In this module the presenter walks fitness‑business owners through the essential legal and financial foundations needed for a sustainable operation. He begins with a blunt reminder that tax is unavoidable, illustrating the impact of tax on cash flow and loan eligibility through his own experience of investing personal savings into a studio. He stresses the necessity of hiring a competent accountant—one who is realistic rather than overly optimistic—and explains that the accountant’s role evolves as the business grows. The talk then shifts to Australian business structures, distinguishing between ABN (sole trader) and ACN (company) registrations, and outlines when a Pty Ltd may be preferable based on revenue and liability considerations. Employer obligations such as superannuation, GST registration thresholds, and payroll tax are highlighted for those hiring staff. Practical bookkeeping advice follows: using a dedicated business credit card, paying it off daily, and leveraging reward points to offset fees, thereby keeping expenses organized for easy reporting to the accountant. Throughout, the speaker interweaves personal anecdotes to illustrate each point, but the core message is a checklist of legal and financial steps that any fitness entrepreneur should address before seeking professional legal counsel.
Chapters
Alright, Module 5: Understanding Sound Business Structures and Legal Responsibilities. So let's start with the legal responsibilities part. Okay, so tax, you're going to need to pay it if you want to be successful, if you want to be long-term. Now I remember sitting down with my accountant many years ago and he gave me kind of an analogy, a rude awakening, because I was flabbergasted at how much tax I had to pay. And he said, Mark, the tax system works like this. I'll give you $100, but for that $100, you got to give me $30 back. And if you say, well, I don't want to give you $30 back, I'll say, well, I'm not going to give you $100. So not a perfect analogy because the government is exactly giving you $100 when you're a business, but needless apt. The fact is you are going to need to pay tax regardless of what country you are in. Maybe Saudi Arabia and Dubai, you, you, there are some different laws there, but for most of the Western world, there are tax laws, and tax evasion is not something you want to get yourself caught up with. And also, if you are wanting to build a sustainable and have wealth in your life, you are going to need to show your earnings, right? If you want to get a loan, get a business loan, buy a house one day, you're gonna need to show your earnings. Now in business, I can say firsthand, when I started Enterprise, I had to save up all my money. I invested it all outta my own pocket. I bet the house kind of thing. I bet everything I had on my whole life savings on starting this studio. And for me, fortunately it was very successful, but the bank wouldn't lend me money and the bank wouldn't lend me money because as a PT, it was showing we created a tax system where I was able to show a lot of expenses where essentially my profit wasn't substantial enough to get a loan, right? Even though I was earning, a good amount of money, the money was offset against my tax, right? So my profitability, how much I was actually taking home because there was so many business expenses, that's one thing to think about. So the tax is an extremely, I suppose, boring topic. And at this point, I very much want to preface this conversation that if you are going to be in business, You need to get yourself a very good accountant. Now I'm gonna define what I mean by a good accountant. A good accountant is not someone who blows smoke up your ass and tells you what you want to hear. In actual fact, they're the opposite. So my accountant, as much as I love him now, did not exactly believe in my goals. He thought, you know, I'm a personal trainer and I had an ebook at the time that I was selling for $49 online. He kind of looked at me like, what business? You know, you're a promotion, you're a sole trader, you don't have anything to show for it, right? He didn't believe in the vision. And I think often you'll find that the best accountants are very, very real. They're very much like that. They're not about the, you know, the hoo-ha and the vision, all this kind of stuff. So I'm going to advise that, you know, the kind of one of the first things you do in business is go out and get yourself an accountant. Yes, it's going to cost money and potentially the accounts that you start with will be a different accountant that you go to when you achieve some level of success. I know the same is, that's true, definitely true for me. I started with one accountant and now I'm with another accountant because they're at a higher level and able to manage my business. Now, depending on what country you're watching this in is gonna depend on the laws and the responsibilities that you have. So really I can only speak to Australians in this regard, but somewhat it does cross over across countries. Because they're the same kind of systems, but they use different words, right? And I don't know what those words are in every country, but you've got your version of that. So I think it's 401(k) in America. In Australia, it's superannuation, right? It's employee benefits. So if you hire staff, there are tax implications of that. There is things that you must do and also be aware of. Now, again, comes back to my first point. If you've got a good accountant, they're going to make you aware of all your responsibilities and make sure that