Are you thinking of starting a business in Australia? Whether you have a brilliant idea, a passion, or a skill, you can turn it into a profitable venture in one of the world’s most dynamic and diverse economies.
But starting a business is not as easy as it sounds. There are many things you need to consider, plan, and do to make your business successful. You also need to comply with various laws, regulations, and obligations that apply to businesses in Australia.
To help you navigate the process of starting a business in Australia, we have created this step-by-step guide. We will cover the essential steps you need to take before, during, and after launching your business. We will also provide you with some useful tips, resources, and links along the way.
Let’s get started!
Before You Start
Before you jump into the big task of setting up a business, there are some initial steps to take. This includes making sure you’re prepared, looking closely at your business concept, and gathering information.
Check If You’re Ready
Starting a business requires a lot of effort and commitment. It’s not for everyone. It’s important to know what’s involved and if you’re suited to business and self-employment.
We recommend you take some time to critically evaluate yourself and the challenges of owning a business. Ask yourself questions like:
- Why do you want to start a business?
- What are your goals and expectations?
- What are your strengths and weaknesses?
- How much time, money, and energy can you invest?
- How do you cope with stress, uncertainty, and risk?
- How do you deal with failure and feedback?
- How do you balance work and life?
Online quizzes and tests are also available to check if someone is ready and right for business. For instance, the Entrepreneur Quiz or the Self-Employment Assessment from the Australian Government could be attempted.
Analyze Your Business Idea
After making up your mind to kick off a business, it’s important to examine the business concept and think about its possibilities. It’s crucial to confirm that the concept is doable, practical, and can make money.
Some questions to ask yourself are:
- Is there a want or need for your product or service?
- Who are your target customers and what are their pain points?
- How will you solve their problems or satisfy their desires?
- What are the benefits and features of your product or service?
- How is your product or service different from or better than your competitors?
- How will you price your product or service?
- How will you market and sell your product or service?
- How will you deliver your product or service?
- How will you measure your success?
Certain tools and frameworks can assist in examining a business concept. The Business Model Canvas or the Lean Canvas, for instance, can help outline the main components of a business model. The SWOT Analysis or the PEST Analysis can be used to pinpoint the advantages, disadvantages, possibilities, and risks of a business concept.
Do Your Research
Once you’ve looked at your business idea closely, it’s time to do some research. This means checking if what you think is true and testing your ideas. You should gather lots of information and data to help you make good choices and decisions.
Here are some important things to look into when doing research:
Market: Understand how big your market is, how it’s changing, and what people are interested in buying. Figure out the different groups of people in your market and any areas where there might be opportunities.
Customers: Learn about the people who might buy from you. Find out what they like, what they need, and how they shop. It’s also helpful to know how you can get their attention and keep them coming back.
Competitors: Check out who else is selling similar things to you. See what they’re doing well and where they might be lacking. This can help you figure out how to stand out from the crowd.
Industry: Understand the rules and trends in the industry you’re getting into. Know what’s expected and what challenges you might face.
Resources: Take stock of what you have and what you’ll need to start your business. This includes things like your skills, equipment, and money. Knowing what you have can help you plan better for what you need.
Use various methods and sources to do your research. For example, you can:
- Conduct surveys, interviews, focus groups, or observations with your potential customers
- Use online tools, platforms, or databases to collect and analyze data
- Read reports, articles, blogs, books, or magazines related to your industry or topic
- Attend events, workshops, webinars, or courses to learn from experts or peers
- Join online communities, forums, or groups to get feedback or insights
- Visit or contact other businesses or organizations that are similar or relevant to yours
During the Start-Up
Once the basic work is complete, it’s time to kick off the business. This includes making plans, picking options, getting the business registered, organizing everything, and finally, starting the business.
Plan Your Business
When you’re starting a business, making a plan is a key step. This plan helps make your dreams, targets, and methods clear. It also lets you spot and tackle any possible problems or dangers. Plus, it’s a great way to share your business idea with others like those who might invest in your business, work with you, or buy from you. This should be simple enough for a sixth grader to understand.
