Bingo! You’ve just had your best ever month in sales, well done!! Time to crack open your beverage of choice, do a little happy dance and celebrate (because we need to celebrate those wins xx).
Hang on though….your business has been growing steadily each and every month, which is awesome, but each of those months are adding up to more and more sales which means….you need to think about registering for GST. Bugger.
In Australia, businesses are required to register for GST when their annual turnover has reached (or is going to reach) the GST threshold - which is $75,000 in a 12mth period*
I know that the last thing you want to do is give a little slice of those hard-earned sales to the government. Likely, you feel like you need each and every dollar that’s coming in to help you with all the expenses that are going out.
But you know what? For small business, reaching this threshold is actually a good thing….and here’s why.
1. It's a reason to celebrate!
Your business is now pulling in (or heading towards) revenue of at least $75K a year!! What an achievement! Switch your mindset about having to register for GST, to one of getting to. Getting your business to the stage where you’re making enough sales in a year to reach the GST threshold means you must be doing something right, your business has proof of concept plus the potential to move on to bigger and better things.
2. Money back in your pocket
When you register for GST you will get to claim back GST paid on all your GST-inclusive purchases. This means money back in your pocket, rather than forking out that extra 10% for goods and services.
3. New opportunities
Having a GST registered business may open the door to new opportunities for your business, for example your eligibility for government grants. While it’s true you’ll now be contributing to the government coffers, by being registered for GST you may also become eligible for some of the business grants available for small business. Usually GST registration is a prerequisite for application for these grants.
4. Streamlined systems & reporting
Now is the perfect time for you to get your finances sorted and begin to add value to your business. When you're registered for GST it’s a requirement to lodge a Business Activity Statement and keep certain records. This can be quite tricky if you don’t have adequate bookkeeping systems in place. What a fantastic time to get serious about your business and set-up these systems, to not only help with those legislative requirements, but you’ll save time and money at tax-time, plus have the information you need to help you make smarter financial decisions into the future.
5. Reap those rewards
With a growing revenue stream, you really should have a business that’s generating a positive cash flow. If you find that you're making all these sales yet have little money in the bank, take a rain check and assess where your business is at. Being in business should mean that not only do you have enough money to pay your expenses, but you should receive compensation for both working IN your business, and be rewarded for OWNING your business.
So instead of shrinking back at the idea of GST registration, embrace this next stage of your business, see it as a positive step and a reward for your hard work to date, and know that it now opens the doors for greater things.
Want to know more about how I can help you reap those rewards and have your business pay you what you deserve? Reach out and book a 15min discovery call and we can have a quick chat xx