Going out on your own in farming is exciting — but it also comes with a few traps that can catch you out quickly if you’re not prepared. Here are the biggest issues I see time and time again 👇
1️⃣ Not Managing Cashflow (and Drawings)
Farming income is never steady — there are good months and tough months. You need to be disciplined in the good ones so you can survive the quiet ones.
And remember — not all the money in your business account is yours! You still need to allow for GST, income tax, and future expenses.
Your drawings (the money you take out for personal spending) need to be planned too. Personal tax comes out of your drawings, so you can’t just dip in and out as you please. A good approach is to decide on a set amount — for example, $1,000 a week — and stick to that as your “wages.”
Also, don’t spend personal items on your RD1 or Farmlands cards. Those small personal bits here and there add up fast and can put your cashflow under serious pressure. Keep business and personal spending separate — your future self (and your accountant!) will thank you.
2️⃣ Trying to Do It All Yourself
When you start out, it’s easy to think, “How hard can it be?” — but business admin, tax, and compliance are a whole new world.
Just like farming took years of learning and experience, running the business side does too. Getting the right help early can save you from expensive (and stressful) messes later on.
3️⃣ Buying Things You Don’t Need — Like a Brand New Ute
This one’s a biggie. A shiny new ute looks great, but hire purchase payments can crush your cashflow fast. Be smart — only take on debt for things that genuinely help your business earn more, not just for the “look” of being self-employed.
💬 If you’re just starting out or thinking about going self-employed, get advice early. It’s much easier (and cheaper!) to set things up right from the start than to fix them later.