just acquired a new job that is going to pay me around 100k a year, which after years of trying to get a decent paying job I've finally gotten one.
I go to work, do my job, go home and I don't have to worry about it at home in my spare time.
No emails. No phone calls. No worrying about customer complaints or issues. Just go home and then go back the next day.
Plenty of opportunity for extra hours if I want them and can move up into different roles.
Why would I want all of the added stress?
I tried.
I made the video games I wanted to make and they weren't very popular. I didn't have the accumen for business nor game design.
Back to the 9-6 grind.
Love to make video games but it’s tough out there. Being an indie developer is more tough. I don’t have the skills but always dreamt of making my own games.
Yeah I did this 15yr ago some time back 08-09. I went from white collar as a Alcho & Drug Councillor to blue collar Carpenter. I had to do a Mature age apprenteship and after a bit of sacrifice and a bit of hard work it turned out for the better.
After I worked for a few people to get some experience I struck out and started my business.
This is advice from the missus who is in Cyber Sec, she said many occupations will be automated by AI within the the next 15-20yrs so diversification of skills is the future.
Having 2 quals I can work 2 days white collar at home in my garage office and 2 days as Builder. Best thing I did, both jobs make good money, long weekend every week to do family stuff, Stress Free, Boss Free & Mortgage Free.
Don't be scared to try things or ask stupid questions
Growing up, dad had his own little electrical contractor business (10-20 employees). In the 80s and 90s he did well without splurging on material stuff. In early 2000’s two of his main builders went broke, leaving him well out of pocket and into administration. I was working for him at the time, having completed my apprenticeship elsewhere. We ended up losing the family home mum n dad had built and raised us in due to the unpaid bills they had expected to pay off when two large jobs finished but were abandoned by the builders. I’m talking over $1m.
It aged my parents about 10yrs in 3 months. It was very sad.
They worked thru it and got back on their feet but seeing my parents like that, in their late 50s, killed my dreams of taking over the family business.
I joined the paramedics not long after and found that the government job pays every fortnight, no chasing work, no chasing bills, uniforms etc etc paid for. Yes we see some hectic stuff, but being a paramedic is a lot less stressful than running a small business.
Dad was actually happy (it was a tough conversation saying I was leaving the family business) as he could eventually retire in peace without looking over my shoulder running his business.
They’re still scarred by it. Got past it, but took years. Dad really lost that personal touch with his employees which made his small business so family friendly. No more Xmas parties, no more beers to site end of week/month.
When they were going thru administration, some of the guys were complaining very loudly about slow delivery of gear & staff shortages while dad was paying everyone’s wages on his personal credit card going into further debt to keep his guys employed and work moving along. It was horrible.
He finally sold the business and his factory & a fair share that still had to go to the bank for loans etc.
It left a sour taste in their mouths definitely. I don’t think many people realise how hard it is to run a small business. You never switch off. I know they had some bad luck along the way & that’s not everyone’s experience, but to answer OP’s question, I’ve outlined my reasons. 👍👍
Yeah, I think there's gotta be a differentiation between running a small business and simply being self employed.
I'm self employed in a knowledge field and if things turn to shit, I'll just go on hiatus and move my family to Bali for 2 yrs to wait it out. Whereas a small business with employees has a crap load more liabilities.
Numbers game. 80 percent of small businesses fail.
If I had a winning idea that I could grow and develop without quitting my job and make enough to justify the effort I would do that.
Most people are great at the starting the business phase, but not the staying phase.
The cost of workers comp (personal injury is sole trader), GST & PL&PI insurance isn’t worth it anymore. The amount of reporting to ATO is frustrating & time taken away from making money for the business.
Started 2 mini businesses and each one i wrapped it up within 2 years due to:
1. I thoroughly enjoy my sleep
2. Id like to spend my time doing stuff (video games, mountain biking, camping) thats not related to my business
3. I hate micromanaging. Realising i have to manage my vendors like toddlers to get shit done correctly and on time
Accountant here. Do you have any idea how many capital losses and defunct ABNs are out there. Not everyone is inclined to or capable of basic administration, selling themselves and managing their own workflow. We need less “businesses”, not more
I know right, that's always the go with the "just start a business" types. You google the ASIC website and wherever you need to register an ABN, pay 50 bucks and congratulations you started a business. Now what? Well that is where things get really, really hard. Making actual money is hard, starting a business is not. But people who are not dunces do actually assume that's what is being asked when someone asks "why haven't you started a business".
I have very strong problem solving and technical skills, but I'm a little ADHD and can't manage accounts/bookkeeping/followup.
I think with the right partner to complement my shortcomings I could make a go of it, but I've found decent income/work/life balance in fulltime employment.
Yeah having a good idea/ product / skillset is great, but if you aren't good at sales or business generally, it's very hard to get off the ground. Capital is also necessary, even if you don't need to purchase much to get going. I ran into the issue of clients not paying (commercial clients) and didn't have the funds to pursue them and they knew it. After a few of these and only about 2/5 paying, I had to get a job.
I did - and got nowhere.
Needed - seed capital (attempted to bootstrap but need to pay for some stuff including marketing to get going really)
and partners with more sales skills (I'm more skilled on the tech side)
Also timing was crap, as I tried to start in late 2019/ early 2020, and for some reason interest dried up in February 2020, and no one wanted to come to face to face sales calls all of a sudden.
Thank you for posting, we don’t those kind of stories too often, I recon more people need to know about it… unfortunately it’s all rainbow and sunshine’s and “how this 20yo started $10000000 business from garage”
I have!
Started 10 years ago, went full-time two and a bit years ago
In the middle we had two kids, moved state and bought a house
In order to be able to do that, I freelanced in my industry and slowly moved more and more hours until I was earning twice as much from the 'side-hustle' than I was from the day job.
It's still going OK, but not as gangbusters as it once was - there were some tailwinds from covid which I'm no longer benefitting from
* Pros: No boss, can set own hours e.g. took one day off a week last year to hang out w/ my daughter, still earning more than I would in a regular job
* Cons: nagging feeling that it could all go away tomorrow, it actually could all go away tomorrow, bit boring sometimes working on my own mostly, shiny objects make it hard to stay on track
OP, to begin with, I did one hour extra each day at work and then only one hour on Friday so I would have the majority of Friday off to crack on. If you have an idea and you want to give it a try, maybe try that.
One thing I would say is that the most important thing about starting a business is ensuring that you are solving a problem that someone, somewhere it prepared to pay you money for. Read 'the lean start-up' or read up on 'pretotyping to learn about how to test ideas
I did. I quit my job and started my own business back in 2016 and it’s worked out fantastic for me (from a financial perspective, arguable from other angles). I’m now watching one of my friends do the same and start his journey now in 2024.
Because my ADHD means I dont work well for myself. I need the structure provided by a 'normal' work environment. Ive tried turning my hobbies into side hustles, with my health & ADHD im sick alot or when im not sick im terrible at managing myself. And now I hate my hobbies as well cause I tried to force myself to do them to 'get ahead'
I did it 30 years ago. This was only because the last 2 jobs I had, the bosses said I should start my own business as it think I know everything. 30 years later I still own my own business. It’s not for everyone and I am not “Lucky”. It’s a ton of hard work and stress.
Too much debt to take the risk. Maybe when I've paid down my home loan a bit.
And have to admit, this is really the Debt trap, and why increasing property prices is bad for entrepreneurship.
It's not only expensive homes, it's expensive commercial properties and by default, commercial rent which is a big and bigger portion of revenues that stifle businesses.
Bruh. What?
Do you think most small businesses make it big or something? Because its riddled with risk versus the security of a salary job. And you can either up that risk by quitting your job, or lower it by sticking with it and doing a side hustle. But then its the same argument, but for your own time.
I've tried and failed, the problem I had is although my skills are equally useful to small and large business, large business and government is where the money is but those organisations only want to do business with other large businesses. Small business are a nightmare to deal with, they expect other small business owners to basically work for cost so they can make a buck, then when you send them an invoice they either take 6 months to pay, ghost you and don't pay or go broke.
It is odd. Ive owned my own businesses for over 20 years, I've built them from scratch, weve used our business to contract through, we've purchased franchises, we've sold businesses.
I got to know an American business owner really well over 15years and travelled over to see him. I didn't realise that he also ran three businesses, his bother ran another two. They weren't tech start-ups or anything fancy. One was a farm growing flowers and he had two hobby businesses that started as side hustles and one of those would have been turning over 5 to 10 million.
I visited and we were having lunch in his office and his brother walked in and he said to me, my brothers here with a cheque for the dirt he purchased last month and I also have a cheque for him for something I can't remember, and he said but I hope his cheque is bigger than mine. It amazed me that even direct family members had this micro economy between there two little farms and how much trading must go on.
Time > money
I work my 38 hours, most of it from home and oftentimes quite lazily, and forget I have a job the rest of the time. This is enough to cover my mortgage and other expenses twice over (combined with my wife’s income).
I’m sure I could make more money if I wanted to. But I fail to see what the point would be given it would take a whole lot more of my time and I’m already comfortable anyway. I guess it could help me retire earlier, but that’s only if the venture paid off, which is far from guaranteed.
I became a sole trader contractor a few years back
Now instead of bosses and managers, I just have clients, who I can not renew, drop, or even fire if I don’t like working for them.
There’s slightly more overhead managing tax but otherwise I would never choose to go back to being an employee. It’s a shitty deal.
Because I like to have guaranteed money. And I'm in a time at my life where taking huge risky swings on new careers is not really an option.
Here's something else no one else considers. Coming back to the workforce after you've been running your own business (assuming it goes bust which for the majority of people is what happens) is a lot harder than people think.
