How to start a new business in Australia
There are so many things to consider and so many steps to take before you can get your business off the ground.
Luckily, we’ve created this this step-by-step guide to help you get your business up and running and well on the path to success.
Step 1 – Choose your structure
First and foremost, you need to choose the right business structure. There are four main business structures to choose from for an Australian business:
As a sole trader you are registered as the sole owner of the business, which means that you become legally responsible for all areas of the business, including the actions of your employees during the course of their work.
A partnership is when two or more people work together to run the business, but they are not set up as a legal company.
A company is its own legal entity, which is separate from its shareholders.
There are lots of advantages of using a legal company structure, but it is also much more complicated and may not be ideal for a small, simple business, especially if you want to stay in full control.
For a useful overview of the differences in the tax structures, liability, legalities and administrative burden, check out this guide from the Australian Government.
A Trust is an entity that essentially holds property or income for the benefit of others.
If you are unsure about what business structure to use, this useful decision tool will help you.
Check out this very handy video from the ATO to help you understand which structure would best suit your needs.
|Rules and administration||Simple||Medium||Complex||Complex|
|Expense – set up and ongoing||Low||Low||High||High|
|Protection against personal liability||No||No||Yes||Some|
Step 2 – Decide on your business model
Once you’ve chosen the structure that best fits your business needs, the next step is to choose your business type. There are many different options, but these are these most common.
If you choose to buy a franchise then you’ll be stepping into a business where most of the important issues have already been worked out, including the business model, product sourcing and marketing. You’ll have strict guidelines to follow but you’ll have the advantage of instant brand recognition and customer goodwill.
As the owner of an independent business you’ll have complete control – but you also won’t have the luxury of a ready-made brand, existing supplier contracts and a pre-warmed customer base. Most independent businesses start up in a single location and only expand as the business and reputation grows – unlike a franchise which customers may be used to seeing everywhere they go (think Maccas, Gloria Jeans, Bing Lee).
More and more businesses – both product and service based – are setting up online rather than operating from a physical office or retail outlet. There are a multitude of benefits to handling your business online, including:
Cost savings – no expensive premises
Reaching a global audience
24-hour ordering for clients
Of course, you don’t have to run your entire business online. You could still have a shop or office and operate online as a supplementary sales channel – or simply offer services via your website or social media platform that help benefit your target audience.
- If your business is based on appointments, you can enable clients to make them online, with no fuss.
- Communication with customers and clients becomes much easier with the aid of online chat features, social media and email.
Step 3 – Get your ABN
Once you’ve made the fundamental decisions about your business, you’ll need to apply for your Australian Business Number (ABN). Without this 11-digit legal identification number you cannot legally start your business.
It is very easy to apply for an ABN and it usually takes just 15-20 minutes for the whole application process. This is what you’ll need to provide in order to get
Your personal information
Information about your business
Details on any associates who will be establishing the business with you
The reason why you are applying
Details about your planned business activities
Your confirmation that information you have provided them is true
Click here to get started: Apply for ABN.
Step 4 – Register your business name
Once your application has been approved and your ABN has been issued, the next thing is to register your business name. Before doing so, you’ll need to check that the name you want hasn’t already been taken.
There are some words that you won’t be allowed to use in your business name without the approval of a government minister: Trust, Bank, Royal, and Incorporated.
If your chosen name is not available, just keep searching until you find something you like that isn’t yet in use. Check that your chosen name hasn’t been trademarked by someone else, to avoid the risk of a potential lawsuit down the track.
It’s also a good idea, too, to get the same domain name as your business name, so make sure the domain name is also available (if you want the same name). More on this in step 5 below.
Once you’ve settled on a name, you’ll have to set up an account with the Australian government’s Business Registration Service to register it. Once you are all set up, it will take you about 15 minutes to complete the application process, and then you will get an email with confirmation.
You can even apply your ABN and register your business name at the same time.
Applying for your business name will cost you $34 AUD for a year or $75 AUD for three years.
You may also want to consider trademarking your business name if you want to protect full rights to it.
Step 5 – Register your domain name
If you’re planning to set up a website (and let’s face it, pretty much any business needs a website these days) then it’s a good idea to register your domain name as soon as you’ve settled on your business name, before someone else gets in and squats on your prime online real estate!
There are lots of sites where you can buy domain names – you’ll find a list on the .au Domain Administration Ltd (.auDA) website.
Step 6 – Fund your business
Once you have taken care of all the administration, your next step is to get hold of the funds you need to run your business.
If you don’t already have capital set aside, you could apply for a small business grant, seek a small business loan (although this may be hard to secure until you’ve been trading for at least 6 months) or look for investors.
You can also check out our guide for startup funding.
There is a lot of legal and financial administration involved in running a business, especially if you’re going to hire employees.
Be sure to engage a good accountant and legal advisor to help you manage your PAYG and superannuation obligations, not to mention your business taxes.
And make sure you have all the permits or licences you need to operate in your chosen field.
Finally, ensure you have public and product liability insurance and/or professional indemnity insurance in place to protect both you and your business against damage or negligence claims – plus general business insurance to protect you against theft, disaster, or business interruption.
Starting a new business in Australia can seem overwhelming at first, that’s why I set out to make you this handy guide.
From choosing your business structure to selecting business insurance, we covered off each of the steps you need to take to get your new business up and running.
Once you’ve setup your new business you can focus on what you do best - being an expert in your space and supplying your product or service to your first customers!
I wish you the best of success!
Let me know what type of business you’ll be starting or ask a question by leaving a comment below.