8 essential business tips for sole traders and small business owners

1. Choose your business name wisely

Sole traders doing business under their first names and surnames (i.e., John Smith) do not need to register a business name. However, if you wish to trade under a different name, it’s important to choose your business name wisely.

When choosing a business name, you may want to:

• Keep it simple – Choose a name that is easy to spell, pronounce, and remember.
• Make it memorable – A good business name should be catchy.
• Make it relevant – Ideally, your business name should give people some idea of what you do.
• Be unique – Choose a name that is different from your competitors to help avoid confusion and stand out in the market.
• Avoid limitations – Names that are too specific or limited to a geographic area may restrict future growth as your business expands its offering or service area.
• Avoid negative connotations – Names that are offensive, misleading, or culturally insensitive may turn off customers or create negative press for your business.

2. Get an ABN

An Australian Business Number (ABN) is required for Australian businesses that meet certain criteria. An ABN allows you to:

• Register for GST (if applicable)
• Lodge activity statements with the ATO
• Register for PAYG withholding and meet superannuation obligations
• Meet other federal, state or territory obligations (i.e., payroll tax, workers’ compensation, operating licenses)

You can apply for an ABN at the same time as registering a business name.

3. Consider business insurance

Protecting your business helps ensure that it is built to last. Sole traders and the self-employed can actively reduce the risk and liabilities to their business through sole trader insurance (BizCover’s name for the range of cover options available to sole traders).

Sole traders consider different types of insurance based on their business type, activities, and unique needs. These include:

• Public Liability
• Professional Indemnity
• Business Insurance Package – These can be customised to include cover options such as Portable Equipment (Tool insurance), Business Interruption, Contents, Building, Tax Audit, and nine other types of cover.
• Cyber Liability
• Personal Accident & Illness

4. Take financial management seriously

Financial planning and accounting are important for all businesses. Poorly managed cash flow could cause a sole trader or self-employed business to fail. To manage their finances, sole traders may want to:

• Open a separate bank account – This may help you track business income and spending, as well as make tax time easier. It may be a mandatory step for ABN holders.
• Keep accurate records – This is important for monitoring cash flow, chasing outstanding invoices, and filing tax returns.
• Pay yourself a salary – While you are not an employee, paying yourself an hourly or yearly wage can help you better track how the business is doing financially, monitor cash flow, and create accurate budgets.
• Get help from a financial professional – If accounting and bookkeeping are completely outside your skill set, hiring a part-time or freelance accountant, bookkeeper, or tax agent may make sense for your business.

5. Master time management

Time management is more important than ever when you’re a sole trader or self-employed. For better time management, sole traders may consider:

• Prioritising tasks
• Set daily or weekly goals for completing tasks
• Keeping an appointment diary or calendar
• Batching similar tasks to increase efficiency
• Avoid splitting focus with multitasking
• Schedule (and take!) breaks to keep your mind fresh

6. Build your online presence

Customers and clients are increasingly turning to the internet to find businesses. Even if someone gives them a word-of-mouth referral to your business, they may still want to check you out online. A well-crafted online presence helps build your brand recognition and professionalism.

Sole traders building their online presence may want to:

• Build a website for their business
• Create a Google Business Profile
• Create social media accounts for their business
• Establish a consistent brand across all websites and profiles (i.e., logo, colours, tone of voice)
• Learn basic SEO (search engine optimisation)
• Invest in digital marketing (Google ads, Facebook ads, etc.)

7. Use social media to your advantage

Social media can help you reach new customers and keep in touch with your current ones. However, social media management for sole traders is different from posting to a personal account. Sole traders and self-employed businesses should:

• Create accounts where your customers are – Research the platforms used by your customers and/or ideal customers and create accounts there.
• Share valuable content regularly – Share things like client testimonials, educational tips, promotions, and behind-the-scenes looks consistently.
• Aim for quality over quantity – While you want to post regularly enough that it’s clear your profiles are active, it’s important to only share content that is high-value and engaging to your customers.
• Keep it professional – Think about what you are sharing and consider if it promotes your business well or will potentially alienate your customers.

8. Build strong customer relationships

Customer relationships are the key to a thriving small business. Happy customers can provide valuable referrals and reviews to help you grow your business. Sole traders and self-employed businesses can build strong customer relationships by:

• Providing excellent customer service
• Tailoring your services and/or products to better meet customer needs
• Being open and honest about your products, services, and processes
• Setting clear expectations regarding timelines and deliverables
• Providing education on your services or products
• Staying in contact through multiple channels (i.e., email, social media, phone calls)
• Ask for feedback and update your offering or services in response (if you are able)

Bonus: 3 tips to save money as a sole trader

Saving money is essential for many sole traders, especially if you’re operating under a tight budget. Here are three easy ways to save money:

1. Compare business insurance – With BizCover, sole traders and self-employed businesses can compare multiple quotes and see if they can save. It only takes minutes to receive free quotes, choose cover that fits your needs and budget, and buy instant cover.
2. Negotiate with suppliers and vendors – The businesses you work with may be willing to discount their supplies or services if you sign a longer contract with them. You may also be able to offer your services to them in exchange for a larger discount.
3. Research tax deductions – Sole traders may be eligible to deduct things like home office costs and business travel to reduce their tax liabilities. Speaking with an accountant or tax agent could help you find savings and avoid a future audit.

While you’re growing your sole trader business, let BizCover lend a hand by simplifying your business insurance. Go online or give us a call 1300 920 864 to see how we can help protect your sole trader business.