A business plan is a document that summarizes the key aspects of your business. It typically includes:
- An executive summary: A brief overview of your business, its purpose, objectives, and value proposition
- A business description: A detailed description of your business, its history, structure, ownership, and location
- A market analysis: A comprehensive analysis of your market, customers, competitors, and industry
- A marketing plan: A clear plan of how you will market and sell your product or service, including your target market, positioning, pricing, promotion, and distribution strategies
- An operational plan: A practical plan of how you will run your business, including your operational processes, systems, policies, and procedures
- A financial plan: A realistic plan of how you will finance your business, including your income, expenses, cash flow, and projections
- A risk analysis: A thorough analysis of the potential risks and challenges that your business may face, and how you will manage or mitigate them
- An appendix: Any additional information or documents that support your business plan, such as resumes, references, licenses, permits, contracts, or samples
There are many different patterns, aids, or manuals that can assist in crafting a business plan. For example, the Business Plan Layout or the Business Plan Handbook provided by the government of Australia could be used.
Choose Your Business Structure
Choosing your business structure is another crucial step in starting a business. It affects your control, taxes, regulatory obligations, health and safety requirements, and personal liabilities. It also affects how you can raise funds, transfer ownership, or exit your business.
There are four main types of business structures in Australia:
- Sole trader: A sole trader is a person who runs and owns the business by themselves. They have full control and responsibility for the business. They also keep all the profits and losses. They are taxed as an individual and have unlimited liability for any debts or damages.
- Partnership: A partnership is an arrangement where two or more people run and own the business together. They share the control, responsibility, profits, and losses of the business. They are taxed as individuals and have unlimited liability for any debts or damages, unless they form a limited partnership.
- Company: A company is a legal entity that is separate from its owners, who are called shareholders. The shareholders appoint directors to manage the company. The company has its own rights and obligations, and can own assets, enter contracts, and sue or be sued. The company is taxed at a flat rate and has limited liability for any debts or damages, unless it is a proprietary company.
- Trust: A trust is an arrangement where a person or a company, called the trustee, holds and manages the business assets for the benefit of others, called the beneficiaries. The trustee has the control and responsibility for the business, but does not own the assets. The beneficiaries have the right to receive income or capital from the trust. The trust is not taxed, but the trustee or the beneficiaries may be taxed depending on the type of trust.
You can also combine different business structures to suit your needs. For example, you can have a company as a trustee of a trust, or a partnership of companies.
Choose the business structure that best suits your business goals, needs, and preferences. Compare the advantages and disadvantages of each business structure on the Business.gov.au website. Consult a professional adviser, such as an accountant, lawyer, or business consultant, to help in choosing the best option for your situation.
Register Your Business Name
After choosing your business structure, register your business name with the Australian Securities & Investments Commission (ASIC). A business name is the name under which you operate a business. It is different from your legal name, which is the name of the person or entity that owns the business.
Need to register your business name if you want to trade under a name that is not your legal name. For example, if Legal name is John Smith and you want to run your business as Smith’s Plumbing, register Smith’s Plumbing as your business name.
To register business name, you need to:
- Check if preferred name is available on the ASIC website
- Apply for business name online through the ASIC Connect portal
- Pay the registration fee, which is $36 for 1 year or $85 for 3 years
Before a business name can be registered, it’s necessary to either have an Australian Business Number (ABN) or be in the middle of applying for one. This is a must-do step for all the businesses.
Get an ABN
An Australian Business Number (ABN) is a unique 11-digit number that identifies your business to the government and the community. It is not compulsory to have an ABN, but it has many benefits, such as:
- Register for Goods and Services Tax (GST) and claim GST credits
- Register your business name and domain name
- Avoid the paying as you go (PAYG) tax on payments you receive
- Deal with other businesses more easily and professionally
- Access government grants, concessions, and support
To get an ABN, following is needed:
- Check eligibility for an ABN on the ABR website
- Apply for your ABN online through the ABR website
- Provide personal and business details: name, address, contact information, business structure, activity, and income
- Receive your ABN instantly or within 28 days, depending on your application
Obtaining an ABN doesn’t cost anything and it’s a one-time process. If things change, the details of the ABN can be adjusted or even cancelled online.
Set Up Your Finances
- When starting a business, it’s important to plan your finances. This means figuring out how to fund your business, handle your money, and take care of taxes. Here are some steps to help with this:
- Calculate start-up costs: These are the one-time costs needed to get your business going. Things like equipment, stock, licenses, permits, insurance, and more. A Start-up Cost Calculator can help estimate these costs.
- Calculate ongoing costs: These are the regular costs to keep your business running. Things like rent, utilities, salaries, supplies, marketing, and more. A Cash Flow Template can help predict these costs and income.
- Explore financing options: These are the different ways to get money for your business. Things like savings, loans, grants, investors, or crowdfunding. A Business Finance Guide can help find the best option.
