Business Growth Strategies for Sole Traders
Being a sole trader can be a difficult and time-consuming enterprise. You are the owner and manager of the business and you are legally responsible for all aspects of the business.
That said, you also have the ability to thrive and grow rapidly with this business structure as you have full control over your business decisions and assets. It’s no wonder that sole-traders are the fastest growing business category in Australia, with 1.2 million sole-trader businesses in June 2016.
Growing your sole trader business is difficult without a business growth plan, so we have compiled a list of ideas to take into consideration when you are deciding how to grow your business into a more profitable and successful enterprise.
Take on an Apprentice or Junior Staff
This is not an appropriate strategy for every industry and you will need to decide whether it is right for you. However, for those who are eligible to take on an apprentice, it can be both a rewarding and beneficial experience.
Apprenticeships are often more flexible that employment as you are able negotiate the location, timing and nature of the training to suit your business needs. They are also less expensive than an employee and the Australian government offers incentive payments to employers of apprentices.
This strategy would mean that you do have to put in time to train and mentor your apprentice, but in the long run you will be able to boost your productivity with their help and slowly take on more work. This will increase your growth and ability to hire employees.
Employing someone is more suitable to some businesses than taking on an apprentice. It is possible to be a sole trader and have employees, and your tax obligations towards them are the same as if you were a company.
Employing someone can be a big step, as you have to learn to trust someone to help you with your work. However, having employees allows you to boost productivity and focus your attention on your business growth plan.
If you are still not ready to employ any staff, or do not want to manage all the responsibilities that comes along with that, then you can still reduce your workload and boost your productivity by outsourcing. Letting an accountant submit your tax obligations is a good example where you can save a lot of time and stress by outsourcing that part of the business to someone else.
These days, even the smallest businesses can get access to highly skilled, affordable freelancers and consultants to help with extra work.
Manage your Finances
In addition to having an accountant manage your tax statements, it is important that you take the time to stay on top of your finances.
If you do not know exactly how much money you are spending compared to what you are earning, you will likely underestimate your expenses. Using cash flow management software makes it easy to understand your business position and set budgets accordingly. You can also manage all your invoices and generate all the reports that your accountant needs at tax time. Keeping track of your finances can mean the difference between your business growing and being successful and running out of money.
Embrace Social Media for Business
Aside from word-of-mouth recommendations, having an active and engaging social media presence is the best free advertising you can have.
You will connect with new customers who will then have access to information about your skills and also your contact details. Your existing customers will also be able to leave reviews, which will capture the attention of potential future customers as being an authentic and trustworthy recommendation of your business.
We know you are busy, and it can be difficult to stop and spend time reflecting on how your business is going. This is important as you might realise that you are heading in a direction that you had not anticipated, or your business is weak in an area that you hoped to be strong. You should also take the time to reflect on what has gone wrong in the past, and what you can do to stop that from happening in the future.
One of the best ways to keep track of the information that allows you to reflect on your business performance is with the right record keeping system. Learn how our cloud accounting software can help your growing business.