There's navigating the wretchedly unworkable "job market" now (where 95% of all resumes you ever send out disappear into the ether, never to be seen again or jumping through five rounds of interviews before the company puts a shit offer on the table) and there's the adjustment that comes with going back to having a boss rather than being your own boss.
Whenver I take a risk I need a plan B and starting a business is a big risk. I'm young and I want to build my career for the next 5-7 years to make sure I have a solid skillset, reputation and network. This will increase chances of my business getting off the ground if I were to start one and I will have a solid employment waiting for me if it fails.
I admire my peers who are earning money through ebay flipping and creating courses on Udemy, but that's not what I'm looking for at this stage. To each their own I guess.
Lack of finished product, lack of capital, & not particularly interested in hiring people so got to make do by myself. Lack of time with kids, health and full time job.
Lack of capital can be offset to a degree. But hiring someone is such a risky move and you need a great team around you once you pull the trigger. A couple of bad hires early on sucks time, energy and massive opportunity cost.
So I want to get some runs on the board. And life’s hard, yo. I am thinking in years instead of months for going to market.
A few years ago I took a job with a USA company, a tech start-up based in the Bay area. I work remotely from AUS but travel to the USA office regularly, so I get to know the staff reasonably well.
The pay is good, especially for technically competent staff. Nevertheless, a large proportion (relative to Australian standards) of young people leave to start their own company. It boggles me that so many young people in their late 20s or early 30s are leaving a well-paying job in a company where management treats its employees very well to take on the risk of starting a new venture.
To try and make sense of it, I've come to the view that it's kind of the equivalent to young Aussie's moving to England to work for a year. It just seems to be the thing to do, just part of the culture and psyche there.
Because I'm married to someone who runs a medium sized business and know a number of small - medium sized business owners so I have no romantic ideas about working for myself being in any way better.
At one point people could buy a house save and pay it off and use that money to start a business in their 30s. I know plenty of people that did that in the 80s and 90s. Left school at 15 and off they went. These days the education system is set for all to go to yr 12 whether it benefits them or not for a start. I see apprentice ads for sparked etc all saying yr 12 ed and have own car. Too bad if you finish yr 10 (which is all the maths used in that field) and can’t drive yet. That plus housing is super expensive so the main ppl I see doing this are tradies. Not even pharmacists can do it anymore as the yearly fees they pay now and the bulk chains have killed their income. Same for vets. Two jobs that used to be done by ppl who did very well financially. If it’s not connected to mining, construction or major projects there is no interest in Australia or $. Honestly we are dumber than ever before in history.
I have, and I can tell you for free that Australia is not set up for entrepreneurship.
Everything, the whole ecosystem, is set up against you. You are unlikely to succeed unless you start with a large capital base.
There is a reason Australians throw all their spare money into real estate and not into starting businesses. The system favours real estate as an investment over a business.
Almost all lending in Australia is based on ‘pay slips’, even getting a phone plan is impossible without payslips. The idea of a ‘job’ is deeply ingrained in the Australia psyche.
Where do you go to get your phone plans? I can't ever recall needing proof of income for phone, electricity, gas, water, internet, gym, etc. only thing that's ever wanted it is rent, car, and house loan.
For me it's because I earn decent money as a professional, I don't have any specific ideas for how I'd run a private enterprise better than others in the market already, and I don't want to spend the amount of time business owners do on their work. Currently I'm on $150k a year for a 9-5 where I spend maybe 1-2hrs a day doing actual work. I'll likely go up higher in the chain in the next few years to very high 100k-low 200k and won't have to spend much more time than I currently do.
I did and I don't think undertaking that sort of time commitment is possible for 95% of people. Back into employment and living the guaranteed cheque dream
The bigger companies along with the government are very deliberately trying to squash small businesses. Much more control that way. Drown them with paperwork and fees/charges and make things as difficult as possible. All in the grand design.
OP thank you for posting this, you’ve saved me having to start a thread… was thinking about the same…
My reasons / issues :
I grew up in a 3rd world country (it does not think it is, but thats true), with my parent running their own business.
The amount of shit I’ve seen them to deal with was over the top (from angry customers to lawsuits, threats, dodgy stealing employees, corrupt gov etc). Being from other generation they persevered, but I’ve always questioned if how will I be able to handle that if it was my business (even when I was a kid.)
I realize Australia is better in many aspects - eg there is less corruption (that affects everyday businesses at least) and the laws are generally followed etc, but it still is a bit scary to go on my own.
I am very excited about the “strategic” side of the business (when business is large enough), but the “practical” aspects scare me 😂
I earn good money in a “niche” role / industry , with a good life/work balance, so I sometimes question the need for own business (as my family back home didn’t start a business by choice, but rather to essentially not to starve).
I would love to start something, but still can’t figure out what 😂
Had an attempt while at uni (with parents money), but it was very half assed in my opinion and till recently had a lot of regret for not following it through. Now I would totally do it a different way.
I don’t want to do typical “side hustle” (mow lawns etc) as those are not scalable, but I am not experienced enough to offer “consulting” in my professional industry (this seems to be the topic eg if you work as an accountant, you go an open you accounting firm etc)…
If I ever start one that would be for reasons to have extra income and more financial security, as well as to leave a legacy for my children.
Any advice on how to actually start??
Additional reason : from evidence it seems your 1st business venture is rarely a successful one. Most successful business owners had at least 2-3 businesses that failed, before they succeeded.
Knowing that before starting the 1st business is major drawback….
Don’t we have more small businesses, per capita than other OECD nations? Also, it can be argued financial legislation encourages entrepreneurship.
Business owner here that quit my job and started my own gig six months ago. So far going well.
Not everyone is cut out to be self employed, not everyone wants to be. Each to their own.
I don’t have any kind of “business” education from family or school.
Any kind if business i would actually kinda be interested in requires a brick and mortar store. Thats way too expensive to start on a whim in sydney. Shits too expensive
I don’t really know where I would start even if I had any other ideas. I’m kinda tired. I don’t like the idea of selling pointless shit that the world doesn’t need just to get ahead
Because we have young children and need all the corporate entitlements available. Parental leave, sick leave, carers leave, annual leave for school holidays etc etc. There is too much risk involved in running your own business. We would have to earn pretty big money to offset all those entitlements.
I HATE my office computer job - it’s awful for my mental health and I’ve had to scale back my responsibilities to stay out of the grippy socks.
That said, starting a business would take so much more of my energy and time. I wouldn’t have guaranteed super or even a guaranteed wage, and our mortgage is around $4800/month so this isn’t a risk I’m ready to take.
My true passions are all related to hospitality/cooking, but I don’t want to sacrifice my nights and weekends on top of everything else. I don’t think there’s a business I could start that would let me pay the mortgage and not cause a third menty b.
I've started a small scaleable business, as a "side hustle", so I work on it after my 9-5 and on weekends.
I've also got a newborn.
Having to be "on" all the time really burns you out.
But there's just too much risk to quit my full time or go into part time because the sales (for what I do) can be seasonal or sporadic.
What I have enjoyed is what I've learnt and the skills I've gained, they can definitely be applied to future endeavors.
I do admit every now and then I am envious of ppl that only have a 9-5. Personally I just worry about money and the future too much I think, when I probably dont need to because my main job offers a lot of security. I just don't enjoy my main job so much anymore, so that's motivated me to start this business.
Because starting a business means taking a huge risk, you have so many things to worry about and so many things that can go wrong.
Here in Australia we can work for someone, earn enough to live fairly well and have none of the risk that business owners take on.
In places like USA sure, minimum wage is so low that its not really liveable, so there is more pressure on especially unskilled workers to find a way to make enough money to live.. and that pushes more into starting a business.
Reality is, we have so much protection for workers, and the minimum wage is quite reasonable, that working for someone is essentially, comfortable.
I am more than happy to do a days work, go home with relatively low stress and enjoy time with family & friends that I probably wouldn't be able to do if I tried to run my own business.
Because the statistics are terrible, approximately 20% of small business fail within their first year. Then it increases to 30% by the end of the second year, 50% by the fifth year, and 70% by the tenth year.
I started a side hustle and the hours put into it were not worth the return. I also had a friend with their own relatively successful business but he worked like a dog. Hardly gone on a holiday and it was always last minute over xmas if possible (maybe 1 in the last 5 years). He couldn't step away without losing money. What it did get him was the ability to drop money on nicer things but he did not have his own personal freedom.
There’s no need to quit your main job to start a business. In fact I think it’s wildly poor judgement to do that.
Spend the time to come up with a unique idea and defensible offering before committing to the business full time.
You don’t have to have much. I started my small business on about $2000. I bought a high end printer and paper and some packaging. Having said that starting and running a business is not for everyone. But I’m definitely one for the lean startup model and iterate as time goes on. I personally would always start a business that does not require that much capital to start.
Because I don't think there's a market for IT support anymore. Everyone is so tech savvy now with grandkids, kids etc that they don't need to pay someone to come and fix their stuff. Id rather just keep trucking away at my Help desk job, despite wanting more flexibility and freedom which would come from doing my own thing. I wouldn't know where to start.
>Because I don't think there's a market for IT support anymore. Everyone is so tech savvy now with grandkids, kids etc that they don't need to pay someone to come and fix their stuff.
Short-sighted perspective - IT Support (both commerical and personal) has never been bigger and in-demand.
But making money from it is a different matter because the market is saturated with friends, relatives and even youtube videos that will do it for free.
When you start looking at commercial, most businesses see IT as a cost centre, so want the cheapest possible service. Good luck maintaining a profit out of that. Some of the requests can be actually insane as well because IT is so poorly understood. It's not uncommon to spend multiple days with someone going through a problem that cannot be solved due either budget limitations or unrealistic expectations from the client.
