Once the apprenticeship is over, a fully trained carpenter may have a plethora of options open to him or her.
Some chippies prefer to work for salaries for a few more years, although converting to self-employment is always an appealing alternative.
By this point, you should have a sizable tool collection, a reliable ute and trailer, and, most crucially, the necessary abilities to perform skilled carpentry work.
As you transition to owning your own business, having a strong network of builders will be quite beneficial.
In this article, we’ll take a deeper look at what it takes to establish your own carpentry business in Australia.
Licensing
Before we go on to the more practical areas, we must first address licensing.
Unfortunately, because of Australia’s state-based system, determining what licenses you’ll need (if any) to get started can be somewhat challenging.
If you’re working as a subcontractor for a builder, you won’t require a license in most cases. Their construction license will cover your job.
However, this does not apply to insurance. Even if you’re working as a subcontractor, you’ll almost always require your own independent public liability insurance.
Depending on the value of the job and the state where you are situated, you may require a license if you are doing work directly for clients.
We highly advise that you consult with your state’s competent government, but we’ve compiled a concise overview below. Also remember that your insurance requirements will change when moving to starting your own company, your current coverage may not cover sub-contractors for example. Compare quotes online with BizCover and look into insurance for carpenters.
If you’re already up to date on your license requirements, you can skip all this and move on to the next section.
QLD
If you’re doing any construction work worth more than $3,300, you’ll need a QBCC license.
Importantly, even if you are not providing the supplies, the value of the job does need to take into account the market expenses of the materials utilized.
You’ll need a QBCC license in the ‘Trade Contractor’ class if you’re doing work worth more than $3,300 (which you most certainly should be aspiring to do).
The next stage is to obtain a builder’s license, which comes in a variety of classes.
NSW
To work as a carpenter in the state of New South Wales, you’ll need to apply for a Contractor Licence. There doesn’t appear to be any minimum requirement associated with this license.
If you’re doing any work worth more than $20,000, you’ll need insurance from the Home Building Compensation Fund.
If the worth is less than $20k, there are no insurance requirements; however, public liability is usually suggested for all types of work.
VIC
Carpenters in Victoria must register with the Victorian Building Authority (VBA) if they are doing work worth more than $10,000. This level covers labor and materials costs.
SA
If your company “carries out or organizes building work” in South Australia, you’ll require a license. Carpentry work most certainly falls within this category.
Surprisingly, SA also requires that subcontractors are licensed.
WA
If you’re doing building work worth more than $20,000 in Western Australia, you’ll need to register as a building contractor.
If you’re working on a project worth less than $20k, it appears that you don’t need a license, but we recommend double-checking with the WA Building Commission.
TAS
Carpentry, unlike electricians and plumbers, is not a “licensed vocation” in Tasmania; however, it does appear to fit under the building services category.
For further information, we recommend contacting the Department of Justice.
ACT
Although there is no specialized carpentry license in ACT, a carpenter appears to need a Class D Builders license, which includes the following:”Basic non-structural building work, excluding specialised building work or asbestos management.”
NT
In the Northern Territory, carpenters do not need a license if the job is worth less than $12,000.
This information was correct at the time of the writing. For the most up-to-date information, please contact the relevant state government.
Business Structure: Sole Proprietorship, Partnership, or Limited Company
You can structure your new carpentry business in a number of different ways.
It’s preferable to consult an accountant before deciding on a business structure, but not everyone has access to one before starting a company.
Many carpenters start their businesses as sole traders. This is unsurprising considering that it is the cheapest and most straightforward business structure available.
However, it isn’t the only choice. Other options for structuring your company include partnership and limited company.
From an insurance standpoint, the good news is that switching from one business structure to another without having to start a new policy is simple.
If you want to learn more about business structures, talk to your accountant.
While we’re on the subject of accounting, you might want to think about hiring a bookkeeper for your company. You’ll be able to spend more time on the tools and less time on paperwork as a result of this.
Insurance
After you’ve figured out your licensing requirements and business structure, the next step is to secure insurance.
We’ve previously published a comprehensive guide on carpenters insurance, which you can see here.
As such, we’ll just provide a quick rundown here.
Public liability insurance is the most popular type of insurance for a carpentry business. This is the coverage that will protect you if your job causes property damage or personal harm to someone else.
It’s important insurance yet also quite inexpensive, with rates starting at about $400 per year for a $5 million policy.
Any carpenter should consider obtaining tool insurance, especially if they have a large collection of power tools, as most chippies do.
You won’t be able to rely on sick leave or workers compensation if you’re self-employed (depending on which state you live in).
As a result, income security becomes increasingly vital. When you are unable to work due to an injury or sickness, income protection can cover a significant percentage of your income for a period of time.
Marketing
It’s pointless to go to the trouble of starting a carpentry business if you can’t find customers for your services.
However, spending money on branding and marketing may not be worthwhile for some self-employed carpenters who just subcontract to other builders.
After all, why spend money on items you don’t need if you already have a solid network of builders providing you with enough business to keep you busy?
However, if you want to go out and get your own work or establish a recognizable brand, you’ll need to engage in marketing.
After you have chosen a suitable business name, get a logo developed.
Some tradies prefer to do their own work on the computer, but it’s worth hiring a specialist for more professional results.
If you’re interacting directly with clients or just want a strong online presence for your company, getting a website might be a terrific idea.
We don’t know if people still use directories like the Yellow Pages, so you’ll have to find out for yourself!
Memberships in Professional Organizations
Joining an industry group might help you stay on top of the news that affects your firm.
Carpentry Australia will be the place to go for chippies. They are Australia’s only professionalorganisation that represents carpenters.
Not only do they have some fantastic tools, but you can also utilize their logo in your marketing, which may help give your company a more professional and respectable appearance.