Starting a business in Australia needn’t be overwhelming. I get it, there’s a lot to think about:
- Can you afford it?
- Will the business sustain you?
- If this is a side hustle, how will you juggle it alongside your life commitments — maybe even a full-time job?
- Exactly how much does it cost to start a business?
No doubt there’s a lot to think about, but the more you think, the more reasons you’ll find not to follow your dreams. That’s the last thing I want for you.
So, instead of overthinking, read through this comprehensive guide that includes a breakdown of startup costs, plus tips to manage those costs at every step. ·
Fixed costs to start a business in Australia
The fixed costs of your startup will depend on the type of business you start.
Freelancers can start a business for free, assuming they own a PC and have access to Wi-Fi.
Businesses that involve complex operations, products or digital assets like websites may need to spend more.
The cost of your business will be unique, but you can use the guides below to determine how much it costs to start your dream business.
Domain, website or online store
Most startups need a website either to:
- Trade and receive enquiries online or
- Show up in Google search and Google maps for local searches
That said, if you’re starting a service-based business, you may be able to drum up business without a website and associated hosting costs by using social media platforms like LinkedIn.
This would keep your start-up cost at $0.
Crafters looking to save on the ongoing hosting costs of a website can create an ecommerce store on Etsy and pay minimal fees to upload products. Then, you just pay a commission on sales.
Alternatively, you can start affiliate marketing on TikTok, which costs nothing to set up.
While free alternatives are great, if you’re lucky your business will likely grow to a point where you want a more robust online presence. At that point, you’ll need technology that allows you to accept online payments.
The first step is to get a domain name. This will serve as the web address for your website or online store.
In general, domain names cost between $2 to $17, depending on the deal you are getting and the number of years you decide to register the domain for.
Tips for managing the cost of your domains:
You have a lot of options, so spend some time exploring suffixes and pricing. Browse full list here.
A website host is required to get your site or online store on the internet and in front of customers. For this, you’ll need to get a web hosting plan or a website builder that comes with hosting.
Related: How to start an online business
Website design and development
For those who need to create a website, you can use an easy site builder like GoDaddy’s, which is free. This is perfect if you don’t intend to sell products online and really want to cut costs.
If you decide to you’d like to have a full online store that securely processes payments and ships items to customers, check out their online store builder.
If you’re not willing to create your website yourself, then don’t fret because there are affordable website design services to guarantee a website that you (and your customers) will love.
Tips for managing the cost of your website design and build:
If you want to save costs, commit a couple of hours to creating a website with GoDaddy’s free trial.
Read How to use a free website builder to make a website from scratch for step-by-step instructions.
I promise it’s easy and you might surprise yourself!
While you’re at it, consider creating a logo to display on your web pages and other business materials (e.g., email, shop window, van, etc).
Tools like GoDaddy Logo Maker are free and help you quickly nail this key piece of branding.
Related: How to make your own logo for free
Legal costs to register your business
Legal costs vary hugely between types of business (sole trader, partnership, company or trust) and the required legal cover. If you decide to create a proprietary limited company and you’re ready for the costs associated with registration, then you can expect to pay between $474 and $576.
Tips for managing your legal costs:
Focus on the essentials. As a new business owner, it can be tempting to cover your business from every angle, but that may not be required at the very beginning. Consider what’s a must-have to start up, then take note of what you can purchase later and when it’s needed.
Related: How to start a business in Australia
Promoting your business
Marketing is one of the most flexible costs when starting a business.
If you choose to work with a company like GoDaddy, you can have access to the following services.
|Content & Photo Creator||Free|
|Instant Video Editor||Free|
|GoDaddy Studio Creation Tool allowing you to use ready-to-edit templates to create website, social media and advertising content||$10.99/month*|
|SEO (search engine optimisation) Services||Call (02) 8042 8920 for a free consultation|
GoDaddy covers all the bases with Digital Marketing Suite. You can create and manage your business listings, social media posts, email marketing and your business reviews — all from one dashboard.
The good thing about marketing is that you can also do a lot of it yourself.
If you’re happy to manage social media platforms to drum up business, you can do well without spending a cent. However, it is time-consuming, so that time investment must be considered.
If you’re thinking about marketing your business with ads, then you need to consider the cost of the ads versus the benefits.
Generally, it’s not useful to start with a budget that’s too small simply because you won’t get the data you need to decipher a good ad campaign from a bad one.
Don’t start an ad campaign until you’re ready to commit.
Tips for managing your marketing costs:
Choose your marketing channels carefully. Do your research to find out which ones are likely to have the biggest impact. It’s better to cover fewer channels well than many channels poorly. After all, you can always scale once you’ve nailed one platform.
Variable costs to start a business in Australia
Some prices are incredibly variable depending on your location and the needs of your business. These items are listed below.
The beauty of starting a business today is that many businesses won’t need a physical location. But if you’re opening a brick-and-mortar store or plan to work in an office, then you’ll need to think about rent or mortgages.
Products or inventory
If you need to buy and hold stock, you’ll need to outlay an initial investment upfront. The cost will vary depending on the products. You can manage these costs by thinking carefully about what you’re likely to sell. Another consideration is what you can sell if you buy stock in bulk.