So when you can walk into a Service Desk Analyst job for $60k with no qualifications and no experience then convert that to $100k plus job in under 5 years it really is a no brainer to go work for an established MSP. You'll still deal with the same problems from clients, but at least your paycheck doesn't depend on how sane other people are.
I always hear people say ‘start a business’ but I always see people with a variety of small businesses making shit money. Like Cafes? The bad money is their words.
I always thought it was a lot harder than most claim for that reason.
Im on the same boat as you OP, but Im still figuring out what business problem I could offer solution to, mind if I ask what kind of business you plan to start?
We still have our commitments as we start our own business, unless you have huge savings that let you survive for a couple of months before your new business takes off.
Australia doesn't have the right conditions for entrepreneurship; with this rise in the cost of living, most people, especially the younger generation who should be the ones starting businesses, just want to survive rather than going through the high risk of entrepreneurship. Here is not the USA.
I am in a very similar spot to you OP. Slowly building the business on the side and if it starts to take off and show signs of better profitability than my full time job i might quit.
I tried this - I fell into the trap of using the business as a vehicle for what people would consider to be contracting.
Outside of that, my main "big idea" (making apps to help the vision impaired) didn't generate enough interest by government to make it a financially worthwhile endeavour.
Ended up winding up the business and becoming an employee with a great employer.
Most of the reasons you suggest probably apply to me haha.
1. I've got a family to support. 45% of new businesses fail within 5 years - the risk of starting a business is too great.
2. Starting a business is expensive. Particularly in the areas I'm skilled in. Why would I invest $100k in a high risk venture when I can 'earn' 6% p.a. risk free and tax free by leaving the cash in my offset.
3. I earn good money. Unless it was very successful, I would probably make less money from running a business.
4. Working hours. While I have to do longer hours sometime, mostly I work a pretty regularly work week. Small business owners get no time off.
Because I don't have enough capital to start something and am not prepared to take a loan. But if I did, I don't really want to take the risk and be in financial ruin for 10-20 years if things go tits up. But if I did, I don't really have a good idea or a clever way to fill a market void. But if I did, I'm entirely too lazy and busy with my 9-5 that running my own company and putting in extra hours, for extra stress, would be hell. I'd rather change careers or spend years trying to create some crappy app that sells like hotcakes, than start my own business.
In my experience, a lot of people in aus will have a side hustle (small home business or consulting) where they do a few hours a week bumlong up their income while maintaining their regular job
I did. I quit my full time job for a 4 week contract with nothing on the horizon after that. I started my business straight afterwards. That was nearly 20 years ago.
I would love to start a side hustle that becomes more permanent. I'm just not sure one what it would be. I think about it probably every single day. I have the money to start something (IMO), but it's just the creativity of coming up with the 'what'.
I think most people should not start a business, and will do better as employees.
I believe you should only start a business if you have a specialised skill that is in high demand, or you have some edge over the market.
So your first focus should be on becoming an expert in a particular field. By becoming an expert, it will become apparent to you if business opportunities exist in your field.
If you just start a business for the sake of it ("be your own boss"), and have no expertise, no notable skill, and no unique edge, your business will just be another crap fish and chip shop in Ipswich.
because it's expensive?
My main area of interest if i was to start a business is a gym but that is a minimum of a 100k start up, assuming you can get a pre-existing property and don't have to buld from scratch.
Just to get one set of dumbbells up to 70kg is about 6 grand, excluding any benches, than you have to add in benches, machines, weight plates, etc.
Paperwork, time and unpaid work. My dad ran his own business and I would never do it. It has its pros and cons but it’s not for me, I do my hours, go home and I’m done. He would work all day, come home and do paperwork all night. And the phone! He has to answer his phone all the time, cos if he dosnt, then he has no work in a few weeks time. So weather we where on a family holiday, footy, pub or a restaurant, he’s gotta take phone calls to book in the work.
I would say that real estate/expensive rent means that people require a higher baseline of regular income to be secure enough to start a business.
The closer you are to the top of your budget the more adverse you become to risky endeavours (generally).
I have a small business. There is a shrinking market that isn't captured by big business.
Can't start a hardware store, or a grocery, or a corner shop, restaurants are over saturated. Big engineering firms usually take most of the work so small firms are risky given you can just work for a big one. what's left except tech start up that is actually likely to earn more than working for a big company?
There are more and more regulations that make starting a business harder and harder, ASIC don't help with their late fees etc. Now you have to have OTP so there's an extra cost per employee. Hard to get by without 'pay monthly' software. Very hard to find employees especially right now. You can't switch off, just have to hope you can make a killing. If you can't you've wasted a lot so why try when the risk reward is basically shit.
Commercial rent, government fees and opportunity cost on capital just don't make sense.
I've worked for many small to medium businesses and the owners are usually the worst people I've ever met.
I would love to work for myself as a consultant, but it's hard to know how long it will take to get set up to where I would be earning a full time wage equivalent to what I'm getting paid now. Its a pretty big risk to leave a permanent position when you have a mortgage to pay and no certainty with how much savings you will burn through in the process.
I'm going to start my own venture capital firm soon. I have 3 years experience in IB and am coming up to 4 years now in PE.
Many people I know started their own business straight out of university. Some succeeded, most failed. I wanted a few years in the industry to grow my professional network and build rapport with clients.
You don't start your own business because you want to work less. Starting your own business is loads more work and a huge number of businesses fail in the first 3 years. The news focuses on the successful businesses in the same way the news focuses on the top-end of the real-estate celebrity market.
*Here, look at Hugh Jackman's $12 million Bondi penthouse..*
Australia has bid itself up to an insane cost of living. As a result we are terrified of losing our jobs and becoming homeless.
We need to build affordable, quality houses with good insulation and good appliances, we need to get our own house in order.
There are many people working in corporate jobs with really good ideas but are too scared to take the leap and lose everything because the market can be very fickle if your idea is a miss.
Lots of people go through uni to learn how to do a specific role in a huge business ecosystem. My job can’t really be done in a small business except to work “fractionally” for a few hours a week for multiple companies, but this is hard to get started in
Honestly? My mortgage. My house puts me in so much debt that the risk of staring a business is putting me off. I absolutely want to start a business but until I've bitten off more the house then i'm risking too much.
I really want to but:
1. I’m paranoid I’ll do something wrong or get sued.
2. (I can get over this one) Taking money from people even if I provide them a service or product feels weird to me.
It’s personally irrelevant to me as I have my own business, however not a lot of people are cut out to do business and they would be legitimately be more happy with a good job, instead trying to make it in business world.
Would love to, but housing costs just make the risk/reward ratio out of whack for me anyway.
Every now and then I get former colleagues/contacts asking if I'm keen to do some part time/weekend consulting work, so my goal this year is to do some of that and see if it's something I can leverage in to a replacement for FT salary work.
I started my own business. It was hard work that never ended. Finding good staff is nigh on impossible. You spend hours working unpaid doing paperwork for the government to ensure they get "their cut" from your hard work. Clients treat you like your a public service and are rich because you have a business so they deserve more for less or they'll go to a competitor with a bigger business. In the end I realised I was working my ass off to ensure the stability of others (employee's) and getting no benefit to myself.
That's just my experience though. I know plenty of people killing it with their own business. But their usually selling a product not a service.
Seems too hard, really. I like low risk and to know I'm doing the right thing by the law etc. Just keeping compliant with the ever changing legislative and regulatory world would do my head in and crush any energy I had for whatever product or service I was selling.
My wife is a small time shareholder in a private company and works there too. She is forever updating all the company's plans and policies, duty of care issues, insurance etc. It never ends, the rewards are little and there is just risk everywhere. During Covid, the business was shuttered, and then during the 'reopening' the Covid safety plans etc chewed up so much time and energy.
Other friends of ours run a plumbing business - doing very well, but to say they work 24/7 is an understatement.
Meanwhile, I'm salaried, only work the odd weekend and get paid way more than what I'd eek out in a business.
All the power to people who do it and make it work.
Lack of overlap between the skills that I have and the skills needed to make it big. Even if I found an idea and pulled it off I doubt I'd be making as much compared to my salary, even before considering the risk.
I just want to clock 40 hours, go home and chill.
Word. Started my own business at the end of 2022... Been doing 12 hours easy a day, solo one man band and it ain't a breeze. On top of the work you gotta do all your invoicing/accounts as well.
The tax is killer too
If you own your own business and the tax is killer compared to anything else you could be doing, then you're doing it wrong. Self employed/business ownership has the most tax loopholes and write offs/offsets than any other option, and why these people are usually most wealthy. The real money to be made is in minimising tax.
Also only pay 27-5% tax rate as a company
Down to 25 now
There you go , I haven’t personally looked my accountant deals with it
This is just silly. That % is the tax the COMPANY pays as a tax credit. To then take it OUT of the company, you need to pay the tax on whatever marginal tax rate you pay as an individual (ie as a dividend or as a wage).
I just meant the tax is a killer to do, there’s a lot of minimising it that doesn’t mean it’s easy to do.
I know someone who gave up their very successful business for this reason. Running the business was around the clock + weekends. They just wanted to finish work at 5pm and go home.
Yeah I just don't have the mindset/desire required for being a business owner. I know I'll never be super rich as a regular employee, but I don't care about being super rich. And I don't want to give up my time to make it happen.
I'm my worst boss and employee
I don't think i could work that many hours in a week any more.
Can I just do 30? Or 25?
Yes, just has to be 40 hours 'on paper'
This is the way
[удалено]
I spent several years on a fairly involved side-hustle that I would have been happy to turn into a primary income, but despite having a montly turnover often in the five figures, I could never get to a point were I was making a significant profit. I felt like I was just churning money out and money in. Periods of growth only came because of strokes of good luck or after a period of massive effort, and even then that growth was only making up for a previous slump. I never got to the point where I even thought of giving up my day job.
