#25 The Hidden Pitfalls of Growth: Changing Business Structures

You might have reached a point in your business where it’s time to think about a new business structure. If that’s you – amazing! What I run through today is what happens after you make this decision, so that you can avoid the common pitfalls that can come with this changeover. This knowledge will ensure you go through this big change the right way and can make a huge difference to your financial growth and profitability.

First of all, I run through the all-important topic of withdrawing money. The ways you can do this are really different between sole trader and company. I explain what you need to be aware of, and how you access money from your business under a new structure like a company or trust.

The next pitfall I take you through is software. What you really need to know is that it’s not as simple as just updating your new ABN in your Xero, MYOB or Quickbooks file. This can create a giant mess. I explain how to keep the split clean and tidy.

Thirdly – new bank accounts. Even if you had separate bank accounts as a sole trader, you still need to set up a new suite of bank accounts. I run through the reasons why you need to do this, and why this step is non-negotiable.

The next big admin job when changing structure is the client-facing end. Everything you do with your clients needs to be updated. This includes your website, invoices, legal documents and engagement documents or client agreements.

My biggest tip to you is, if you haven’t already started your business, get advice on the best structure before you start out. Sometimes it’s a great idea to start out from the get-go as a company.

If you are already a sole trader and have grown to the point where it’s time to make the switch, don’t be afraid of it. If you plan ahead, you’ll be organised and confident and you’ll know what to do.

Lastly, you really need a tax agent’s help on this. Your business is unique so the best thing you can do is to surround yourself with the right professionals to guide you and grow your business.

LINKS MENTIONED:

Blog post: Wages & Payroll Ain’t That Easy

Blog post: Switching To A Company? Update Your Accounting Software!

PREVIOUS EPISODES MENTIONED:

Ep 13 – Payroll Mistakes That Could Land You In Hot Water

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Connect with Lisa Turner:

Instagram: @accountedforyou
Website: https://accountedforyou.com.au/