All you need to know to set up your dōTERRA Business:
This commentary is meant as factual information only and not as Personal Advice in any way. Please consult your Solicitor and Accountant to assess your personal circumstances and to get you organised – ensuring that you meet your legal and tax obligations.
I was once told, if you want to be a manager, act like a manager, while doing your current job really well. What that taught me was, if you want to run your own business, you need to act like you are running your own business, and that for me means professionally and with the knowledge required to get it right.
So, if you want to be a Diamond, act like a Diamond Leader, even when you are starting out to build your business to Elite. Think about all the things – the personal characteristics and activities your Diamond upline demonstrate and then work out how you can incorporate that into your daily business.
The best advice I can give you is READ and LEARN and WATCH and ASK!
Business or Hobby?
The first decision is whether you are in fact running a commercial enterprise/business or are you just in Hobby mode. This decision depends partly on your main intention, whether you are taking actions on a regular and repeated basis and if your activity is planned and runs in a business-like manner. A Hobby on the other hand is more for Personal Enjoyment, in your own time or when people contact you.
You can see therefore why in the case of dōTERRA, it is really when you are getting to PREMIER and definitely SILVER, that your actions start to become more clearly a business – so what then? In Australia when you reach SILVER Rank, you MUST register for an ABN and provide it to your Account Manager.
As soon as you are carrying on a Business, you MUST REGISTER FOR AN ABN – Australian Business Number.
Do I need a Business Name?
In Australia, if you have a Tax File Number and have registered for a ABN, then you can decide if you want to carry on your business in your own name or in a different BUSINESS NAME.
Part of this decision is if you want to carry on your business as a SOLE TRADER (or partnership) in other words, you are doing everything in your own name. Or, at some point, your accountant may recommend you consider a COMPANY or TRUST structure to run your business. These come with extra costs, so get your own advice on this. (Learn about Business Structures HERE)
If you run your business as a SOLE TRADER and use your OWN NAME, then you DO NOT NEED TO REGISTER A BUSINESS NAME.
If however you plan to run your business under any other name, YOU NEED TO REGISTER THE BUSINESS NAME. Find out more HERE.
You may also want to check for a Web Domain Name just in case to keep your Business Name and Brand the same.
Why Silver for ABN?
The average earnings of a Silver WA was U$26,370 in 2016. If we look at the Australian Income Tax Tables, you can earn your first $18,200 TAX FREE and you pay 19% on every dollar earned from $18,201 to $37,000.
If fact, with tax offsets (and I wont explain that here) you can in fact potentially earn $20,542 in Australia TOTALLY TAX FREE. Makes sense then that if this is your only income, it may be tax free and still considered a hobby. So once you hit SILVER, you will probably have a tax reporting issue and you will probably be running a real business – so GET YOUR ABN.
What about GST?
Basic rule – if your business is turning over $75,000 or more each year, then you MUST register for GST. Otherwise registering is voluntary – in other words, even if you turn over $30,000 you may decide to register for GST.
Currently in Australia, the process is, if you (or your trading company/entity) is registered for GST, then you make contact with Head Office – Monika Dheri <firstname.lastname@example.org> – Finance Manager – Australia and she will assist you with this process.
Effectively, you have to add up all your dōTERRA Commission each quarter, then create what is known as a Recipient Created Tax Invoice – RCTI – and submit that to dōTERRA. dōTERRA then pay to you the GST relating to your total Commission Earned and you have to submit and report that on your Quarterly BAS – so chat with your accountant.
When you do this, then you are also entitled to add up ALL the GST you have paid that relates to your Business Expenses and offset that against the GST you receive from dōTERRA and you only pay the difference to the ATO on your BAS. (Learn about GST HERE)
To download the doTERRA GST Claiming Invoice Template, click here:
Can I change from Sole Trader to a Business (Company or Trust)?
Simply, yes. Once you decide, with the help of your Accountant, to operate your business in another entity – for example you may set up a company when your business get to a level where it makes tax sense or otherwise – then follow these steps:
Step 1: Complete the Account Information Change Form:
Step 2: Complete the Business Addendum Form:
Send everything to dōTERRA Data Entry <email@example.com>
PS. You can also use the Change form to change address, marital surname or also importantly, you may want to ADD your partner at some point as a co-applicant. This will allow for you both to be invited to dōTERRA functions and specifically get acknowledged as a couple – and that is AMAZING!
Once you are registered and have your ABN, you will need to keep track of all your business expenses and income, and although that may seem difficult at first, don’t stress, just get things together in an Excel Spreadsheet – that’s what we have done for two years. It is only recently that we moved to an online, CLOUD Accounting software, which our accountant has trained us in, and which we now run from our iPhones, taking photos of all expense receipts and checking off expenses against our bank account weekly.
Template and Software:
If you are looking for a basic Accounting Excel Spreadsheet Template, try this one, which our bookkeeper provided us with some time ago. You can easily customise the columns, but it is an easy record keeping system:
Otherwise chat to your accountant about XERO, Quickbooks or something similar.
How long do you have until the END of this TAX YEAR?
You may want to get advice and get set up properly for 2018 – 2019 year – starting 1 July 2018.
It is your responsibility to seek advice on your personal circumstances, AND beware if you are receiving CENTRELINK Parenting Payments or Family Tax Payments, amongst others, as all income you earn, no matter how much, needs to be declared and it MAY have an impact on the amount of income you are entitled to from CENTRELINK. PLEASE SEEK ADVICE ON THIS.