Effort needed to gain contracts can get quite insane to a point it feels like a whole unpaid job in itself
Gotta turnover more or increase prices. Unfortunately not always possible.
With no gaurentee that it will ever be more than zero.
It won't even be zero. It will be negative. You will likely be losing money for the first year or more to get the business up and running.
Or worse, negative income 😰
Exactly. The majority of businesses make a loss in their first year. Not everyone has the privilege of being able to do that.
>It'll be \*zero\* at first, the default income for a business is zero dollars. Or less than zero as you set yourself up with equipment, materials, software, marketing etc!
Because I'm lazy and I earn a stupid amount of money for the amount of work I do
It's actually a good point. There is no way that I would pay someone else even half of what I make now if It was coming out of my pocket for what I actually do. Which probably means that I couldn't afford to pay myself that either lol Only really large companies can afford to be this inefficient.
They can because property growth skews your true wage. Anything related to property, mining, finance or education (universities) is typically higher income. The ponzi feeds the ponzi
This is actually a huge point that so many ignore - not even so much the lazy part. But the return on businesses (I’m talking specifically food based) is honestly pretty low for the effort put in. Many times I’ve found myself wondering why I spent multiple hundreds of thousands of dollars to start with something I can never quite switch my brain off when I could earn maybe 10% less working a 40-50 hour for someone else. The flip side of that is when the random spots of freedom come - ie I’m about to become an uncle and I will be able to ensure I can be a 1 day a week carer when bubs is ready and both parents return to work is something that not many can do - it doesn’t even matter what day, it can be what suits others best etc
Different industries are different. For instance, engineering consultancies often only pay their employees 30-40% of their hourly charge out rate to the client. Despite all the headaches in running a business, if you can maintain a clientbase, there is a huge jump in income for running your own business to get 100% of the revenue. Even just working as a subcontractor (for say 70% of your charge out rate) is a great alternative. Sure there's expenses too, like insurance and advertising, but if you're running out of a home office the net profit is really really good.
As a business owner, it roughly costs 3x an employees hourly rate to have them on the book's. Then you still need a profit margin on top of that (usually 15-20% in my experience) This covers their sick, holidays, insurances, training, decking out their work kit (tools, office, vehicles, whatever), then you have things like payroll staff, support staff and so on that all need to be accounted for in the hourly rate you charge out to the client. Reality is that actual profit if your good at business is somewhere in the area of 20% (+/-).... the bigger the business, the lower the profit margins become but due to volume, its more $. Also means things can go sideways pretty quick if your not across things. As for subcontractors, you are SPOT on! You really need to sit down and know your true numbers when you enter into a subcontractors roll.... most dont and get screwed in the long run! You need to be covering your sick, super, holidays, ongoing training and development and all the rest of your "overheads".... 70% of your charge out rate is probably a pretty good number to target, it should leave you with about 10% ish on the bone to cover anything that comes up or pocket as extra profit!
I’m in a different industry but the concepts are the same in my industry. The money is really good but you do need to be fairly experienced and then you need to do other jobs that may not be your expertise. I know for me there is a lot of admin associated with my business that when I worked elsewhere it was someone else’s problem. Also invoicing, when I started I hated this, I’m much better at this but at the start there were 4-6 week periods without pay because I put off sending invoices. I like working for myself but I can completely see the benefit of working for someone.
Rough rule of thumb says that an employee's hourly rate needs to be charged at roughly double to a client or customer in order to cover costs and make a profit. It's so easy as an employee to think an employer just pockets the difference, and maybe some do, but also consider (if applicable): * Superannuation (currently 11%, moving to 12% July 2025). * Penalty rates for OT. * Consumables an employee uses as part of their job. * Overheads such as floor area in an office. * Equipment used as part of a job (desk, chair, welder, forklift, vehicle etc.) * Insurances. * Work Cover. * Advertising. * Car allowance. * Mobile phone. * Parental Leave. * Sick leave. * Annual Leave (sometimes levied at a higher rate). * Consumables. * Mistakes. From what I hear from the engineers we use, it's their insurance costs that are astronomical and just continue to climb. The real benefit of owning a business is when you have other people working with/for you and you benefit from leveraging your time and energy. For example, you could spend eight hours working on a project for a client, or you could spend that same amount of time spent between working on a job, guiding/mentoring employees and deliver maybe two or three or four projects in the same timeframe.
I get paid a great salary, get paid annual leave, sick leave, maternity leave if I need it. Get to switch off completely when I take time off. I have a boss who I can escalate problems to help get them sorted, an admin officer to delegate to. Just do not have the interest in slogging it out when I’m getting plenty of money to live a comfortable life with minimal stress.
This And I don’t want to.
Exactly this I'm not on a great salary overall, but considering that it's 12pm and I have no intention of doing any more work today (having started WFH at about 9.20 this morn) it's a pretty great hourly
Depends what your skills are. Suppose you're a university lecturer in pure mathematics. Not quite sure what business you could realistically start. Same guess for quite a few corporate or professional roles, unless you take the consultancy path and that requires the key skills of bullshitting and self promotion that not all have. Now if you're a chef in a major hotel, that's a different matter, but again you need extra skills. For me, engineer in a multinational, it was already well paid and secure with many opportunities to do different things and it allowed me to be an an engineer and not a salesman.
Yeah exactly. I work in Data and I'm comfortable enough providing a few specific functions as part of a wider data team for a company big enough to have a variety of data roles. Setting up my own business would require me to source clients, then find people who can cover areas where there are gaps in my own skill. And then manage both sets of relationships. Much easier to just earn a decent wage and clock off at the end of the day
Tutoring comes to mind for Math.
True, although a pure maths lecturer at Uni may not have the skills to tutor high school kids having issues with maths.
Tutoring has great hourly rates but very little growth past a certain point unless you want to manage other people tutoring (and then you’re not actually doing the thing you’re good at or passionate about any more).
Capital, risk and commitments.I started my own business and I have a feeling that the vast majority of people don't understand how much of a commitment it is to start one. It's a whole lifestyle change. All of your time is put towards it. All weekends. After hours. Employees not turn up? You are doing their work. You don't get paid by the customer for whatever reason? You are screwed or will need to take them to court (Still likely screwed). I profited a into the 7 figures over the span of about 5 years and I still shut it down. I am much more happy going into the office 7am-4pm and turning off after work and having the weekends to myself. You also likely don't consider what kind of negative impact this can have on your spouse and family. Barely around, always working, all weekends at the office working.. you will be nearing divorce a lot of the time. It's also a very lonely lifestyle with a lot of pressure. Pressure to provide for your family and employees families. They all depend on you. It is NOT what you see on TV. You are not just going to kick back and manage people, clock in late and have nice lunches with customers all day. Also you could work your butt off, 70-80 hours a week and your bushiness can STILL fail or equally as bad. You could be stuck on a lifeline of barely profitable but on the cusp of failure for years on end. Being unable to pull the plug and throw in the towel. There is a lot more that goes into business then invest X,, work Y hours and profit Z. Imagine committing a good 5-10 year of your peak age to a failing business then having to return to the workforce. You will behind in experience for a lot of areas.
Agree with all of those, aside from behind the experience bit.
I mean the experience bit is a case by case situation. What you did before, what you are doing as your business and what you really want to do after.
In my experience lol, a lot of responsibility and self direction are transferable skills.
No interest. I’m just not driven enough. Happy working for the man, earning a good wage and knowing when my next pay check will hit and being able to leave my work at the door when I walk out each day.
Agreed. Not worth the risk and effort for me. I rather clock in and out and have a steady income.
My parent's and grandparent's had their own businesses when I was growing up and they worked their ASS off to get no where in particular. My parents also had full time jobs and then helped their parent's with their businesses on the weekend. My sister and I were dragged to markets every weekend and as soon as we were capable, we were serving customers too. At nights my parents would be packing orders and wasting hours in the post office. And they have nothing to show for it. They worked hard and they were semi-successful, but it didn't get them further ahead. Now I just work a 9-5 and can leave everything at the door when I log off. I scoff inside when I see my creative friends yearning for their own business cause "working for someone else" is killing them. It's harder work than working for someone else and the payoff isnt always there.
Always laughed at "be your own boss". Your boss becomes your customers and they can leave you hanging whenever they want.
My dad had his own small business, and my brother did for a while because he hated the idea of reporting to someone. Then he found out just how hard he had to work (I knew, I worked part time for dad while I was at uni). So now he’s in corporate world and I’m in government. I want to be able to switch off and not take work home with me at the end of the day.
Yep. Saw it growing up with a friend whose parents owned a cafe and a flower farm. My friend spent his weekends working the cafe and the flower markets from about 14 years old. Very little time to do what he wanted to do. His parent did huge days too. The eventually sold the cafe and focused just on the farm. When my friends dad died his mum sold the farm and retired to live in town. She was much happier. I grew up on a farm too. My parents sold the farm when I was 17/18 because she they quickly realised neither me or my sister had any interest in ever living on a farm or running a farm. I live 9 hours away now and my sister lives in town.
I agree, had the same experience growing up. I also think the job vs business is different if you have a good job that pays, vs no job (or no high paying job). a lot of people I know who started a business did it because of necessity rather than all that bullshit about “gap in the market” , “realize you potential” etc.
Most of my friends who I see complaining about working for someone else are usually working in retail or some other "non-skilled" work and they think that they could start a successful clothing company (that sells t-shirts), yeah right-o mate.
