Learn how to start your own business in Australia with our essential guide.

So you’ve got a winning product idea or a marketable skillset, and you want to start your own business. These are exciting times indeed, but you’ll also face many challenges ahead. You’ll need passion, tenacity and resourcefulness, but you’ll get to be your own boss and have the chance to pursue success on your terms.

The process for setting up a new business venture varies from country to country. Here, we’ll cover the basic checklist for how to start a business in Australia. This will include everything from choosing a business structure to registering with the government.

We’ll also look at how you’ll manage your business finances. This is where time and money-saving solutions such as Wise come in. Open a free international business account and you can send, spend and receive payments in multiple currencies at the real exchange rate. If your new business plans to trade internationally, you’ll find that Wise is a whopping 19x cheaper than other payment services such as PayPal.¹

There’s seamless integration with accounting tools such as Xero, plus a powerful open API so you can connect all your favourite business tools and automate payments to save you time.²

But before that satisfying moment you receive your first customer payment, you’ll need to cover the basics of setting up your business.

Starting a business: the basics

Preparation is everything when it comes to entrepreneurial success. Don’t rush this stage, as it’ll lay the groundwork for each stage of setting up your new business. You’ll need a solid business plan and in-depth market research, so you can be sure that a) there’s a market for what you want to sell and b) that you understand your target clientele.

The next stages are to decide on a legal business structure, to register with the relevant authorities and work out how you’ll cover startup costs.

Other basics include insurance, licences, permits and employees, unless you’ll be the only member of your fledgling business.

Last but not least, branding and marketing – how will you get the word out to new customers about your business? These are all crucial things to be thinking of at this early stage, but there are many other items to add to your ‘to-do’ list before your company gets off the ground.

How to start your own business - what is required?

If you’ve carefully refined your idea and are confident about your business plan, it’s time to bring your new venture to life. If you plan to start a new business in Australia, here are the key steps to follow:

1. Choose your business structure

This is a legal requirement which will affect everything from the tax you pay to the level of control you have, plus your personal liability. In Australia, you’ll have the choice of: ³

• Sole trader – you have complete control, receive full profits and are personally liable for any business debt
• Company – you have limited or no control of company affairs, but are not personally liable for company debts. Companies can be more expensive to maintain, but you may find it easier to raise capital.
• Partnership – you and your business partner(s) will be personally liable for business debts, which includes your partner’s shortfalls. However, partnerships tend to be easy and inexpensive to set up and dissolve.
• Trust – you’ll choose this option if your business is in possession of property or income for the benefit of a third party. Trusts can be expensive to set up, you can’t distribute losses and profits will incur certain taxes, but you can protect your assets and have less liabilities with this business model.

You’ll also need to select a business type (i.e. online business, independent contractor) and look into the legal obligations and rules surrounding each.

Lastly, think about where your business will be based. Will you hire office space or use coworking facilities, or save money and run it from home for now?

1. Register with the government

To legally start a business in Australia, you’ll need to register your business name (once you’ve settled on one, of course) and get an Australian Business Number (ABN). This is a unique 11-digit number which identifies your business to the government⁴.

You’ll also need to register for tax, taking the time to understand the obligations and regulations for your business type. For example, you may be required to register for Goods and Services Tax (GST) if you have a turnover of $75,000 or more, or Pay as You Go (PAYG) withholding tax if you plan to have employees⁵.

While you’re doing this research, it’s a smart idea to learn the laws in your chosen industry, including fair trading laws and contract terms. Now is also the time to set up a robust record-keeping system.

1. Get a business website and set up social profiles

To make sure your web address matches your official business name, register for your domain name as early as possible. While you’re working on creating an amazing website, why not set up social media profiles for your business at the same time? You’ll need to develop striking branding that represents your business personality and appeals to your target audience.

1. Set up your finances

Every business needs a bank account, and a clear, logical way of organising its finances. Make a plan for managing a budget and cashflow, and dealing with payments and invoices. Will you use an accountant, or get to grips with accounting software yourself?

You’ll also need to develop a pricing strategy for your goods and/or services, plus work out how you’ll cover your initial business startup costs and expenses. You might need to look into loans or other funding.

1. Protect your business

Business insurance is crucial, but you need to make sure you get the right policy to cover everything you need. Remember – the cheapest quote isn’t always the best choice. It’s also a good idea at this stage to make an emergency plan for worst-case scenarios (i.e. data loss, financial crash, the loss of a business partner).

Is it possible to start your business online?

The good news for budding entrepreneurs is that in Australia, you can do many parts of the process online. At the government’s Business Registration Service website, you can register your business and get your ABN, register for GST and other taxes, and apply for licences and permits – all in the one place, and without leaving your home⁶.

Other things you can do online include registering a domain name, setting up your social profiles, signing up for accountancy software and getting business insurance. You can even learn how to start an online business, by setting up a show-stopping webshop and mastering the basics of ecommerce.

In theory, you can kick off most processes for starting your own business all in one day. You will, of course, need to wait for everything to be processed and approved.

And while you’re ticking things off your list, sign up for a free Wise Business account online. After just a few easy steps, you’ll be all set up to send and receive money internationally, saving money by getting the real exchange rate on every transaction.

You’ll also get a linked Wise Platinum Business Mastercard⁷ so you can cover all those initial expenses.

Here, we’ve covered the basics of how to set up a business in Australia, but you’ll inevitably find yourself with many other pressing issues to sort out. For example, hiring employees, managing suppliers and developing a marketing strategy.

But complete the above and your business will be a legally registered, official entity ready to spring onto the market. Good luck, you’re going to do great.

Sources used:

Sources checked on 19-May 2020.