Starting a small construction business?

rightyabe

basically I just want to start up a small construction business. Is it just a matter of getting a ABN and registering a company name?

I'll also be getting my PR in the coming months and I'm on a 457 now. I'll still be employed full time by my employer and just do my own work on the evenings and weekends. Is this allowed while on a 187 visa as I know it's illegal on a 457.

Also is there any tax breaks for start up companies etc?

Thanks

AngryHippie

For starting the business, it is just ABN and registering the company name.

If you are anticipating a turnover greater than $70k per annum, you will also have to register for GST.

You will have to allow to do BAS (Business Activity Statements) generally quarterly for the ATO.

You will need a building license for the class of construction work you intend to do (Basing it off what I know from QLD/NSW)https://www.commerce.wa.gov.au/building-commission/builders-0 will have more information on that.

You will then need to sort out your insurances (Public liability, Product and Contracts and Professional Indemnity if required)

That should be enough to get the ball rolling.

Many of the building licenses require that you have completed a small business management modules from CERT III in Building and construction before they will issue a license(as is the casse. Research this thoroughly before you commit to it, otherwise it may take extra months to get it all approved.

I think the limit before you need to be licensed in WA is $20k, where it is $3.3k in QLD and $5k in NSW and VIC and there is no lower limit in SA, all building work requires a license.

The fines for not having one are upwards of $10k, so its a no-brainer to get one. You also have less legal protection without one, for instance:
there is also a caveat that you are not entitled to use the Building and Construction Industry Payments Act in QLD to claim payment if you are not licensed, so you could do a building job and may only be entitled to get paid for the materials in the heel of the scuttle, and you would have to pursue the rest of the money under the consumers act rather than the BCIPA, which is far more expensive and will require expert adjudication at cost, rather than provided free of charge as per the BCIPA.

If you search your relevant state and building license, it will tell you everything you need to know, but I would cost it all out. It could be a risky time to get into it, as there is a very real chance interest rates are about to get kicked up soon (Bloomberg article on Bank Bonds yesterday) in which case states that are already slowing may grind to a building halt. Then you will face carrying all that overhead while having to buy work to keep trading.

Do some serious feasibility planning first, best and worst case scenarios.

Best of luck with it. Feel free to PM if there is anything I might be able to help with.

rightyabe

Great post thanks a million. I'm in WA and I'll just be doing concrete driveways mainly, exposed agg etc. I'd have a former boss who has loads of work all the time so I'd be subbing his work most of the time and pick up my own along the way.

I'd also be doing work for another contractor who does all council work like footpaths, pram ramps etc. I'd like to be able to be in a position to tender for this work from other councils in the city on my own but I'd probably have to be in the game a few years and have all above board before I could tender.

AngryHippie

rightyabe wrote: »

Great post thanks a million. I'm in WA and I'll just be doing concrete driveways mainly, exposed agg etc. I'd have a former boss who has loads of work all the time so I'd be subbing his work most of the time and pick up my own along the way.

I'd also be doing work for another contractor who does all council work like footpaths, pram ramps etc. I'd like to be able to be in a position to tender for this work from other councils in the city on my own but I'd probably have to be in the game a few years and have all above board before I could tender.

Good plan.

You could probably sneak under the $20k limit (per contract) for the first year or two.

Definitely register for GST

Once you start tendering for council work you will need to have a management system that has accreditation to ISO 9001(Quality), 14001(Environmental) and ASNZS 4801 (Work Health and Safety) in order to get through their various stages of vetting and pre-selection. I'm not sure how stuck into this the Local Governments in WA have gotten, but in QLD and NSW it is a must.
It's a big overhead to carry, so If I were you, it would be an investment in year three or four of a five year plan.
There are a number of other pre-requisites that apply here in QLD before you can tender LG work, but you are a long way from hitting that point.

rightyabe

Yeah I'll just concentrate on getting it started up and see how things go. About the management system you mentioned. How many people does this have to be? Could 1 person cover it all?

Is it possible to start the process of registering now while still on bridging visa waiting on PR, can I even get a ABN now?

Anyone know what kind of bank loans or tax breaks are available for small businesses?

rightyabe

Yeah I'll just concentrate on getting it started up and see how things go. About the management system you mentioned. How many people does this have to be? Could 1 person cover it all?

Is it possible to start the process of registering now while still on bridging visa waiting on PR, can I even get a ABN now?

Anyone know what kind of bank loans or tax breaks are available for small businesses?

AngryHippie

rightyabe wrote: »

Yeah I'll just concentrate on getting it started up and see how things go. About the management system you mentioned. How many people does this have to be? Could 1 person cover it all?

Is it possible to start the process of registering now while still on bridging visa waiting on PR, can I even get a ABN now?

Anyone know what kind of bank loans or tax breaks are available for small businesses?

I'm pretty sure you can get the ABN now. I got one while on a whv.
I wouldn't expect much in the way of tax breaks. If you don't have an accountant, get one. (It makes sense over here, even for personal income tax returns on a group cert, the fees can be deducted off next years return, so you only pay once...ever.)
It is possible from an accounting point of view to balance things quite well as a sole trader (Which will be your starting point) for writing things off against your tax bill. You will need a good understanding of your tax liabilities and be able to sequester money to meet that bill.
The ATO are going to be your number 1 creditor. If you don't pay them, you are screwed. That is where most small companies and sole traders fall over and end up losing the lot. They forget to keep money for the tax man, spend it on Ford F trucks, Jet-skis and Dirt bikes, then they get the ATO bill and have to sell the whole shebang to pay the tax man.

Get a good accountant, they will be able to guide you through most of it. Forget about the IMS stuff and ISO accreditation until the business has survived year two and is viable, with a good work flow. Moving to that level is basically when you are at the stage that you want to be off the tools 100% of the time and managing a company.

One person can run a management system for ISO accreditation easily enough, it may cost $10k to $15k to create one from scratch, but it will also cost approx $7,500 to $10k per year to have it audited and accredited to the relevant standards (9001, 14001, 4801 - being replaced by 45001) and they are all due to be updated in October this year anyway.
Just keep them in mind as a future opportunity if you are going to get really serious and go hard for LG or federal projects (Or take on work as a subby for Tier 1/ Tier 2 companies)

Tricky time to go in hard for bank loans for small business, interest rates can only go up, you will probably represent a risky proposition for the bank unless you have a good pipeline of work and a solid business plan to present. How much do you think you will need for kick off ?

rightyabe

Hey just trying to start this now. I'm guessing getting a ACN would be better for me?

Also the name is a group as in "paddywhack group" can I register other companies on a ABN such as paddywhack civil and paddywhack concrete etc. Would these companies come under the same ACN but with different ABNs?

Cheers.