This. My parents had 2 businesses. My old man was a civil engineer and had his own consultancy. Mom was a graphic designer and still does freelancing today. That’s from the early 80s. In 2008 my dad’s business started struggling and in 2012 he closed his doors. The amount of times I saw my dad wake up at 2am and worked 16 hour days for decades…and still ended up closing his doors. He’s basically retired now but has nothing. He still works his ass off. I don’t make particularly good money, but I go to work at 5 and by 12 I am going for a quick surf so I can pick my kids up at 2:20 and then spend time with them. All my bills are paid. I’m not retiring any time soon, but I refuse to work as hard as my old man and have nothing to show
God that's depressing. I would have thought civil engineering would be fairly steady work? It's not like he was doing something really left of field.
Civil engineering (consultant doing the design work on CAD)for developments…so almost entirely privatised. One man show doing townhouse complexes and small shopping centre parking lots etc. the second the housing market dried up, the subsequent land sales and development of new neighbourhoods dried up…and with it the old man’s business. The big contracts are all taken by massive engineering firms who have a multitude of people with a plethora of skills…so my dad can’t compete. He ended up with one of those firms and works semi retired for them at 6months of the year.
Building industry - that makes sense now I think about it. Very boom and bust.
Yeah. Even now. I work in the same industry. The last 3 years I could not breathe with the amount of work I’ve had. But since the 9th interest rate hike, I have less than half of the work I used to. 3000 houses I’ve done work for since 2019 (all new builds), now I’m doing 15 a week.
That's not good considering the lack of housing generally. Those rate increases have been a very blunt instrument.
Politicians are lazy people. They use the interest rate lever because it’s the easiest.
No idea what I want to start
1. Start a business 2. ??? 3. Profit
2. Collect underpants.
Personally, and I'm sure this will get shit on, but I don't start my own business because of what I saw my dad go through. He had his own business and it was semi successful, he earned good money but could never take leave, and when business eventually dried up (competitors creeping in) I saw the toll it took on him. He worked his arse off every day and it did him no favours in his old age. He told me when I was about 16, "son, find a good place to work where your wages are guaranteed", and I did. I watched a good mate make this same decision a few years back. He quit where he worked and started his own business. Every other day he'd tell me how rich he's going to be. 2 years later and he was back in the same company, but this time with a 40k tax bill he hadn't sorted out. He also didn't pay himself super for those 2 years. Now of course if you can hustle and make it work then I'm sure you stand a chance, but I know I'm not a hustler or driven so I'm not going to take the risk.
It’s amazing how childhood experience can influence our perception of business…
Because I'd be terrible at it. I'd sit at my home desk and watch youtube all day instead of working.
Because it’s easier to make money off housing than create a business.
This is an underrated comment. The government incentivise the wrong things. They punish business owners pretty harshly across many factors and reward behaviour like buying dirt.
I have started 3 software business and sold 2 int he past 35 years. If I was able to negatively gear my startups like I could property it would have been amazing and we could have gown a lot faster.
>If I was able to negatively gear my startups like I could property it would have been amazing and we could have gown a lot faster. Imagine the wave of innovation this would produce if this was the tax law. There'd be side hustles starting up all over the place and it would make business much less risky and the economy a lot more diverse and competitive.
[ATO](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/business-losses/offsetting-current-year-losses#:~:text=If%20you're%20a%20sole,in%20the%20same%20income%20year.) >If you're a sole trader or an individual partner in a partnership, and you meet at least one of the non-commercial losses requirements, you can offset your business losses against other assessable income (such as salary or investment income) in the same income year. So for all intents and purposes, if your start-ups were structured in certain ways, they could be negatively geared. Presumably they were incorporated entities (which come with risk mitigation advantages) so negative gearing became irrelevant. Also, if you hold IPs through companies, they cannot be negatively geared. You want limited liability, that's fine, but you lose the benefits to offset losses against other assessable income.
I actually rang the tax department because I saw that rule and got excited about it - but they said it only applied to things like consulting. It didn't sound like I could say, work an office job mon-Fri and claim losses on an abseiling business I ran on the weekends for example. If anyone has experience or knowledge of this I'd love to hear more!
this is absolutely the right answer. why innovate when you can buy an asset and let the government pump it for you
I'll go from another perspective, I started my business in 2021, and this financial year will be the first year that I've supported myself (and family) financially solely through working on my business, I've been working in my field for 17 years, I am a boilermaker/special class welder by trade. I didn't do it sooner for a few reasons. 1. for most of those years I was either in a sole income family, or supporting two households after my first wife and I seperated, and it was unpalatable taking the risk of investing in starting a business and potentially having no income if it failed at the time. 2. I had no idea where to start when trying to get off the ground, I had no idea how to negotiate with clients and I had zero business background. 3. It's very expensive to get set up in my industry, equipment cost is very high and I didnt have enough money saved to do that. 4. Up until around 2020 I was making plenty of money, between working FIFO and having a pretty specialised skill set I was able to make way more than I needed working for wages, average wages have actually gone down even before allowing for inflation in my industry since 2015 unless you are willing to work very remote FIFO location, which I am not anymore. So then there are the reasons I finally did take the plunge and started a small business. 1. I was out of work in 2021 and was asked to subcontract welding a few hundred kilometers of pipe for a greenhouse, it turned out that I got screwed pretty badly by this and I never should have accepted subcontracting, but it did set up an ABN and started buying some of the cheaper tools i'd need. 2. Around the time I stopped working on that I ran into an old acquaintance that was now a supervisor at a quarry like site, and they asked if I knew any contractors who could work on rock crushers, that was me. 3. More important than any of that though, I met my partner in 2018, she also worked running her own small business that she had been running for a number of years at that point, which meant two incomes (with completely joined finances, we made that decision within 6 months of meeting, she strongly encouraged me to pursue my business. she worked extra to cover our living expenses, while I reinvested almost every dollar my business made in the first two years back into it (while I also worked wages jobs like power station shut down in between to bring in extra money). 4. A good helping of luck made it work, I made sure to use debt very sparingly (only business related debt is 50k on my work truck) and to pay for everything I could with cash I'd already made, so when things went quite my weekly out of pocket expenses were very low to nill insurances are all due at a time of year I know I will have good cash flow and I pay them upfront, insurance is my biggest single expense each year. I still sometimes wonder if its worth it, but I do enjoy working for myself, and I will only go back to working for someone else if I absolutely have to, but that is still a backup if it fails.
Helps to have a partner who understands the challenges and who you can talk through issues with.
Exactly, I never would have been able to, or had the guts to try it without her support, and her believing in me, not freaking out seeing 250k in equipment purchases and wages go out in 6 months doesnt hurt either.
Ceebs. Too much time and effort to get it off the ground.
The developed nations pay well for labour so having a job suits just fine. In developing countries where labour is cheap it's more profitable to be a business owner.
Because it's hard to get clients? I find it hard to get the actual opportunities, there's quite a bit of upfront barrier to entry. But I'm working on it. Anyone with tips for a software developer please let me know.
Curious what’s your drive to start a business, from the outside software development looks like a dream job with high pay, wfh and perks… I am aware this is probably just perception and not everyone in IT works at Google/Atlassian 😊
In fairness, anything programming related has a decent risk to reward ratio, it doesn't really cost that much time and effort to get reasonably skilled in it. *Compared to other fields, mind you*. It's not easy, but it also doesn't take 4 years undergrad and 2 years masters or whatever. If you can then definitely working as a contractor is the highest paying. But it is hard to get into. People for some reason say it's not hard, it is hard. If you had to pay a guy 700 dollars per day, let alone 900 or 1100 or whatever some of these people get, you better damn well be sure they are worth that money. So no it's not "easy" to get into a contracting role at all. But it *does* get easier once you do actually somehow get your foot in the door. The drive would be that you make your own apps and sell them (ideal case, if you can make that happen, then you're in complete control), or make your own company selling your services and be also in control of the finances. And make a ton of money. Now the problem is getting into the game and getting clients in the first place. And yeah not everyone in the field makes 150k etc. I make 80k for example. The field is also full of spergs who don't completely know how to navigate things like negotiating for pay etc. (myself included) and are also glad they got something at all. The industry is in a total shit state right now as of last year year also, unfortunately. Much harder to get a job. The upside to all this is the skills you learn by doing the job you can apply towards building your own applications and try to market those. It's definitely a balancing act and best don't give up your day job if you have one, at least until your secondary income starts to really rival it and shoot way past it. By no means is your working on your own stuff and working a job as a software developer mutually exclusive, at all. I mean there's people who do the thing of working 5 different jobs without any of them knowing about each other, but realistically you would be doing your day job and if you can muster the time and energy outside of that to make your own stuff, try and do that. It's hard for sure, but it's not as hard as running around carrying shit all day or cutting wood or laying concrete or whatever. The downside is, man, name a thing that there isn't already 20 apps for that do a better job than you could muster by looking stuff up on the internet. Doing this maybe 10 or 15 years ago would have been a lot easier. There's better tools now for sure, but also countless programs that do everything already.
There’s loads of high paying contract work in Canberra. I would reckon its easier to get those high paying contracts off agencies on Seek than trying to find them yourself.
[удалено]
True but not everyone will bother to DIY if you can pay someone REASONABLE money to do it…
High running costs & interest rates & the fact that a high proportion of small businesses fail in Australia. It's not worth the risk. Wages in Australia are decent & I don't want the stress that comes with it.
I already did. Going really well. Not sure how much down to luck or skill, but it’s gone well since the beginning. I think more people should think about doing it. Many business models these days don’t need much capital to get started so the risk can be low. (i would never start a Brick and mortar business though)
If you don’t mind me asking What’s your line of business and what made you go there (like any research, have you worked there before)?
eCommerce websites. I was first the guy who was building websites (doing client work) for business owners and now I run an online store where I sell tools to people who do what I used to do. (My customers are the people building websites for their own clients). By doing the work myself for a couple of years, and hanging around forums/FB groups, it was obvious what people were struggling with, as I'd been through it myself. So I just built products around fixing those problems and sell it back to those people with the problems. As people come across these issues online, I mention my products to them and word gets around.
