Thinking about starting your own trade business? Good. It's one of the best moves you can make! But, it stands or falls on the money side, not just the tools side.

Plenty of tradies are brilliant on the job and get caught out by the business side of the business. Here's what to sort before you get started.

1. Work out what it costs to start

Before you start, get an idea on what it takes to get moving:

• Tools and equipment (or finance for them)
• A vehicle, and how to fund it
• Insurance, public liability, and workers' comp
• Licensing, registration, and any trade association fees
• A basic website, phone number, and Google Business Profile
• Software for quoting, invoicing, and job tracking
• Set up your banking and connect it to an accounting system (or get your bookkeeper to do this)

Add it the costs. Many tradies underestimate what it costs to get up and running.

2. Choose a business structure, and get advice on it

Sole trader, partnership, or company are the three common options in Australia. Sole trader is the simplest to set up, but you're personally on the hook for the business's debts. A company separates you from the business legally, but comes with a bit more paperwork and cost.

An accountant can walk you through the tax and liability implications for your situation in one conversation, worth the fee.

3. Get registered properly

Before you can legally trade, you'll need:

• An ABN (and TFN if you don't already have one)
• Your business name registered
• Company registration, if that's the structure you've chosen
• Any trade licences specific to your industry and state

An accountant can help set this up for you, also worth the fee. For trade licences specifically, the Australian Business Licence and Information Service (ABLIS) is a good starting point, it covers licensing requirements by trade and by state or territory in one place.

4. Get the right insurance in place

Some of this is mandatory, workers' comp if you employ anyone. Some of it just makes sense:

• Public liability insurance
• Vehicle insurance
• Income protection
• Business interruption cover

One bad incident without the right cover can undo years of work. It's a sensible payment for peace of mind.

5. Set up simple systems from day one

You don't need anything fancy. You do need:

• A way to quote consistently (so you're not guessing job to job)
• A way to invoice and chase payment without it depending on memory
• Basic bookkeeping, even a simple spreadsheet beats a shoebox of receipts
• A separate business bank account, from day one

Good systems now save a painful cleanup later, usually right around tax time.

6. Build a cash flow plan  

This is the step that trips up many new business owners. Revenue and cash flow are not the same thing.

You might land $30,000 worth of jobs in your first month and not see a cent of it for six weeks. Meanwhile, wages, fuel, and materials need paying now. Map out:

• When money is likely to come in (based on your payment terms)
• When money has to go out (wages, rent, insurance, loan repayments)
• The gap between the two, and how you'll cover it

This gap is exactly where many new trade businesses get squeezed. It's not a sign you're doing something wrong. It's just how trade cash flows works.

7. Decide how you'll fund the gaps

Once you can see the gap, you need a plan for it. Broadly, there are a few options:

Savings: good if you have them, but they run out

A credit card: flexible but can be expensive if you carry a balance, and typically have lower limits that what you might need to fund cash shortfalls in the business.

A line of credit: draw what you need, repay when the invoice lands, and use it again, built for exactly this kind of gap

Having a source of finance sorted before you need it puts you in a much stronger position than trying to arrange something the week you're short.

8. Put a light marketing plan together

You don't need a full strategy, just the basics:

• A clean, simple website
• A Google Business Profile, kept up to date
• A habit of asking happy customers for a review
• A consistent way of showing your work, social media, before/afters, whatever suits you

Word of mouth still does a lot of the heavy lifting in the trades. These basics will help your message travel further.

The bottom line

Starting a trade business is one of the best moves you can make, but the businesses that make it past the first tough year are usually the ones that treated the financial planning with the same seriousness as the trade skills.

Get the cash flow gap mapped out, and get a flexible source of finance in place before you need it, not after.

Laddr is a flexible line of credit built for eligible Reece Trade Customers, with no setup or ongoing fees. Draw what you need, repay when the invoice lands.

See if you're eligible for a Laddr line of credit in minutes → apply.laddr.com.au/start