It’s a question clients often ask so we have put this case study together to highlight some key points.
Ben is a carpenter who has been an employee of a building group for nearly 8 years. His vision is to set up his own business and he approached us to arrange finance for the purchase of some high end wood working machinery for his workshop together with a new ute.
Ben is married with a young family and a mortgage. In the last few years Ben has done a couple of private jobs in his own time, but did not have enough independent work to give up his full-time job and pursue his own business. His salary was critical to his family’s financial needs to service his debts.
How We Helped
We worked with Ben and an asset finance specialist to structure a finance package for the machinery and vehicle to produce the best possible tax and cash flow outcome and in this instance we arranged the finance under a Chattel Mortgage.
Most importantly, to obtain the finance it was essential that Ben keep his full time salaried position until the finance was in place. He resigned within days of the finance being approved and officially started his own business.
Ben set up a new workshop and with the right equipment and his high quality workmanship, he quickly earned a good reputation and is getting plenty of referrals and work. He has recently relocated the workshop from home to a commercial premises and his business is thriving.
Have a Plan - Think through the stages of getting your business up and running and generating income. Discuss with us the right business structure and prepare a cash flow budget.
Do Your Research - Get advice regarding business structures, GST registrations, accounting software, licensing and insurances. Be specific about what the equipment or vehicles business needs and how the assets will be acquired. How much do you need to spend? What can you realistically afford?
Invest In Your Own Success – If required, be prepared to contribute some of your own funds towards the purchase of business assets.
If possible, don’t resign from your job until you have finance in place. The value of a secure and regular income is often under estimated by small business owners. Use your existing income to support the finance commitment.
Click HERE to download the full edition of The Business Accelerator Magazine for December 2016.