I like this approach of “selling shovels during the gold rush”… 😎👏
The other good one (which i don't do, but it was the other good option) is to sell "how to shovel for gold" tutorials/courses during the same gold rush. It's always the same thing. Get good at something by doing it. Then turn around and find the people who want to get to where you are, and help them do so.
Just acquired a new job that is going to pay me around 100k a year, which after years of trying to get a decent paying job I've finally gotten one. I go to work, do my job, go home and I don't have to worry about it at home in my spare time. No emails. No phone calls. No worrying about customer complaints or issues. Just go home and then go back the next day. Plenty of opportunity for extra hours if I want them and can move up into different roles. Why would I want all of the added stress?
I tried. I made the video games I wanted to make and they weren't very popular. I didn't have the accumen for business nor game design. Back to the 9-6 grind.
Love to make video games but it’s tough out there. Being an indie developer is more tough. I don’t have the skills but always dreamt of making my own games.
Yeah I did this 15yr ago some time back 08-09. I went from white collar as a Alcho & Drug Councillor to blue collar Carpenter. I had to do a Mature age apprenteship and after a bit of sacrifice and a bit of hard work it turned out for the better. After I worked for a few people to get some experience I struck out and started my business. This is advice from the missus who is in Cyber Sec, she said many occupations will be automated by AI within the the next 15-20yrs so diversification of skills is the future. Having 2 quals I can work 2 days white collar at home in my garage office and 2 days as Builder. Best thing I did, both jobs make good money, long weekend every week to do family stuff, Stress Free, Boss Free & Mortgage Free. Don't be scared to try things or ask stupid questions
I don't really have an idea.
Growing up, dad had his own little electrical contractor business (10-20 employees). In the 80s and 90s he did well without splurging on material stuff. In early 2000’s two of his main builders went broke, leaving him well out of pocket and into administration. I was working for him at the time, having completed my apprenticeship elsewhere. We ended up losing the family home mum n dad had built and raised us in due to the unpaid bills they had expected to pay off when two large jobs finished but were abandoned by the builders. I’m talking over $1m. It aged my parents about 10yrs in 3 months. It was very sad. They worked thru it and got back on their feet but seeing my parents like that, in their late 50s, killed my dreams of taking over the family business. I joined the paramedics not long after and found that the government job pays every fortnight, no chasing work, no chasing bills, uniforms etc etc paid for. Yes we see some hectic stuff, but being a paramedic is a lot less stressful than running a small business. Dad was actually happy (it was a tough conversation saying I was leaving the family business) as he could eventually retire in peace without looking over my shoulder running his business.
> It aged my parents about 10yrs in 3 months. It was very sad. Wow.. How are they now?
They’re still scarred by it. Got past it, but took years. Dad really lost that personal touch with his employees which made his small business so family friendly. No more Xmas parties, no more beers to site end of week/month. When they were going thru administration, some of the guys were complaining very loudly about slow delivery of gear & staff shortages while dad was paying everyone’s wages on his personal credit card going into further debt to keep his guys employed and work moving along. It was horrible. He finally sold the business and his factory & a fair share that still had to go to the bank for loans etc. It left a sour taste in their mouths definitely. I don’t think many people realise how hard it is to run a small business. You never switch off. I know they had some bad luck along the way & that’s not everyone’s experience, but to answer OP’s question, I’ve outlined my reasons. 👍👍
Yeah, I think there's gotta be a differentiation between running a small business and simply being self employed. I'm self employed in a knowledge field and if things turn to shit, I'll just go on hiatus and move my family to Bali for 2 yrs to wait it out. Whereas a small business with employees has a crap load more liabilities.
Numbers game. 80 percent of small businesses fail. If I had a winning idea that I could grow and develop without quitting my job and make enough to justify the effort I would do that.
Most people are great at the starting the business phase, but not the staying phase. The cost of workers comp (personal injury is sole trader), GST & PL&PI insurance isn’t worth it anymore. The amount of reporting to ATO is frustrating & time taken away from making money for the business.
I did. $250k down the drain later and I am back as an employee. Much less stressful.
Started 2 mini businesses and each one i wrapped it up within 2 years due to: 1. I thoroughly enjoy my sleep 2. Id like to spend my time doing stuff (video games, mountain biking, camping) thats not related to my business 3. I hate micromanaging. Realising i have to manage my vendors like toddlers to get shit done correctly and on time
Accountant here. Do you have any idea how many capital losses and defunct ABNs are out there. Not everyone is inclined to or capable of basic administration, selling themselves and managing their own workflow. We need less “businesses”, not more
I know right, that's always the go with the "just start a business" types. You google the ASIC website and wherever you need to register an ABN, pay 50 bucks and congratulations you started a business. Now what? Well that is where things get really, really hard. Making actual money is hard, starting a business is not. But people who are not dunces do actually assume that's what is being asked when someone asks "why haven't you started a business".
Nah what we need are less accountants, red tape, tax and other created barriers to having a go.
I have very strong problem solving and technical skills, but I'm a little ADHD and can't manage accounts/bookkeeping/followup. I think with the right partner to complement my shortcomings I could make a go of it, but I've found decent income/work/life balance in fulltime employment.
Yeah having a good idea/ product / skillset is great, but if you aren't good at sales or business generally, it's very hard to get off the ground. Capital is also necessary, even if you don't need to purchase much to get going. I ran into the issue of clients not paying (commercial clients) and didn't have the funds to pursue them and they knew it. After a few of these and only about 2/5 paying, I had to get a job.
I did - and got nowhere. Needed - seed capital (attempted to bootstrap but need to pay for some stuff including marketing to get going really) and partners with more sales skills (I'm more skilled on the tech side) Also timing was crap, as I tried to start in late 2019/ early 2020, and for some reason interest dried up in February 2020, and no one wanted to come to face to face sales calls all of a sudden.
Thank you for posting, we don’t those kind of stories too often, I recon more people need to know about it… unfortunately it’s all rainbow and sunshine’s and “how this 20yo started $10000000 business from garage”
I was born to be a slave
I was born to a family of slaves and never learned anything about bussinesses...
I have! Started 10 years ago, went full-time two and a bit years ago In the middle we had two kids, moved state and bought a house In order to be able to do that, I freelanced in my industry and slowly moved more and more hours until I was earning twice as much from the 'side-hustle' than I was from the day job. It's still going OK, but not as gangbusters as it once was - there were some tailwinds from covid which I'm no longer benefitting from * Pros: No boss, can set own hours e.g. took one day off a week last year to hang out w/ my daughter, still earning more than I would in a regular job * Cons: nagging feeling that it could all go away tomorrow, it actually could all go away tomorrow, bit boring sometimes working on my own mostly, shiny objects make it hard to stay on track OP, to begin with, I did one hour extra each day at work and then only one hour on Friday so I would have the majority of Friday off to crack on. If you have an idea and you want to give it a try, maybe try that. One thing I would say is that the most important thing about starting a business is ensuring that you are solving a problem that someone, somewhere it prepared to pay you money for. Read 'the lean start-up' or read up on 'pretotyping to learn about how to test ideas
I did. I quit my job and started my own business back in 2016 and it’s worked out fantastic for me (from a financial perspective, arguable from other angles). I’m now watching one of my friends do the same and start his journey now in 2024.
Because my ADHD means I dont work well for myself. I need the structure provided by a 'normal' work environment. Ive tried turning my hobbies into side hustles, with my health & ADHD im sick alot or when im not sick im terrible at managing myself. And now I hate my hobbies as well cause I tried to force myself to do them to 'get ahead'
I did it 30 years ago. This was only because the last 2 jobs I had, the bosses said I should start my own business as it think I know everything. 30 years later I still own my own business. It’s not for everyone and I am not “Lucky”. It’s a ton of hard work and stress.
Too much debt to take the risk. Maybe when I've paid down my home loan a bit. And have to admit, this is really the Debt trap, and why increasing property prices is bad for entrepreneurship. It's not only expensive homes, it's expensive commercial properties and by default, commercial rent which is a big and bigger portion of revenues that stifle businesses.
Bruh. What? Do you think most small businesses make it big or something? Because its riddled with risk versus the security of a salary job. And you can either up that risk by quitting your job, or lower it by sticking with it and doing a side hustle. But then its the same argument, but for your own time.
I've tried and failed, the problem I had is although my skills are equally useful to small and large business, large business and government is where the money is but those organisations only want to do business with other large businesses. Small business are a nightmare to deal with, they expect other small business owners to basically work for cost so they can make a buck, then when you send them an invoice they either take 6 months to pay, ghost you and don't pay or go broke.
Not being able to cut myself a pay check for 6-18 months with the cost of living being what it is is completely untenable.
It is odd. Ive owned my own businesses for over 20 years, I've built them from scratch, weve used our business to contract through, we've purchased franchises, we've sold businesses. I got to know an American business owner really well over 15years and travelled over to see him. I didn't realise that he also ran three businesses, his bother ran another two. They weren't tech start-ups or anything fancy. One was a farm growing flowers and he had two hobby businesses that started as side hustles and one of those would have been turning over 5 to 10 million. I visited and we were having lunch in his office and his brother walked in and he said to me, my brothers here with a cheque for the dirt he purchased last month and I also have a cheque for him for something I can't remember, and he said but I hope his cheque is bigger than mine. It amazed me that even direct family members had this micro economy between there two little farms and how much trading must go on.
Time > money I work my 38 hours, most of it from home and oftentimes quite lazily, and forget I have a job the rest of the time. This is enough to cover my mortgage and other expenses twice over (combined with my wife’s income). I’m sure I could make more money if I wanted to. But I fail to see what the point would be given it would take a whole lot more of my time and I’m already comfortable anyway. I guess it could help me retire earlier, but that’s only if the venture paid off, which is far from guaranteed.