- Open a business bank account: This is a different account from your personal one. It’s used for business transactions like receiving payments, paying bills, and keeping track of expenses. The MoneySmart website can help compare different business bank accounts.
- Start a bookkeeping system: This is a way to record and organize your financial transactions. Things like sales, purchases, invoices, receipts, and taxes. It can be manual, spreadsheet, or software-based. A bookkeeper or an accountant can also be hired to help.
- Start a payment system: This is a way to accept and process payments from customers. Things like cash, check, credit card, debit card, or online payment. A point of sale (POS) system, a merchant account, a payment gateway, or a third-party service can be used. Different payment options like instalments, subscriptions, or discounts can also be offered to customers.
Get Professional Licenses
Depending on what your business does, where it is, and what it sells, you might need to get different licenses, permits, or registrations. These are needed to follow the rules and laws that apply to your business.
Some of the common licenses and permits that you may need are:
- Business license: This is a general license that allows you to operate your business in a specific area, such as a city, state, or territory. You can check if you need a business license and how to apply for one on the Business.gov.au website.
- Industry-specific license: This is a specific license that applies to certain industries, such as food, health, beauty, construction, education, or tourism. You can check if you need an industry-specific license and how to apply for one on the Business.gov.au website.
- Professional license: This is a specific license that applies to certain professions, such as accounting, law, engineering, or medicine. You can check if you need a professional license and how to apply for one on the Business.gov.au website.
- Product-specific license: This is a specific license that applies to certain products, such as alcohol, tobacco, firearms, or chemicals. You can check if you need a product-specific license and how to apply for one on the Business.gov.au website.
The Australian Business Licence and Information Service (ABLIS) can be used to discover the necessary licenses and permits for a business.
Register for GST
Goods and Services Tax (GST) is a 10% tax that applies to most goods and services sold or consumed in Australia. Register for GST if:
- Business has a GST turnover (gross income minus GST) of $75,000 or more
- Non-profit organisation has a GST turnover of $150,000 or more
- Provide taxi or limousine travel for passengers (including ride-sourcing services like Uber or Ola)
- Want to claim fuel tax credits for business
To register for GST, follow these:
- Have an ABN or be in the process of applying for one
- Log in to the Australian Taxation Office (ATO) Business Portal
- Select the option to register for GST and follow the instructions
- Receive a confirmation email with your GST registration details
Register for GST through your tax or BAS agent, or by calling the ATO on 13 28 66.
Once you are registered for GST, you need to:
- Include GST in the price of taxable sales
- Issue tax invoices your customers
- Claim GST credits your business purchases
- Report and pay GST amounts to the ATO
- Keep records of GST transactions
GST can be reported and paid every month, every three months, or once a year. It all depends on what works best.
Register Your Domain Name
A domain name is the address of website on the internet, such as www.example.com.au. It is an important part of online presence and identity, as it helps customers find and remember.
To register your domain name, you need to:
- Choose a domain name that is relevant, memorable, and easy to spell
- Check if your preferred domain name is available on the Domain Name Registrar website
- Choose a domain name registrar, which is a company that sells and manages domain names
- Apply for your domain name online through your chosen registrar
- Pay the registration fee, which varies depending on the registrar and the domain name extension (such as .com, .com.au, or .org)
- Receive a confirmation email with your domain name registration details
It’s also possible to sign up for many domain names or different versions of a domain name. This helps keep a brand safe and stops any mix-ups.
Register for PAYG Withholding
The Pay as you go (PAYG) withholding is a method where money is taken out from the payments made to employees, contractors, or other businesses. This money is then given to the ATO.
Signing up for PAYG withholding is necessary if:
- There are employees or there are plans to hire employees
- There are agreements with contractors to take out tax from their payments
- Payments are made to other businesses that don’t provide their ABN
To sign up for PAYG withholding, these steps need to be followed:
- An ABN is needed or an application for one should be in progress
- The ATO Business Portal needs to be logged into
- The option to sign up for PAYG withholding should be chosen and the instructions followed
- A confirmation email with the PAYG withholding registration details will be received
Once you are registered for PAYG withholding, follow these steps:
- Withhold the correct amounts from the payments you make to your employees, contractors, or other businesses
- Report and pay your withheld amounts to the ATO on a regular basis, either monthly or quarterly
- Provide payment summaries to your payees at the end of the financial year
- Lodge an annual report with the ATO summarising your PAYG withholding activities
- Keep records of your PAYG withholding transactions
Launch Your Business
The final step in starting a business is launching your business. This is when you introduce your product or service to target market and start generating sales and revenue.
