UPDATE: This how to start a business post was originally published on 3 December 2019 and updated on 13 January 2021.
You’ve decided it’s time to go out on a limb, pursue your dreams and become your own boss. There’s tonnes to learn, but where to begin? No worries — this post will walk you step by step through how to start a business.
From deciding what to sell to registering with the government and making your first sale, it’s all here.
1. Pick a product or service
It’s easy to get caught up in the hype of starting your own business, but you really should do some research before diving in too deep.
If your product/service is already being offered and has fierce competition, you need to know that now.
That great business idea you thought up in the shower might or might not be worth pursuing.
So start off doing your homework. Find out everything you can about what you’re hoping to do.
Have you found a need that no one else is meeting? Or are you one of countless many to offer this particular product or service? Be open to feedback from those in the know to increase your chances of success.
Above all, if your first idea is already being done very well, let it go.
Easy businesses to start
Here are a few examples of easy businesses to start:
Some of these require special skills, but all except the online store can be started with a modest outlay of money.
2. Choose your business structure
Choosing the right business structure is important, as each of the four options below have pros and cons. Which one you choose affects your:
- Ongoing cost and amount of paperwork.
- Number of licenses needed.
- Personal liability (in case the company is sued or goes bankrupt).
- Level of control.
- Tax obligations.
Australians have these business structures to choose from:
As a sole trader, you are legally responsible for all business debts or losses. You must pay super for all workers (except yourself).
A company has higher setup costs and more paperwork. This structure is run by directors (you) and owned by shareholders (those who fund your business). You must pay super guarantee contributions for any eligible workers including yourself.
A group of people who run a business together, with the partners sharing income, losses and control. This is inexpensive to set up and run.
This is an entity that holds property or income for the benefit of others. This can be expensive, as it requires a formal deed. There are also yearly administrative tasks for the trustee.
Keep in mind that you’re not locked into any one structure; you can change the structure as your business grows. If you’re not sure which one is right for you, talk to a tax, business or legal adviser.
3. Apply for an Australian Business Number
Applying for an Australian Business Number or ABN is the next step to setting up your own business — it’s also free. Your 11-digit ABN is different from your Tax File Number. An ABN makes it easy for the government and other businesses to identify your business.
Check this website to find out which (if any) other business registrations you need.
4. Decide on a business name
Before settling on a name for your business, jump on the ASIC Connect website to search the Business Names Register. There’s no point in choosing a name that isn’t available.
Once you’ve chosen a business name, register it here. If you’d like to keep others from using it, register a trademark. This gives you the exclusive legal right to use, license and sell your trademark.
5. Register your website domain name
If you’re serious about your small business, you’ll want to build a website.
More and more Australians are looking online for everything from the nearest Thai takeout to where to buy gifts. A website is a good way to make sure your business shows up when they search.
Every website needs a domain name. Listen to learn more:
True, many site builders offer free domain names like YourBusiness.GoDaddySites.com. But if you intend to make this venture a success, you’re better off with a website domain name of your own.
A couple of golden rules apply when choosing a website domain name. Ideally, it should:
- Describe your business.
- Be easy to spell and remember.
- Not contain abbreviations, dashes or numbers (unless there’s a number in your company name).
As with business names, you won’t be able to use a domain name that someone else is using. Find more tips on choosing a great website domain name here.
Check to see if the name you want is available now!
6. Arrange start-up funding
It takes money to make money and this is especially true for start-ups. Luckily, you have some options here.
One option is to start your business on the side of a full-time job. This way, you’ll have a steady source of income while you test the waters with the new business.
Another option is to borrow money from your own savings or from family, friends or investors.
Australia has many grants and funding support programs to get your business off the ground.
To track down funds that apply to you, search the internet for grants in the state where you’ll operate your business (for example, “Grants Victoria”).
7. Find your first client
Congratulations! Your business is up and running and you’re eager to start earning money. But where do you start?
- Your own network of family and friends is a good place to begin. Let everyone know about your new business, what you do and why you’re better than similar businesses.
- Use LinkedIn’s professional network by creating an engaging profile and connecting with potential clients.
- Claim your Google My Business listing and fill it out completely. This will also put your business on Google maps.
- Set up a Facebook business page to promote your products or services. You can even sell directly from Facebook.
- Join a business network and start making connections.
You can also look for local business directories that will list your business, including your website domain name.
Consider this your start-up checklist
Really, setting up your own business in Australia is as easy as 1-2-3. Just follow the seven steps and enjoy the rollercoaster ride, with its ups and downs. We’ve even offered a couple of suggestions for easy businesses to start.
Whether you work out of your garage or rent a storefront, starting your own business can be a life-fulfilling adventure. Best of luck to you!