Before setting up shop, get experience

I AM studying a Diploma of Commercial Arts Interior Design and I am considering registering my business name and setting up an online interiors store. Is this an easy enough thing to set up, to build a website, buy goods wholesale and sell online for a profit? Or am I biting off more than I can chew? The plan eventually will be to combine the two - interiors online and interior design service - once I have graduated.

I AM studying a Diploma of Commercial Arts Interior Design and I am considering registering my business name and setting up an online interiors store. Is this an easy enough thing to set up, to build a website, buy goods wholesale and sell online for a profit? Or am I biting off more than I can chew? The plan eventually will be to combine the two - interiors online and interior design service - once I have graduated.

I think it would be a good idea to get some experience in the workforce before you jump into your own business. Retail is a tough industry right now and there are a lot of people struggling, so you need to make sure you have a niche and can set yourself apart. You might want to consider getting a job and setting up your online store as a part-time gig. The last thing you want to do is graduate and put all your money into setting up a business with no real experience. Find a job that will teach you the basic skills you need to establish your own business and go from there. Trust me, setting up an online business isn't as easy as it looks and even though lots of people are successful in it, there are also a lot of failures. Do what you have to do to learn as much as you can and then have a go at it. Good luck.

I AM a single, self-employed 45-year-old private business consultant working from my home office. The average income generated by my consulting practice is between $250,000 and $300,000 per annum. I am paying off my house, which is valued at about $1.1 million. I have a mortgage of $450,000. My aim is to pay off this mortgage as soon as possible. However, to do this I need to withdraw substantial income from my business, which results in me paying substantial amounts of personal income tax. I do not claim a full-time home office because I am concerned about having to pay capital gains tax on a proportion of the selling price of my house when I eventually sell. What is the best way to minimise my personal income tax and pay off my home loan as quickly as possible? I have been told there would be some complexities in me borrowing substantial amounts of money from the company in order to pay the mortgage.

On the facts you've given I'd say that you're best not to borrow from the company but rather to take your remuneration and make any debt reductions from there. You have a good income, so even after the payment of your income taxes you still have the ability to reduce your debt quite quickly. Do you have an offset account where you park your surplus income? If you don't, you should. Also, are you making monthly, fortnightly or weekly loan repayments? Making repayments more frequently will reduce your mortgage much faster. With regards to the home office, if you claim occupancy costs such as interest and rates you do open it up to capital gains tax. You can, however, claim operational costs such as phone, internet, power, heating and cooling, as well as depreciation on your home-office equipment and furniture. You will need to keep a journal of time spent in the home office as one of the options in determining your deduction is based on time spent combined with a floor area calculation of the office size compared to the house size. The hard and fast rule is to keep good records to ensure that you are getting a deduction for all of your legitimate business expenses.

Mark Bouris is executive

chairman of Yellow Brick Road,

a wealth-management

company and small business adviser that offers products

and services for home

loans, financial planning, insurance, superannuation, investments, accounting and tax: ybr.com.au.

If you have a question for Mark Bouris email it to Adam Cooper at adam.cooper@fairfaxmedia.com.au.