Running a sole trader business – the ultimate guide

Getting set up as a sole trader is fairly simple. Open a bank account, sort things out with the tax department, and you’re off. But then comes the part where you have to start running the business.

And yeah … there’s a bit more to it than that. Here’s what you need to know.  

Get clear on what you want 

You’re a sole trader, but like, why? Maybe you see it as a way of making more money, having more free time or turning a passion into a career. For lots of entrepreneurs, the big ‘why’ is freedom and independence – they don’t want to be tied to someone else’s schedule and rules any more. 

When you’re honest and clear with yourself about your reasons, every decision becomes easier. Does taking on that project support your goal of playing golf on Fridays? Will adding that service or product get you closer to buying the Maserati? Should you pay someone to do your books so you can get back to decorating cakes?  

Here’s how to nail down your ‘why’ 

• Write a list of things that are awesome about being a sole trader. 
• Put them in order. Which one goes at the top?
• Test out the negative — if in five years you hadn’t achieved that top-ranking reason, how would you feel?   

Get your money sorted  

As an employee, the money side of things was simple. Each paycheck landed in your bank account automatically, with all the tax and other deductions, well, already deducted.

Your sole trader gig is a whole lot more hands-on. If you don’t invoice your clients, you don’t get paid. If you don’t save for your taxes, you get those snippy letters from ATO or IR.  

Tips: 

• Sign up for financial software designed for sole traders, like Solo by MYOB. It makes invoicing easy and even lets you take payments on the spot. Plus, you can use the app to photograph receipts whenever you buy something for the business. It’ll save you money on tax and keep the bean counters happy.  
• Make a time to do the money stuff once a week so you don’t get behind. 
• Every time you get paid, pop a portion of it into a separate bank account to save for tax.  

Think about growth  

Growing your sole trader business isn’t just about bringing in enough work or sales to meet your goals. To you, it might mean putting up prices, being picky about projects, or passing on work to contractors.  

You’ll find that ‘growing’ isn’t something you can ever stop doing – your competitors won’t! You’ll need to hustle to get and keep your customers with good marketing, relationships and service.  

Tips: 

• Read more on how to grow your sole trader business. <link> 
• Get comfortable with self-promotion — your reputation is your strongest marketing asset.  
• Work to strengthen relationships with customers and industry peers.  

Get some business buds 

You might love making the calls and being your own boss, but all that freedom can get pretty lonely. ‘Sole trader’ — it’s right there in the name.

There’s no-one to yarn with at coffee breaks, no one sending you memes and no one to bounce ideas off. That can sometimes make you feel isolated and a bit stuck. Connect with other entrepreneurs to find vent-friendly ears, sound advice and people who understand your pain.

Tips:  

• Join a professional organisation to get invites to networking events. 
• Get active on social media and reconnect with old friends and acquaintances. You never know who you might find.  
• Budget time and money to invest in your new friendships. It’ll become the best part of your week. 

Take care of yourself  

No breaks, no holidays, long, long hours — you wouldn’t put up with it from an employer, but sole traders can be their own worst-ever boss. The thing is, without you, there is no business. You need to protect your health, your energy and your motivation.

So, set some ground rules about when and where you’ll work. Some entrepreneurs like to lock in a work day or set maximum weekly hours. Don’t make the mistake of grinding through every weekend and holiday either — put your out-of-office message on and shut your computer. You can either take breaks, or your body will make you! 

Tips:  

• Find ways to enforce breaks. Do you need to walk the dog at the same time every day? Can you install software that will shut down your computer at regular intervals? 
• Book holidays in a different city or country. It’ll feel easier to switch out of work mode. 
• Make some spaces work-free zones so you can properly switch off. 

Celebrate wins  

You know who’s always employee of the month? You!

Celebrate your hard work and reward yourself for a job well done. Did you finish that big project or have an exceptional billing month? Time for a nice meal out, a new pair of shoes or a day on the green — whatever feels like a treat. 

Tips:  

• Figure out what feels motivating — a bottle of bubbles with friends? A new tennis racket? Decide on your reward and how you’ll need to earn it. 
• Don’t reward yourself with business essentials — you need a working mobile and lunch breaks to do your job. You shouldn’t have to earn them. 
• Plan how you’ll celebrate mini wins — will you dip into the box of Favourites, grab a café flat white or call in for a 15-minute shoulder massage? 

Learn to say no  

Everything you say ‘yes’ to means you have to say ‘no’ to something else.

Ask yourself — is it worth that sacrifice? It all goes back to your goals. If you’re in business because you love playing music, think hard before agreeing to run the soundboard at a concert. You could do it, but will it mean you miss out on other, more satisfying work?

If your ‘why’ is about having more time with your kids, is the money from that extra contract worth it? Also, check in with your values — you’re not doing yourself or your client any favours by taking on work that goes against what you care about.  

Tips:  

• Build a network of industry peers — that way, you can pass on any work you don’t want. Clients and peers will both love you for it.  
• List any deal-breaker conditions ahead of time.  
• Don’t accept any offer right away — always ask for time to consider.  

Automate, automate, automate 

When time is, quite literally, money, the less admin you do, the better. That’s where technology is your friend. Look for every opportunity to set and forget any task that isn’t making you happy or bringing in money.  

Tips:  

• Start tracking your time — it’ll be easy to spot those value-less tasks. 
• Invest in great software. It can help you automate everything from money management to scheduling meetings. 
• Turn emails into templates you can send again and again. 

Freedom, growth and living your ‘why’  

Once you taste the freedom of sole trader life, you won’t want to go back. And the extra good news? The things that make a good business owner are things you want to do anyway. We’re talking about celebrating the wins, having a drink with business friends, taking holidays, and doing less of what you don’t like.

The way to make that happen is with tools like Solo by MYOB — minimise time spent on admin so you can get back to living your ‘why’.

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Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.