The top four things for sole traders and the self employed

Starting a sole trader business and operating as a sole trader can be very liberating. In fact, more than 10% of Australia’s workforce are sole business owners or managers.

As a sole trader and self-employed individual you are required to do it all on your own, which may be daunting at first. But you are also the master of your own destiny, meaning that you can pick and choose the clients you work with and the jobs you accept and turn down. You can also choose when and where you want to work.

While there are certainly no guarantees in business, even for sole traders, there are certain tips and tricks around how to run a sole trader business that both aspiring and existing sole traders can benefit from introducing into their business operation. Let’s take a look at four key areas where sole traders can focus their energy and resources to grow their business.

1. Become a rigorous financial planner

As a sole trader you are undoubtedly an expert at your trade. But as a sole trader and small business owner you will also benefit from developing your financial planning skills and practical knowledge of how small business finance works.

Putting the time, effort, and commitment into honing your finance and accounting skills will in time enable you to better visualise all the moving parts in your sole trader business. And once that happens, you will feel empowered to make better day-to-day decisions for your sole trader business.

This is a pivotal point for sole traders in particular, because what often causes sole traders to fail is a lack of cash flow. But as you improve your financial planning skills you will increasingly grow in confidence and feel empowered to make the best financial decisions for your business.

2. Become a precisely accurate record keeper

Managing your sole trader records during tax season, organising operational budgets for your sole trader business, and tracking your business expenses can be tedious and time-consuming. So you don’t want to also make it confusing and difficult for your tax accountant to decipher.

To avoid making a minefield of your business records, introduce a systematic naming convention to help better organise all the critical information that together will help keep your sole trader operation chugging along and growing.

For busy sole traders, it can sometimes be hard to commit a great deal of time to initially setting up the business software and systems, as well as the procedures and processes, for accurate and efficient business record-keeping. But it may be worth taking a step back and looking at the time you will save in the long run by becoming a truly efficient and accurate record keeper.

Together, accurate record-keeping, organising filing systems, investing in intuitive information business management software and business budgeting can enable you to introduce a new level of financial literacy to how you run your sole trader business.

3. Become a people leader

For sole traders, developing your skills as a people leader may sound like an oxymoron on paper. But many sole traders employ people to work for their sole trader business, so developing your people skills and becoming a great leader will benefit your sole trader business.

Also, as the sole owner and operator of your business, you will be the face and personality behind your company’s brand. Potential customers will be more inclined to do business with you if you project confidence and demonstrate great leadership. And this is doubly important when you’re trying to secure new business from clients who have never dealt with you.

In business, great people leaders don’t only lead their team members. They also provide leadership to their clients, who have turned to them for help. As you develop as a people leader, the confidence you project in conversation will prove disarming. It will help put new business prospects at ease and make them more comfortable to commence a working relationship with your sole trader business.

4. Reduce the risk to your business

Our final tip for sole traders isn’t about growing your sole trader business, but rather about protecting it and helping to ensure that it is built to last for the long-term.

Sole traders and the self-employed can actively reduce the risk and liabilities to their business through sole trader insurance – BizCover’s name for business insurance policies designed for the needs of sole traders and the self-employed. Sole trader insurance covers an extensive list of unexpected events that may impact your small business.

While you’re managing your sole trader business, let BizCover lend a hand by simplifying your sole trader insurance*. Take a look at our dedicated sole trader insurance page, get a Public Liability insurance quote or give us a call 1300 920 864 to see how we can help protect your sole trading business.

*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2022 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769

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