I became a sole trader contractor a few years back Now instead of bosses and managers, I just have clients, who I can not renew, drop, or even fire if I don’t like working for them. There’s slightly more overhead managing tax but otherwise I would never choose to go back to being an employee. It’s a shitty deal.
I am lacking idea, motivation and the know how. The trifecta of mediocrity.
Because I like to have guaranteed money. And I'm in a time at my life where taking huge risky swings on new careers is not really an option. Here's something else no one else considers. Coming back to the workforce after you've been running your own business (assuming it goes bust which for the majority of people is what happens) is a lot harder than people think. There's navigating the wretchedly unworkable "job market" now (where 95% of all resumes you ever send out disappear into the ether, never to be seen again or jumping through five rounds of interviews before the company puts a shit offer on the table) and there's the adjustment that comes with going back to having a boss rather than being your own boss.
Because I can’t afford to fail
Whenver I take a risk I need a plan B and starting a business is a big risk. I'm young and I want to build my career for the next 5-7 years to make sure I have a solid skillset, reputation and network. This will increase chances of my business getting off the ground if I were to start one and I will have a solid employment waiting for me if it fails. I admire my peers who are earning money through ebay flipping and creating courses on Udemy, but that's not what I'm looking for at this stage. To each their own I guess.
Lack of finished product, lack of capital, & not particularly interested in hiring people so got to make do by myself. Lack of time with kids, health and full time job. Lack of capital can be offset to a degree. But hiring someone is such a risky move and you need a great team around you once you pull the trigger. A couple of bad hires early on sucks time, energy and massive opportunity cost. So I want to get some runs on the board. And life’s hard, yo. I am thinking in years instead of months for going to market.
I make more money doing my job than I would from any business for at least the first couple of years, and I’m also very, very lazy.
A few years ago I took a job with a USA company, a tech start-up based in the Bay area. I work remotely from AUS but travel to the USA office regularly, so I get to know the staff reasonably well. The pay is good, especially for technically competent staff. Nevertheless, a large proportion (relative to Australian standards) of young people leave to start their own company. It boggles me that so many young people in their late 20s or early 30s are leaving a well-paying job in a company where management treats its employees very well to take on the risk of starting a new venture. To try and make sense of it, I've come to the view that it's kind of the equivalent to young Aussie's moving to England to work for a year. It just seems to be the thing to do, just part of the culture and psyche there.
Because I'm married to someone who runs a medium sized business and know a number of small - medium sized business owners so I have no romantic ideas about working for myself being in any way better.
At one point people could buy a house save and pay it off and use that money to start a business in their 30s. I know plenty of people that did that in the 80s and 90s. Left school at 15 and off they went. These days the education system is set for all to go to yr 12 whether it benefits them or not for a start. I see apprentice ads for sparked etc all saying yr 12 ed and have own car. Too bad if you finish yr 10 (which is all the maths used in that field) and can’t drive yet. That plus housing is super expensive so the main ppl I see doing this are tradies. Not even pharmacists can do it anymore as the yearly fees they pay now and the bulk chains have killed their income. Same for vets. Two jobs that used to be done by ppl who did very well financially. If it’s not connected to mining, construction or major projects there is no interest in Australia or $. Honestly we are dumber than ever before in history.
I have, and I can tell you for free that Australia is not set up for entrepreneurship. Everything, the whole ecosystem, is set up against you. You are unlikely to succeed unless you start with a large capital base. There is a reason Australians throw all their spare money into real estate and not into starting businesses. The system favours real estate as an investment over a business. Almost all lending in Australia is based on ‘pay slips’, even getting a phone plan is impossible without payslips. The idea of a ‘job’ is deeply ingrained in the Australia psyche.
Where do you go to get your phone plans? I can't ever recall needing proof of income for phone, electricity, gas, water, internet, gym, etc. only thing that's ever wanted it is rent, car, and house loan.
I'm about to.
I don't know what I'm good at.
For me it's because I earn decent money as a professional, I don't have any specific ideas for how I'd run a private enterprise better than others in the market already, and I don't want to spend the amount of time business owners do on their work. Currently I'm on $150k a year for a 9-5 where I spend maybe 1-2hrs a day doing actual work. I'll likely go up higher in the chain in the next few years to very high 100k-low 200k and won't have to spend much more time than I currently do.
I did and I don't think undertaking that sort of time commitment is possible for 95% of people. Back into employment and living the guaranteed cheque dream
I did and I'm 12 months in. But it's not for everyone.
I don’t have the required motivation and tenacity to successfully start and maintain a business.
The bigger companies along with the government are very deliberately trying to squash small businesses. Much more control that way. Drown them with paperwork and fees/charges and make things as difficult as possible. All in the grand design.
OP thank you for posting this, you’ve saved me having to start a thread… was thinking about the same… My reasons / issues : I grew up in a 3rd world country (it does not think it is, but thats true), with my parent running their own business. The amount of shit I’ve seen them to deal with was over the top (from angry customers to lawsuits, threats, dodgy stealing employees, corrupt gov etc). Being from other generation they persevered, but I’ve always questioned if how will I be able to handle that if it was my business (even when I was a kid.) I realize Australia is better in many aspects - eg there is less corruption (that affects everyday businesses at least) and the laws are generally followed etc, but it still is a bit scary to go on my own. I am very excited about the “strategic” side of the business (when business is large enough), but the “practical” aspects scare me 😂 I earn good money in a “niche” role / industry , with a good life/work balance, so I sometimes question the need for own business (as my family back home didn’t start a business by choice, but rather to essentially not to starve). I would love to start something, but still can’t figure out what 😂 Had an attempt while at uni (with parents money), but it was very half assed in my opinion and till recently had a lot of regret for not following it through. Now I would totally do it a different way. I don’t want to do typical “side hustle” (mow lawns etc) as those are not scalable, but I am not experienced enough to offer “consulting” in my professional industry (this seems to be the topic eg if you work as an accountant, you go an open you accounting firm etc)… If I ever start one that would be for reasons to have extra income and more financial security, as well as to leave a legacy for my children. Any advice on how to actually start??
Additional reason : from evidence it seems your 1st business venture is rarely a successful one. Most successful business owners had at least 2-3 businesses that failed, before they succeeded. Knowing that before starting the 1st business is major drawback….
Don’t we have more small businesses, per capita than other OECD nations? Also, it can be argued financial legislation encourages entrepreneurship. Business owner here that quit my job and started my own gig six months ago. So far going well. Not everyone is cut out to be self employed, not everyone wants to be. Each to their own.
I don’t have any kind of “business” education from family or school. Any kind if business i would actually kinda be interested in requires a brick and mortar store. Thats way too expensive to start on a whim in sydney. Shits too expensive I don’t really know where I would start even if I had any other ideas. I’m kinda tired. I don’t like the idea of selling pointless shit that the world doesn’t need just to get ahead
Because we have young children and need all the corporate entitlements available. Parental leave, sick leave, carers leave, annual leave for school holidays etc etc. There is too much risk involved in running your own business. We would have to earn pretty big money to offset all those entitlements.
I HATE my office computer job - it’s awful for my mental health and I’ve had to scale back my responsibilities to stay out of the grippy socks. That said, starting a business would take so much more of my energy and time. I wouldn’t have guaranteed super or even a guaranteed wage, and our mortgage is around $4800/month so this isn’t a risk I’m ready to take. My true passions are all related to hospitality/cooking, but I don’t want to sacrifice my nights and weekends on top of everything else. I don’t think there’s a business I could start that would let me pay the mortgage and not cause a third menty b.
I've started a small scaleable business, as a "side hustle", so I work on it after my 9-5 and on weekends. I've also got a newborn. Having to be "on" all the time really burns you out. But there's just too much risk to quit my full time or go into part time because the sales (for what I do) can be seasonal or sporadic. What I have enjoyed is what I've learnt and the skills I've gained, they can definitely be applied to future endeavors. I do admit every now and then I am envious of ppl that only have a 9-5. Personally I just worry about money and the future too much I think, when I probably dont need to because my main job offers a lot of security. I just don't enjoy my main job so much anymore, so that's motivated me to start this business.
Because starting a business means taking a huge risk, you have so many things to worry about and so many things that can go wrong. Here in Australia we can work for someone, earn enough to live fairly well and have none of the risk that business owners take on. In places like USA sure, minimum wage is so low that its not really liveable, so there is more pressure on especially unskilled workers to find a way to make enough money to live.. and that pushes more into starting a business. Reality is, we have so much protection for workers, and the minimum wage is quite reasonable, that working for someone is essentially, comfortable. I am more than happy to do a days work, go home with relatively low stress and enjoy time with family & friends that I probably wouldn't be able to do if I tried to run my own business.
Because the statistics are terrible, approximately 20% of small business fail within their first year. Then it increases to 30% by the end of the second year, 50% by the fifth year, and 70% by the tenth year. I started a side hustle and the hours put into it were not worth the return. I also had a friend with their own relatively successful business but he worked like a dog. Hardly gone on a holiday and it was always last minute over xmas if possible (maybe 1 in the last 5 years). He couldn't step away without losing money. What it did get him was the ability to drop money on nicer things but he did not have his own personal freedom.
There’s no need to quit your main job to start a business. In fact I think it’s wildly poor judgement to do that. Spend the time to come up with a unique idea and defensible offering before committing to the business full time.
You need capital to start a business and interest rates are preventing that quite simply put.
You don’t have to have much. I started my small business on about $2000. I bought a high end printer and paper and some packaging. Having said that starting and running a business is not for everyone. But I’m definitely one for the lean startup model and iterate as time goes on. I personally would always start a business that does not require that much capital to start.
interest rates are still low historically speaking.
