starting a company basic advice? (carpentry apprentice sign off)

[Sigh RolleyEyes]

Would anyone be able to offer some general advice/ball park figures relating to issues and costs setting up/maintaining a small company? I've got an appointment with an accountant for next week but i reckon it's often good to seek broad input

i'm a carpentry apprentice about to get signed off. I'll be sticking with my current employer but instead of becoming a sole-trader (not that i understand how that works either) my boss is insisting that all his guys set up their own companies.

what will i need/should i think about for a small company (effectively it's just me -- though it would be good to have the option to employ labourers and be covered if they get hurt)

would anyone have a ballpark figure or formula for how wages with benefits (my current situation) translates to an hourly rate subcontracting as a company (no benefits or super)?

any and all advice much appreciated

 

[Simon_Nesbit]

This stuff is years old, but would be close to the mark. I've been in a siimilar position (changed from employee to subcontractor) but did it all myself - it's really not that hard, but not worth the time unless you really can't spare the money.

You can get an "off the shelf" company for a few hundred - name registration, legal setup, starting accounts, etc.

A good bookkeeping/accounting package (computer software) can cost heaps, but even the most basic ones (<$100) will do 99% of anything you could need anyway.

You will need to cover your own insurances (indemnity, worksite, liability, etc), and also memberships (master builders association, etc).

Super is generally 9% IIRC on top of your base salary.

As a subcontractor, you may have guaranteed hours, or you might not - if there is no guarantee of hours, there's generally a loading (10-20% maybe dependent on industry) on top again.

All your tools will need to be purchased/lease (may allready be the case anyway).

etc

Basically work out everything you get from a job now (as employee), plus super, less your expenses. That's your starting figure.

Then look at all your additional costs (insurance, tools, marketing?, financials, etc, etc). How much do you need to add?

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For something really simple, start with your current wage, add 20% and that's possibly ballpark.

If you're salaried (50 week year, 2 week paid leave) take your annual salary, divide by 2000 (50 weeks x 40 hours) and times by 120% (1.2) to get your new minimum hourly rate.

 

[Sigh RolleyEyes]

Thanks for that info. Much appreciated