you do go to your accountant and say, well, what are my employer's responsibilities? What are my responsibilities to pay? So I know in Australia we've got a GST, so Goods and Services Tax, that you have to pay if you earn over $70,000, $80,000, something like this. It depends on each year. They kind of tweak the numbers a little bit. The other thing you should know with tax is, again, I once had a guy, not a personal trainer, but a friend of mine complain about the tax that he was paying by his employer. And I said, well, that's the reality. Whether you're employed by someone or you're your own business, you're going to pay tax. So advice if you are a sole trader. So if you are employed, that your employer, if you're employed by someone, your employer's responsibility is to withhold that tax and then pay the government on your behalf. Okay. If you're a sole trader, it is up to you to keep some money aside, you know, put in a savings account and pay the government in due course. If it's July 1st for us here in Australia, but when the tax man or woman comes knocking, you've got the money. So when you get $100, let's say for example, from your clients, I think the take-home message really is here is to understand that $100 is not all yours, right? That $100 needs to then be allocated. You know, let's say 10%, 20%, whatever it is out of that $100 needs to go and be allocated towards tax. And you want to put that in a savings account and have it there on a rainy day. It's always good to just know that if you are getting $100, it doesn't go 100% in your pocket, right? You didn't earn exactly $100 because you do have to have the foresight that you're going to have to pay tax. And the more money you earn, the more tax you're going to pay. And this is where, you know, in business and the way the economy is set up is that you don't hoard resources, you put it back into the economy. So if you've got a business, it's on you to do more courses, learn more, and essentially grow to a point where you can employ people and you're putting that money back into the economy so that the economy can grow. That's what makes the government happy, basically. So tax tax system is a part of that. So some other things you should know, there are different ways you can set up in Australia. You've got ABN, the Australian Business Number, and you've got ACN, which is Australian Company Number. And there are differences between businesses and companies. Companies are basically legal entities, right? So you might have an entity like an LTD, Pty Ltd, for example. That entity is then the business that's going to be trading with the public, for example, and you could be the director of that entity. Again, these things can become quite confusing and there are a million different ways to set these things up, whether it's better to set it up as a sole trader. Again, you know, with this, it really depends on how much money you're going to be earning. You know, so there's going to be benefits at a certain level. And again, it comes back down to the simple point. I mean, I can speak on this stuff generally and give you some knowledge to then arm yourself with to go to an accountant. Basically. So I'm not trying to teach you this stuff because like it's out of my scope. I've got my own accountants, I've got lawyers that I ask questions to and they advise me. But fundamentally at the end of the year I've got my accountant who does my numbers. So some key things that you want to do as well, what I've done that I found really easy for me managing the business is I've got a business credit card, right? A business credit card. All business expenses go on that business credit card. And the reason why I do business credit card, I pay that thing off literally daily, right? I'm kind of OCD when it comes to paying off a credit card. I'd suggest you do the same. And also the only benefit of credit card, get one with like points because as your business spends money, you're going to get, you know, points. And those points can be like cashback. You can get the annual, the annual rate of the card, you know, for free basically if you're spending money on it. And you know, you can get some cool stuff like gift vouchers and stuff. I use them. I usually give them away to, you my mum and my family. But I digress. That keeping your expenses on a credit card at the end of the year or the end of the month or whatever it is, it's very easy to print out. Here are my business expenses. It's clean. You give it to your accountant. They know your business expenses. You've kept all your expenses in one spot. Obviously, you still got to keep your receipts and that kind of stuff, but it's clean to then hand over and also do your own numbers of what your expenses are. So kind of a segmenting thing. Obviously if you use that method, you want to be quite disciplined in paying back the credit card. That's kind of the only, only thing you really got to make sure you do. And then if you've got one with points, what I do is I use the points, then pay the annual fee of the credit card. So I get the credit card essentially for free. And then there's always leftover points that I can get gift vouchers for, which is nice. So you can get like frequent flyer club cards, like if you're part of an airline and that can help pay for flights and these kind of things. So there's some simple tips around just understanding the legal structures and the legal advice. And if you are employing people, which I'll speak more in Certificate 4 about, you do need to be aware of the legal responsibilities as well.
