When passion and good business advice combine, anything is possible
28 April 2022
When it comes to running your own business, passion is everything. And people with passion have the ability to create remarkable businesses.
Passion and enthusiasm are not unique traits for someone starting a business, and I am yet to meet a successful entrepreneur that lacks enthusiasm for their product or service they sell. Nick Thomas from OnTrack Tasmania is a great example of this.
When I first met Nick, I was blown away by the level of passion he had for the disability sector and the enthusiasm he had for the services he could provide the community. Nick had started NDIS service provider, OnTrack Tasmania, as a sole trader only three years prior. As he sat in our boardroom at Findex, he had an abundance of ideas for expansion with new service offerings that could fill three white boards. Nick had some amazing ideas that would have a lasting impact and see his business have a growth trajectory like no other business I have seen before. But first he needed to address his business structure.
Many people starting a business tend to be highly focused on their go to market strategy and rightly so. They want to get a few sales secured to see if the market shares their enthusiasm for their product or service.
Many of these businesses start out as sole traders as this is the fastest and easiest tax structure to get your product in the hands of your buyer. However, running a business as a sole trader is rarely the best long-term structure from either a tax, operational, growth or asset protection point of view.
When it comes to selecting the most appropriate tax structure for your business it’s important to take a long term view of the business and consider matters like:
The potential profit of the business long term
How to best minimise Income Tax
How to maximise asset protection
Allowing for the creation of additional businesses to the group
The ability to have new Partners or investors join
Future Capital Gains Tax consequences
For Nick and the Ontrack Tasmania business it was clear that we needed to address the tax structure very early on to allow the business to expand and grow in both NDIS participants and staff.
Nick sought our advice on the positives and negatives of potential structures including Companies, Trusts, Partnerships and Self-Managed Super Funds (SMSF). Working closely with Nick and our Structure and Risk team, we created a tax structure that would allow the business to keep growing and have the flexibility to add new businesses and employees to the group.
Having the business set up in the right tax structure has allowed Nick to focus on growing his business and follow his passion towards providing more support to people living with a disability.