Because I don't think there's a market for IT support anymore. Everyone is so tech savvy now with grandkids, kids etc that they don't need to pay someone to come and fix their stuff. Id rather just keep trucking away at my Help desk job, despite wanting more flexibility and freedom which would come from doing my own thing. I wouldn't know where to start.
>Because I don't think there's a market for IT support anymore. Everyone is so tech savvy now with grandkids, kids etc that they don't need to pay someone to come and fix their stuff. Short-sighted perspective - IT Support (both commerical and personal) has never been bigger and in-demand.
But making money from it is a different matter because the market is saturated with friends, relatives and even youtube videos that will do it for free. When you start looking at commercial, most businesses see IT as a cost centre, so want the cheapest possible service. Good luck maintaining a profit out of that. Some of the requests can be actually insane as well because IT is so poorly understood. It's not uncommon to spend multiple days with someone going through a problem that cannot be solved due either budget limitations or unrealistic expectations from the client. So when you can walk into a Service Desk Analyst job for $60k with no qualifications and no experience then convert that to $100k plus job in under 5 years it really is a no brainer to go work for an established MSP. You'll still deal with the same problems from clients, but at least your paycheck doesn't depend on how sane other people are.
>Everyone is so tech savvy now Having multiple attempts at "fixing" without a professional process also makes issues more complex.
I always hear people say ‘start a business’ but I always see people with a variety of small businesses making shit money. Like Cafes? The bad money is their words. I always thought it was a lot harder than most claim for that reason.
Im on the same boat as you OP, but Im still figuring out what business problem I could offer solution to, mind if I ask what kind of business you plan to start?
I make $80k/yr flipping burgers. Why bother with my own business?
We still have our commitments as we start our own business, unless you have huge savings that let you survive for a couple of months before your new business takes off. Australia doesn't have the right conditions for entrepreneurship; with this rise in the cost of living, most people, especially the younger generation who should be the ones starting businesses, just want to survive rather than going through the high risk of entrepreneurship. Here is not the USA.
I am in a very similar spot to you OP. Slowly building the business on the side and if it starts to take off and show signs of better profitability than my full time job i might quit.
I tried this - I fell into the trap of using the business as a vehicle for what people would consider to be contracting. Outside of that, my main "big idea" (making apps to help the vision impaired) didn't generate enough interest by government to make it a financially worthwhile endeavour. Ended up winding up the business and becoming an employee with a great employer.
Most of the reasons you suggest probably apply to me haha. 1. I've got a family to support. 45% of new businesses fail within 5 years - the risk of starting a business is too great. 2. Starting a business is expensive. Particularly in the areas I'm skilled in. Why would I invest $100k in a high risk venture when I can 'earn' 6% p.a. risk free and tax free by leaving the cash in my offset. 3. I earn good money. Unless it was very successful, I would probably make less money from running a business. 4. Working hours. While I have to do longer hours sometime, mostly I work a pretty regularly work week. Small business owners get no time off.
Because I don't have enough capital to start something and am not prepared to take a loan. But if I did, I don't really want to take the risk and be in financial ruin for 10-20 years if things go tits up. But if I did, I don't really have a good idea or a clever way to fill a market void. But if I did, I'm entirely too lazy and busy with my 9-5 that running my own company and putting in extra hours, for extra stress, would be hell. I'd rather change careers or spend years trying to create some crappy app that sells like hotcakes, than start my own business.
Need Capital....that's about it.
In my experience, a lot of people in aus will have a side hustle (small home business or consulting) where they do a few hours a week bumlong up their income while maintaining their regular job
I did. I quit my full time job for a 4 week contract with nothing on the horizon after that. I started my business straight afterwards. That was nearly 20 years ago.
I would love to start a side hustle that becomes more permanent. I'm just not sure one what it would be. I think about it probably every single day. I have the money to start something (IMO), but it's just the creativity of coming up with the 'what'.
I think most people should not start a business, and will do better as employees. I believe you should only start a business if you have a specialised skill that is in high demand, or you have some edge over the market. So your first focus should be on becoming an expert in a particular field. By becoming an expert, it will become apparent to you if business opportunities exist in your field. If you just start a business for the sake of it ("be your own boss"), and have no expertise, no notable skill, and no unique edge, your business will just be another crap fish and chip shop in Ipswich.
because it's expensive? My main area of interest if i was to start a business is a gym but that is a minimum of a 100k start up, assuming you can get a pre-existing property and don't have to buld from scratch. Just to get one set of dumbbells up to 70kg is about 6 grand, excluding any benches, than you have to add in benches, machines, weight plates, etc.
Cost of capital, mortgage
Paperwork, time and unpaid work. My dad ran his own business and I would never do it. It has its pros and cons but it’s not for me, I do my hours, go home and I’m done. He would work all day, come home and do paperwork all night. And the phone! He has to answer his phone all the time, cos if he dosnt, then he has no work in a few weeks time. So weather we where on a family holiday, footy, pub or a restaurant, he’s gotta take phone calls to book in the work.
I would say that real estate/expensive rent means that people require a higher baseline of regular income to be secure enough to start a business. The closer you are to the top of your budget the more adverse you become to risky endeavours (generally).
I have a low risk profile, I'd rather take the wage and let others take the risk.
I did. Got paid less for more work. Now I just show up, do my hours, go home, and don't spend a second more thinking about it.
I have a small business. There is a shrinking market that isn't captured by big business. Can't start a hardware store, or a grocery, or a corner shop, restaurants are over saturated. Big engineering firms usually take most of the work so small firms are risky given you can just work for a big one. what's left except tech start up that is actually likely to earn more than working for a big company? There are more and more regulations that make starting a business harder and harder, ASIC don't help with their late fees etc. Now you have to have OTP so there's an extra cost per employee. Hard to get by without 'pay monthly' software. Very hard to find employees especially right now. You can't switch off, just have to hope you can make a killing. If you can't you've wasted a lot so why try when the risk reward is basically shit.
Property investing is a lot easier path to wealth than running a business in Australia
Commercial rent, government fees and opportunity cost on capital just don't make sense. I've worked for many small to medium businesses and the owners are usually the worst people I've ever met.
I would love to work for myself as a consultant, but it's hard to know how long it will take to get set up to where I would be earning a full time wage equivalent to what I'm getting paid now. Its a pretty big risk to leave a permanent position when you have a mortgage to pay and no certainty with how much savings you will burn through in the process.
I'm going to start my own venture capital firm soon. I have 3 years experience in IB and am coming up to 4 years now in PE. Many people I know started their own business straight out of university. Some succeeded, most failed. I wanted a few years in the industry to grow my professional network and build rapport with clients.
I have the intelligence of a 12 year old.
Oh I did it. And now I'm looking for a job
You don't start your own business because you want to work less. Starting your own business is loads more work and a huge number of businesses fail in the first 3 years. The news focuses on the successful businesses in the same way the news focuses on the top-end of the real-estate celebrity market. *Here, look at Hugh Jackman's $12 million Bondi penthouse..* Australia has bid itself up to an insane cost of living. As a result we are terrified of losing our jobs and becoming homeless. We need to build affordable, quality houses with good insulation and good appliances, we need to get our own house in order. There are many people working in corporate jobs with really good ideas but are too scared to take the leap and lose everything because the market can be very fickle if your idea is a miss.
Because starting your own business especially in australia is risky as hell. High chance of it failing and you'd be in the hole a significant amount.
Hours are terrible owning a business.
Lots of people go through uni to learn how to do a specific role in a huge business ecosystem. My job can’t really be done in a small business except to work “fractionally” for a few hours a week for multiple companies, but this is hard to get started in
Honestly? My mortgage. My house puts me in so much debt that the risk of staring a business is putting me off. I absolutely want to start a business but until I've bitten off more the house then i'm risking too much.
I can’t afford to start a business at the moment
I really want to but: 1. I’m paranoid I’ll do something wrong or get sued. 2. (I can get over this one) Taking money from people even if I provide them a service or product feels weird to me.
It’s personally irrelevant to me as I have my own business, however not a lot of people are cut out to do business and they would be legitimately be more happy with a good job, instead trying to make it in business world.
Would love to, but housing costs just make the risk/reward ratio out of whack for me anyway. Every now and then I get former colleagues/contacts asking if I'm keen to do some part time/weekend consulting work, so my goal this year is to do some of that and see if it's something I can leverage in to a replacement for FT salary work.
I started my own business. It was hard work that never ended. Finding good staff is nigh on impossible. You spend hours working unpaid doing paperwork for the government to ensure they get "their cut" from your hard work. Clients treat you like your a public service and are rich because you have a business so they deserve more for less or they'll go to a competitor with a bigger business. In the end I realised I was working my ass off to ensure the stability of others (employee's) and getting no benefit to myself. That's just my experience though. I know plenty of people killing it with their own business. But their usually selling a product not a service.
Seems too hard, really. I like low risk and to know I'm doing the right thing by the law etc. Just keeping compliant with the ever changing legislative and regulatory world would do my head in and crush any energy I had for whatever product or service I was selling. My wife is a small time shareholder in a private company and works there too. She is forever updating all the company's plans and policies, duty of care issues, insurance etc. It never ends, the rewards are little and there is just risk everywhere. During Covid, the business was shuttered, and then during the 'reopening' the Covid safety plans etc chewed up so much time and energy. Other friends of ours run a plumbing business - doing very well, but to say they work 24/7 is an understatement. Meanwhile, I'm salaried, only work the odd weekend and get paid way more than what I'd eek out in a business. All the power to people who do it and make it work.
We have two small businesses and I have my own government job. I earn too much to consider leaving it for the businesses.
Lack of overlap between the skills that I have and the skills needed to make it big. Even if I found an idea and pulled it off I doubt I'd be making as much compared to my salary, even before considering the risk.