Ryan McLean : Slightly Unconventional

#23 Scalable Workforce and Tax Talk – Thurs 16th July 2015

iniartworksmallHey guys!

Ryan here from Instructions Not Included and today I just want to talk quickly about 2 things that I am thinking about in my business at the moment.
One is tax because I have been doing my tax return for the year. And the other is your workforce and having a workforce that can scale up and down as you needed, which is something that I am having an issue with at the moment but having a little bit of difficulty with.
So first thing is tax. In terms of my business, looking at the last year, I earned around about $60,000 in gross revenue for the year. And then when you look at all of the expenses that I can claim for that, I can claim around like $30,000 -ish, and then I had a loss from last year as well that I can bring forward and claim as well.

And so in terms of the taxable income for my business over the course of the year, it is only somewhere around $23,000, which is not significant.

So if you are thinking I am following this guy, he is making hundreds of thousands of dollars, you are not. But something that is important to know is that some of those expenses, portions of them, are things that I used to have to pay with my personal income and I can now pay with my business income.

Like the internet for example, I can claim portions of that; my phone which I use predominantly for business, I can claim portions of that; electricity, rent, I can claim percentages of these sort of stuff as well as I am a tech guy so I love buying tech stuff.

When I buy tech stuff, I can claim that sort of stuff against my taxable income which means I am paying less tax than I would if I had to earn the money and then buy the stuff with the post-tax income. So something to give me mind that yes my income appears extremely low but in terms of the things that I can buy with that, it is not as bad as it looks.
Moving forward into this financial year, I am hoping to make more than that.

Today I was looking at GST, do I claim GST? I have been looking online, reading all the sites and if you guys are listening from the outside of Australia, GST is this business tax that you have to charge if you think you are going to earn over $75,000 in the year of gross income excluding GST, well then you need to register for GST. If you are not going to earn over that then you do not need to register for GST. Things are so much simpler if you do not register for GST. And also I have the issue – they have this thing in Australia where you charge GST but then you can claim it back on your expenses but I have a problem where all of my income is Australian income, selling to Australians where I would need to charge GST.

And then all of my expenses are generally US expenses because I am doing it from US companies. So if I were to register for GST, not only would it be an administrative nightmare for me but it would also mean that I would be paying a lot more tax than I am paying at the moment.

I am not trying to avoid tax or anything like that but I just want to approach it and do it right but do it in the easiest way possible. And through the forms and the Cronula tax advisers, I am not saying anyone should do this, I am not saying this is right but I do believe I am doing the right thing.

If you believe that in the next twelve months that you are going to earn over $75,000 then you need to register for GST and the way most people track that is that they look at their monthly income. At the moment my monthly income is not tracking to be over $75,000.

Now I am hoping to grow my business so that my gross revenue will exceed $75,000 but at the moment it is not. And one of the cool things is that once you reach that threshold then you have 21 days to register for GST and so I can go on my way there at the moment because it is not looking like I am going to break that $75,000 but when things change, my income goes up dramatically month by month or if I end up going over that $75,000 towards the end of the year, well then I can register for GST and I do not have to backdate at all and I can start doing it on from there.
So that is the kind of stuff I am working at at the moment.

If you have an online business in Australia and you think you may have GST and stuff like that, definitely see an accountant. But for me, I have made the decision that I will register for GST when I can safely say that Yes, I am going to earn more than $75,000 of non-GST gross income. That is all a bit of technical stuff. That is what I am looking at and I am hoping that I will break that $75,000 and I have to register for GST, a good problem to have, but at the moment I am not 100% sure so I am just staying as I am.

And the other thing, I have been reading this book while listening to this audio book called Exponential Organizations. And they talk about different elements that organizations have when they are growing exponentially and they become these really fast-growth organizations.

And one of the things that they talked about is being able to have workers who you can add them on when you need them but when you do not need them, you do not have them.

They give examples like Uber, how Uber drivers are all contractors. And so when there is work there, the drivers get work but when there is no work, the drivers do not get work. But they tend to scale that up and down as there is work and they do not have to have all these employees on staff and manage that.

And I have noticed as I have stepped away from the business a bit more to spend more time with family as I go on holidays and stuff, I do get in the situation where I have more work than my virtual assistant has to do. I have tasks – long-term tasks that I can tinker away on but I kind of get a bit stressed about it.

I get a bit stressed about this work and my virtual assistant who I really value, them not having work to do. It is something that I am finding hard to manage.

I do not know what I am going to do because I definitely do not want to lose my virtual assistant and I do not want to cut her hours. But I am glad that I have extended them because I would hate for her to be working for a full week for me and not have work to do for 2 or 3 days out of that week.

I think I am a big fan of understaffing. When you need extra staff then you go out and hire people just for tasks. I am so glad I have that baseline virtual assistant that I can work with and I can do my regular tasks. And so I think I will leave her there and hopefully as my business gets more and more automated, she will get enough work to cover her hours. And as she does not have enough time in the week to do the work that I need her to do well then maybe I can outsource and go out there and get other workers just to fill in the gaps.

I guess what I am trying to say is at the moment I do not think I have enough work for my virtual assistant every single week, some weeks I do, some weeks I do not. And I am feeling that pressure on me that I do not actually have enough work to give her. So moving forward, I just need to keep that in my mind not to overcommit to the staff that I hire because I want to treat them well.

I want them to have engaging work to do and I do not want to be stressed about having too many staff and no work for them especially because it all hinges on me and the content that I create. When I create content that creates a lot of work but when I do not create content and I am doing things like my tax then there is no work for my virtual assistant.

I do not know why I am telling you guys all these stuff but that is just where I am at today. And hopefully tomorrow I will be creating some content and getting some content out there so then they will have a lot of work to do and I will be moving things forward. But I am pretty happy with the way my business is going. There are still a lot of work to do and a lot of things to envision but I am really passionate about where things are going and I will talk in the future episodes sometime.

I have been thinking around this idea of how can I get 10 extra results in the same time that I do now or in one-tenth (1/10) of the time that I do now. So how can I create more output with less time. So that is something that I am thinking of and once I come up with some answers I will probably tell you guys about it.

So that is it for today. Signing off now. If you guys want instructions, go and buy some furniture.

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