Tips for managing your product and inventory costs:
Ask suppliers about their minimum order quantity (MOQ) and how their costs vary based on quantity. Also, consider drop shipping — with this business model, you don’t manage inventory at all. You simply promote and sell products that are then shipped by another company directly to your buyers.
Staff costs depend on seniority and location. You’ll need to consider the minimum wage for your industry. If there isn’t one, you must pay at least the National Minimum Wage ($23.23 per hour at the time of this writing).
Tips for managing your staffing costs:
Businesses trading online can outsource work to talented new freelancers either locally or in different parts of the world. You can also take on more work yourself or turn to software and AI to support your business.
Beyond the initial registration, startups need to consider tax. The tax rules vary depending on your business structure in Australia.
Paying your taxes on time usually means:
- Putting a percentage of your income aside to cover them
- Monitoring and recording your expenses to account correctly for tax write-offs and/or
- Hiring an accountant to manage your taxes for you
Tips for managing your tax costs:
The more efficient you are, the less you need to pay an accountant. Many small businesses can manage their early tax returns alone, but a growing business will likely need an accountant eventually. Manage this cost by putting money aside regularly.
As a small business, you’re likely to have ongoing expenses. For example, you may not start with them but over time you’ll likely invest in subscriptions or software.
Or, you might have shipping to consider for e-commerce.
Your costs will vary based on your business requirements.
Tips for managing your ongoing expenses:
On-going expenses can creep up, so be mindful of monthly subscriptions and any software that you may have purchased. If you’re not using them all, you’re throwing away money.
Any business is likely to be hit with an unexpected cost eventually. Prepare for the unexpected by budgeting for it to get you out of an emergency. Unexpected costs could include your sickness, the need to hire a consultant to solve a problem fast or if you’re in a brick-and-mortar store, something could go wrong within the building.
How to fund your startup or small business
Getting funding for your new business is likely to be on your mind. Here are some common ways to find funding for your startup.
Funding your business on your own can be a safe option. It removes the stress of meeting investor expectations. It can also feel really good to know you built your new business with your own means.
That personal investment may require you to save for a few years before you get started or keep your day job during the first year or two. But having freedom from stakeholders can pay off by giving you complete control of your business.
Borrowing money through your contacts
Of course, you can ask to borrow money from your personal contacts, friends and family. If you choose to go down this route, it’s really important to treat the funds the same as a formal investment:
- Draw up contracts
- Separate your personal and business conversations
- Be very clear on the terms of the contract
Securing loans from banks is another option for funding. Generally, banks provide calculators on their websites so you can gauge what you might be able to borrow.
Be aware that it isn’t easy to get accepted for a bank loan.
The latest statistics show that half of Australian startup businesses in the last 5 years have failed, so banks are naturally careful which businesses they lend money to.
Doing your research and writing a detailed business plan can improve your chances of getting a chance at a bank loan.
Create a budget for your first year
Let’s take a look at various cost summaries for businesses with varying needs.
As you can see from this freelance service-based business cost summary, this is one of the cheapest businesses to start.
|Laptop||$0||freelancers can start with any laptop that they have access to.|
|Internet||$0||work from home and freelancers don’t need to worry about additional costs for wi-fi.|
|Social media||$0||Organic posts don’t cost anything and can generate leads and clients.|
Those starting a service-based business who want to look professional should consider a website.
Here’s what the cost summary can look like:
|Domain||$3.66*||Use a suffix like .site for that $3.66 cost|
|Create a website||$0||Get creative and build your own site with GoDaddy.|
|Website design services||Call 1300 736 088 for a free GoDaddy consultation||Optionally: choose another website design services.|
|Web hosting||From $7.95 for the first 12 months ($95.40 per year)* or FREE with any GoDaddy site builder||Renews at $351.35 per year.*|
Businesses you can start with a small budget
The digital world has opened a world of opportunity when it comes to starting a business for free or with a small budget.
Assuming you’ve got a PC, wi-fi and a desire to work or use social media to generate leads, you can start any of the following small business ideas for free:
- Freelancing in digital services like writing, SEO, PPC (pay per click advertising), social media management or email marketing.
- Freelancing on platforms like Upwork or Fiverr.
- Affiliate marketing through social media platforms like TikTok. You will need to gain 1,000 followers before you start making money from this.
- Consulting in a skill you already have (or can learn for free online).
Local services you can start with little to no start-up costs:
- Dog walking
- House sitting
Some businesses require a small budget to start. For example:
- Selling digital downloads on Etsy. You’ll pay a small fee to upload products, but then nothing until you make your first sale when you will pay a percentage to Etsy.
- Drop shipping
- Selling on eBay
- Printing (assuming you’re doing the printing)
Closing thoughts on starting a business in Australia
There are a lot of resources and technology that can make starting a business easier.
For example, learning how to write a business plan (with help from tools like ChatGPT) can easily jump-start your journey. You can also use this business plan template.
And while there might be expenses associated with starting a business, don’t forget the financial rewards that come with a successful venture. Keep that momentum going and make this the year you start a business to be proud of.
*Pricing data valid in November 2023. All prices listed are subject to change.