Whether you’re a fresh-faced apprentice or a seasoned worksite regular, almost every tradie looking to bring home the big bucks will have to ask themselves one question: “Should I go out on my own?”
It’s no easy choice to make, and with the move to become a subcontractor or dive headfirst into running your own business bringing with it its fair share of financial risk, leaping into self-employment can be just as nerve-wracking as it is exciting – especially if you don’t know where to start.
But for those of you who are ready to take into the bustling tradie marketplace to secure financial freedom, let’s break down the essential steps to get started, and what to think about next.
Is becoming a self-employed tradie right for you?
Before making any moves, ask yourself: Can I handle the financial ups and downs? Because, let’s be honest, work might not come in immediately, and you’ll need a bit of a financial cushion to stay afloat.
But hey, since you’re here reading this guide, you’re probably already halfway down the path to starting your own business—congrats!
The road ahead can get a little technical, but here’s a quick-and-dirty version to get you going:
- Register an ABN as a sole trader.
- Check if your trade needs a licence (more on that in a bit).
- Get public liability insurance (you’ll thank us later).
- Start working!
That’s it in a nutshell. Of course, there are details to iron out, but these are the core steps for any tradie itching to get their business up and running.
Do you need a licence?
Here’s where it gets tricky. Not all trades in Australia require a licence, and the rules change from state to state (annoying, we know). Your first task is to figure out what licences you need—if any.
A word of advice: Don’t assume! Some tradies jump in, get insurance, and set up shop, only to find out they didn’t meet the licensing requirements. Oops! For example, electricians in Queensland need a specific contractor licence, which many overlook.
Not sure where to start? The Australian Business Licence and Information Service website lets you check what licences you need by trade and location. It’s a bit clunky, but it’ll get the job done. You can also check with your state’s building authority:
- Queensland Building and Construction Commission (QBCC)
- NSW Fair Trading
- Victorian Building Authority
…And others! (just look up your state)
Another handy tip: Chat with other tradies in your field. They’ll give you the lowdown on what licences they needed. Just don’t rely on their word alone—always double-check!
Business structures: Sole trader vs Company
When you’re just starting out, keeping it simple is the way to go, and that usually means setting up as a sole trader. It’s fast, cheap, and easy. Here’s how you do it:
- Step 1: Apply for an ABN (it’s free!).
- Step 2: If you’re not using your own name, register a business name (only about $30/year).
- Step 3: Boom—you’re done!
Starting as a sole trader means fewer headaches, and you can always level up to a company structure later if your business grows. Pro tip: If your annual revenue will exceed $75,000, you’ll need to register for GST, which means submitting Business Activity Statements (BAS) to the ATO every quarter (Yes, that does mean more paperwork).
If you’re thinking of operating as a company (with that fancy “Pty Ltd” at the end of your name), chat with an accountant to figure out what’s best for you.
Insurance: Don’t skimp on protection!
Going solo as a tradie comes with big responsibilities. You’re now accountable for all your work—and that includes any accidents. Imagine if your work causes serious injury (or worse), and you’re suddenly staring at millions in damages. Yikes!
That’s why public liability insurance is your best friend. It’ll protect your assets (like your home) if something goes wrong.
Plus, you’ll want to insure your tools, vehicle, and anything else you use for work. And don’t forget: as a self-employed tradie, you no longer have sick leave or workers’ compensation.
Personal accident insurance is essential to keep the income flowing if you’re injured and can’t work. Trust us, you don’t want to DIY your business insurance!
Build your brand
Now for the fun stuff—branding and marketing your business! If you’re subcontracting for builders you already know, you can probably skip this part. But if you’re looking to get clients directly, especially if you’re an electrician or plumber, this is where you need to put in some effort.
Here’s a quick checklist:
- Pick a unique business name and register it.
- Snag a matching domain name.
- Get a logo designed.
- Print some business cards and letterhead.
- Build a simple website.
- Set up a Facebook page for your business.
A cool option for branding is wrapping your work ute or van with your logo and contact info. It’s like having a mobile billboard! It’s not cheap, but it’ll turn heads wherever you go.
Keep your accounts in check
When you’re starting out, accounting might not be at the top of your mind, but it’s key to staying organised.
A lot of tradies begin with Excel to track payments (or worse, use nothing at all!). But if you’re serious about growing your business, a cloud-based system like Xero will make life so much easier.
Consider finding an accountant early on—they can help set up your accounting system and advise on business structures, so you’re not stressing about taxes later.
Growing your team
By now, you’ve got your licences, business structure, and insurance sorted. Next question: Do you want to stay solo, or build a team?
There’s a big push out there for tradies to ‘get off the tools’ and hire others to do the physical work while they focus on business growth. If that’s your goal, you’ll need to take on some risks to reap the rewards.
On the flip side, many tradies prefer to keep things simple: just them, their tools, and a trusty van. It’s less stressful, and you don’t have to worry about managing wages. There’s no right or wrong—just figure out what you want for your business.