Some of the things need to do to launch your business are:
- Test your product or service: Before you launch your product or service, make sure that it works well, meets your customers’ needs and expectations, and complies with any quality or safety standards. Test your product or service by conducting beta testing, user testing, or quality assurance testing with a small group of customers or users.
- Create a launch plan: A launch plan is a document that outlines your goals, strategies, and actions for launching your product or service. It typically includes aunch date, launch budget, launch team, launch channels, launch message, launch offer, and launch metrics. Use the Launch Plan Template to create your launch plan.
- Promote your launch: Promotion is the process of creating awareness, interest, and desire for product or service among your target audience. Use various methods and channels to promote your launch, such as social media, email marketing, content marketing, public relations, advertising, or word-of-mouth. You can also use different tactics and tools to enhance your promotion, such as landing pages, videos, webinars, podcasts, blogs, or influencers.
- Execute your launch: Execution is the process of delivering your product or service to your customers and ensuring their satisfaction and loyalty. Use various methods and tools to execute your launch, such as online platforms, e-commerce systems, delivery services, customer service systems, or feedback mechanisms. You can also use different techniques and tips to improve your execution, such as pre-launch, post-launch, or launch day checklists, FAQs, or testimonials.
- Evaluate your launch: Evaluation is the process of measuring and analysing the results and outcomes of your launch. Use various methods and tools to evaluate your launch, such as surveys, interviews, reviews, analytics, or reports. You can also use different frameworks and models to interpret evaluation, such as SMART goals, SWOT analysis, or ROI calculation.
After the Start-Up
After launching your business, to manage and grow your business. This involves running, improving, and expanding your business operations, products, services, and markets.
Some of the things you need to do to manage and grow your business are:
- Manage your finances: Monitoring your earnings, outgoings, cash flow, and profitability is the process of managing your money. To manage your finances, you can utilize a variety of techniques and resources, including accounting, forecasting, budgeting, bookkeeping, and reporting. To strengthen your finances, you can also employ a variety of techniques and advice, such as cutting expenses, raising income, or obtaining funding.
- Manage your people: Managing your team involves finding, teaching, encouraging, and keeping your employees, contractors, or partners happy. There are different ways and tools to do this, like hiring, training, checking performance, and paying wages. You can also use different ideas and tricks to make managing your team better, like creating a good atmosphere, giving rewards, or giving advice.
- Manage your operations: Running a business involves making plans, getting things in order, and making sure everything works smoothly. This is called managing operations. There are many ways to do this. For example, one can use project management to keep track of tasks, process improvement to make things work better, or quality management to ensure high standards. To make operations even better, one might consider using automation to speed up tasks, outsourcing to get help from outside, or streamlining to make processes simpler and more efficient.
- Manage your customers: Taking care of customers involves drawing them in, making them happy, and keeping them around. There are many ways to do this. For example, one can use a system to manage relationships with customers, provide good service to customers, or set up programs to reward loyal customers. To make customer care even better, one might consider dividing customers into groups, making things more personal for each customer, or interacting more with customers.
- Manage your marketing: Marketing is all about making and giving value to customers and people who are important to your business. There are many ways to do this. For example, one can use a mix of marketing strategies, a plan for marketing, or a campaign for marketing. To make marketing even better, one might consider doing research, trying things out, or making things better.
- Manage your risks: Risk management is about finding, checking, and dealing with things that could be a problem or a chance for your business. There are many ways to do this. For example, one can use a way of looking at risks, a list of risks, or a plan for dealing with risks. To make risk management even better, one might consider spreading out investments, getting insurance, or making a plan for what to do if something goes wrong.
Setting up a business in Australia is a thrilling and rewarding adventure, but it comes with its fair share of hurdles and duties. A series of steps must be followed to successfully start, launch, and expand the business. It’s also important to stick to all the rules, laws, and responsibilities that are relevant to the business.
This guide is hoped to have provided a detailed look at how to set up a business in Australia. It’s also hoped to have shared some handy advice, resources, and connections to assist along the journey.
For more assistance or details, the Business.gov.au website can be visited. This is the official online gateway for businesses in Australia. The Business.gov.au Contact Centre can also be reached at 13 28 46. This is a nationwide service offering free and private guidance and recommendations to assist in starting and operating the business.