The landscape of small businesses in Australia has undergone a significant transformation since the COVID pandemic, with over 50 per cent of small-to-medium enterprises now choosing to start and operate from the comfort of their own home.
This trend is driven by a combination of factors, including inflation, the rising cost of living, and the enduring impacts of the COVID pandemic and has reshaped how entrepreneurs approach business ownership.In a survey of 200 small businesses across Australia, Thriday – which uses artificial intelligence to automate banking, accounting, and tax – uncovered 51 per cent of small businesses start and operate from home, with an overwhelming 83 per cent saying they were satisfied with their choice.
Less than half – 37 per cent – of business owners said they had a “clear” understanding of their work-from-home tax obligations.
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And 72 per cent had purchased new equipment or invested in upgrades to their property to support working from home.
Only 22 per cent would consider moving to a fixed office or retail location, with revenue and growth being the key reason to do so.Rising inflation and the increased cost of living have prompted entrepreneurs to seek ways to reduce overheads and the COVID pandemic has accelerated the adoption of remote work.
In addition, the rise in women-owned businesses and people caring for children and the elderly has led to a surge in people exploring their small business aspirations from the comfort of their homes.From home entrepreneurs enjoy reduced operational costs, eliminate their morning commute, and can tailor their work environment to suit their needs.
This trend has seen a significant demographic of new business owners emerge, particularly mothers seeking work-life balance and individuals pursuing side hustles to supplement their income.However, running a home-based business also has its fair share of challenges. Balancing work and your personal life can be demanding and separating the two in a home environment requires discipline.
Establishing a professional image while operating from a residential setting can also be a hurdle to overcome.
“Within the current economic environment, there isn’t a better way to get started than from your home.”
One critical aspect that home-based entrepreneurs need to consider is navigating the complexities of tax deductions.
The Australian Taxation Office (ATO) provides various opportunities for small businesses to claim tax deductions related to their work-from-home setup.
These deductions include portions of rent or mortgage interest, utility bills, office equipment and internet expenses. To fully harness these benefits, good record-keeping is essential.“Retaining receipts and maintaining a comprehensive logbook is vital for claiming work-from-home tax deductions,” advises Michael.
“Thriday is designed to alleviate the burden of financial management. Our AI-powered platform automates banking, accounting, and tax processes, ensuring that small business owners can focus on what they do best while staying on top of their finances.”Thriday’s user-friendly platform empowers thousands of Australian entrepreneurs to manage their finances and tax returns effortlessly by automating various financial processes and offering guidance on tax deduction claims.
Disclaimer: This story contains general information about a product and is not intended as financial advice. Before acting on any investment information that may be included in this article, consider your financial situation and objectives, and seek your own professional advice.