Starting a side hustle? These are the five biggest hurdles Australian entrepreneurs face and how to overcome them

* Small businesses have revealed the biggest challenges they face include managing cash flow, making effective marketing and finding the right people to help them, according to the latest research by accounting firm H&R Block. * While managing a side business is never easy, there are some easy ways to get on top of these issues early according to tax expert Mark Chapman and entrepreneur Katherine Sabbath. * From setting up the right business structure to finding mentors, your new side hustle doesn't have to be part of the 60% that fail within three years.* * *It's a dream of many to step away from their daily grind and to pursue their own business. While others can make it look easy, entrepreneurship can be anything but. In Australia for example, 60% of small businesses fail within their first three years. The reasons for failure are many, according to new research by accountancy firm H&R Block which found there are five main struggles affecting small businesses. 1\. Managing cash flow 2\. Marketing effectiveness 3\. Lack of funding 4\. Lack of support 5\. Hiring the right people While a lack of cash flow is listed as the number one business killer, H&R Block Communications Director Mark Chapman told Business Insider Australia there are simple ways to get on top of it. The first is simply getting on top of your tax obligations. "Make sure you declare your income from your side hustle and claim the deductions you are entitled to," he said. "Take advantage of the tax breaks available to small businesses, like the $30,000 instant asset write-off that enables you to immediately deduct the full cost of any capital assets acquired with a cost of less than $30,000. That's great for buying things like laptops, tablets, office furniture and equipment, tools of your trade and even motor vehicles like cars, vans and utes."It might sound obvious, one of the biggest mistakes small businesses face is simply not paying income tax as well as GST if they turnover $75,000."Particularly if you’re coming out of a paid job, you’re probably used to getting your taxes deducted straight from your pay packet by your employer. But now you’re in business on your own account, nobody is going to be deducting anything so you need to proactively manage your cash flow to set money aside for future tax bills," Chapman said. From the very start, it's important to plan for how the business might evolve and structure it accordingly. "Do you want to be a sole trader or run the business through a company or trust? The latter two options are more complex and costlier but come with additional tax advantages and asset protection possibilities – trading as a sole trader can leave you exposed to creditors if things go wrong, meaning your personal assets, including your home, could be at risk."One business owner who knows all about the difficulties of funding a side business is Katherine Sabbath. The cakemaker and Masterchef Australia guest judge told Business Insider Australia it took her 12 months to get together the money to start her baking and cookbook business. Her advice is to seek professional advice when you're unsure. > View this post on Instagram> > A post shared by Katherine Sabbath (@katherine_sabbath) on Jun 26, 2019 at 3:47am PDT"If you’re like me and not a professional when it comes to managing tax, budgeting, financial forecasts etcetera connect yourself with those who are," she said. That extends beyond the realm of finance too."There are so many complementary businesses and people who can collaborate with your brand, or help you to achieve your dreams. Not only can they motivate you, but they can also save you precious time in the longrun. I find these important connections at networking events, cake classes, expos, through mutual friends, social media, and through internet searches," Sabbath said. In building her brand, Sabbath has managed to attract a loyal following of over half a million Instagram followers. > View this post on Instagram> > A post shared by Katherine Sabbath (@katherine_sabbath) on Jun 19, 2019 at 1:59am PDTDespite that success, it's about building a side hustle in a sustainable way."Focus on growing strong slowly, rather than big quickly: it's easy to get caught up in the day-to-day challenges of running a business, and feeling like a failure when things don’t go quite to plan or take longer than expected," she said.

• Small businesses have revealed the biggest challenges they face include managing cash flow, making effective marketing and finding the right people to help them, according to the latest research by accounting firm H&R Block.

• While managing a side business is never easy, there are some easy ways to get on top of these issues early according to tax expert Mark Chapman and entrepreneur Katherine Sabbath.

• From setting up the right business structure to finding mentors, your new side hustle doesn't have to be part of the 60% that fail within three years.

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It's a dream of many to step away from their daily grind and to pursue their own business.

While others can make it look easy, entrepreneurship can be anything but. In Australia for example, 60% of small businesses fail within their first three years.

The reasons for failure are many, according to new research by accountancy firm H&R Block which found there are five main struggles affecting small businesses.

1. Managing cash flow
2. Marketing effectiveness
3. Lack of funding
4. Lack of support
5. Hiring the right people

While a lack of cash flow is listed as the number one business killer, H&R Block Communications Director Mark Chapman told Business Insider Australia there are simple ways to get on top of it. The first is simply getting on top of your tax obligations.

"Make sure you declare your income from your side hustle and claim the deductions you are entitled to," he said. "Take advantage of the tax breaks available to small businesses, like the $30,000 instant asset write-off that enables you to immediately deduct the full cost of any capital assets acquired with a cost of less than $30,000. That's great for buying things like laptops, tablets, office furniture and equipment, tools of your trade and even motor vehicles like cars, vans and utes."

It might sound obvious, one of the biggest mistakes small businesses face is simply not paying income tax as well as GST if they turnover $75,000.

"Particularly if you’re coming out of a paid job, you’re probably used to getting your taxes deducted straight from your pay packet by your employer. But now you’re in business on your own account, nobody is going to be deducting anything so you need to proactively manage your cash flow to set money aside for future tax bills," Chapman said.

From the very start, it's important to plan for how the business might evolve and structure it accordingly.

"Do you want to be a sole trader or run the business through a company or trust? The latter two options are more complex and costlier but come with additional tax advantages and asset protection possibilities – trading as a sole trader can leave you exposed to creditors if things go wrong, meaning your personal assets, including your home, could be at risk."

One business owner who knows all about the difficulties of funding a side business is Katherine Sabbath. The cakemaker and Masterchef Australia guest judge told Business Insider Australia it took her 12 months to get together the money to start her baking and cookbook business. Her advice is to seek professional advice when you're unsure.

View this post on Instagram

A post shared by Katherine Sabbath (@katherine_sabbath) on Jun 26, 2019 at 3:47am PDT

"If you’re like me and not a professional when it comes to managing tax, budgeting, financial forecasts etcetera connect yourself with those who are," she said.

That extends beyond the realm of finance too.

"There are so many complementary businesses and people who can collaborate with your brand, or help you to achieve your dreams. Not only can they motivate you, but they can also save you precious time in the longrun. I find these important connections at networking events, cake classes, expos, through mutual friends, social media, and through internet searches," Sabbath said.

In building her brand, Sabbath has managed to attract a loyal following of over half a million Instagram followers.

View this post on Instagram

A post shared by Katherine Sabbath (@katherine_sabbath) on Jun 19, 2019 at 1:59am PDT

Despite that success, it's about building a side hustle in a sustainable way.

"Focus on growing strong slowly, rather than big quickly: it's easy to get caught up in the day-to-day challenges of running a business, and feeling like a failure when things don’t go quite to plan or take longer than expected," she said.