When you work for someone else, a fair amount of your financial safety net gets built in without you having to think about it. Superannuation gets paid on your behalf. Some employers offer default income protection or group insurance. There’s a payroll system quietly doing its job in the background.
When you’re self-employed, none of that happens automatically. Every part of it (super, insurance, even the structure your business operates under) is a decision you have to make deliberately, or it simply doesn’t happen. With the end of the year often prompting business owners to take stock, it’s a natural time to check whether those decisions have actually been made.
Superannuation: The Contribution Nobody’s Making For You
For employees, compulsory super contributions arrive whether they think about it or not. For self-employed people, there’s no equivalent obligation forcing contributions to happen, which means it’s entirely possible to run a profitable business for years while your retirement savings barely grow.
This doesn’t mean self-employed people need to contribute more than employees, necessarily: it means the decision to contribute (how much, how often, and through what structure) needs to be made consciously rather than left to default settings that don’t exist. Some self-employed people also become eligible to claim a personal tax deduction for super contributions they make themselves, which is worth exploring with an adviser or accountant as part of your overall tax and retirement strategy.
Income Protection: Who Covers You If You Can’t Work?
If an employee is unable to work due to illness or injury, there’s often sick leave, and sometimes a default income protection policy through their super fund, to fall back on. If a self-employed person can’t work, income generally stops the moment they do; there’s no employer safety net standing behind them.
Income protection insurance is designed to replace a portion of your income if you’re unable to work due to illness or injury. For self-employed people, it’s often one of the more overlooked forms of insurance, simply because there’s no HR department prompting the conversation. It’s worth thinking about not just whether you have cover, but whether the level of cover and the definition of “unable to work” in the policy actually reflect how your income is earned.
Business Structure: The Decision That Shapes Everything Else
The structure your business operates under (sole trader, company, trust, or some combination) affects far more than just how it looks on paper. It can influence how profits are taxed, how personal assets are protected, how easily you can bring in a business partner later, and how straightforward succession or an eventual sale might be.
Business structure isn’t usually a “set and forget” decision either. What made sense when a business started out, often quite small and simple, may not still be the best fit as it grows, takes on more risk, or starts generating more consistent profit. This is a genuinely complex area that benefits from a financial adviser and accountant working together, rather than being decided in isolation.
Cashflow: Smoothing an Income That Doesn’t Arrive on a Schedule
One more thing employees rarely have to think hard about is the rhythm of their income. A regular pay cycle makes budgeting relatively predictable. Self-employed income is often lumpier: strong months followed by quiet ones, invoices paid late, seasonal swings depending on the industry. Building a financial plan around that reality, rather than around an assumed steady income, tends to make debt reduction, super contributions and insurance premiums far easier to sustain consistently, rather than treating them as optional extras in the good months and the first thing cut in the lean ones.
A Natural Checkpoint: Reviewing Before the Year Ends
The end of the calendar year (or the lead-up to the new financial year) is a sensible moment for self-employed people to pause and ask a few honest questions:
- Have I made any personal super contributions this year, or has it fallen off the list entirely?
- Do I have income protection in place, and does it genuinely reflect how I earn?
- Is my current business structure still the right fit for where the business is now?
- Have I reviewed my personal and business insurances together, so nothing’s been assumed to be covered when it isn’t?
- Would a second opinion on my existing plan be useful, even if I already work with an accountant?
How Fowler’s Group Can Help
This is exactly the kind of planning that sits across all three of our service pillars: ADVISE for insurance and succession planning, INVEST for superannuation strategy, and MANAGE for the cashflow decisions that come with running a business. As a CEFEX-certified fiduciary advisor, we work alongside your accountant and legal advisers through our professional network, so your business and personal financial decisions are considered together rather than in separate conversations that never quite connect.
This is general information only and doesn’t take into account your personal objectives, financial situation or needs. Speak with us about how it applies to your own circumstances.
If your business has grown or changed and your financial plan hasn’t kept up, now’s a good time to talk. Call us on 1300 855 849 to arrange a face-to-face, phone, or online conversation.
