Starting a Business?
So you'd like to start your own business. Congratulations.
Join the 2,065,523 other small businesses in Australia employing less than 19 people, that make-up 97 per cent of all Australian businesses by employee size (ASBFEO "Small Business Counts").
It's not difficult if you know these EIGHT simple steps.
1. Choose your Business Structure
- A business structure is also known as your entity name
You can operate a business informally as a sole trader (individual) entity.
In a Partnership with one or more other individuals
By forming a company which will need to be registered with ASIC (the Australian Securities and Investments Commissions - regulator) or
as a Trust. A Trust is a structure where a trustee is nominated, who is then responsible for looking after the assets of the trust for the benefit of the members of the trust. The trustee can be an individual or a company.
2. Choose a Business Name
- Choose your business name that you would like to be known by your customers as, for example:
if you run a bookstore and serve coffee - you could have a business name such as BOOKS & COFFEE; or SHOES & MORE (if you sell shoes and apparel); or OUR LOVELY RESTAURANT (if you sell delicious food and delicacies made by you).
Your legal entity (
3. Business registrations and licences
ABN and TFN
Every business in Australia must have a unique numerical identifier - the Australian Business Number (ABN). You cannot operate a business without one.You will also need a Tax File Number (TFN) so you can claim deductible expenses against your income when you lodge your annual tax return. You'll need a business TFN only if you are a company or a trust.
If you think you'll have revenue (income from business) of more than $75,000 you will need to register for GST. Most businesses hope to earn more than $75,000 - otherwise why bother running one?
You will need to register for PAYGW (if you are going to hire staff and do payroll), and superannuation.
You can do search for licences for your industry at the Australian Business licence and Information Service (ABLIS).
4. DOMAIN NAME
Once you have your business name registered - like booksncoffee or shoesandmore - you'll most need to register a DOMAIN NAME name and get web hosting. A domain name allows people to find your business on the internet. It's important to create a brand for your business and a domain name like booksncoffee.com.au, or shoesandmore.com is an important part of letting your customers know that you are open for business. WEBHOSTING is basically renting space on a super computer that will store your website. EMAILS. You also usually get email addresses using your domain name as part of the service. You could get by with a free hotmail or gmail account but that's not very professional, right? Contact us if you'd like to find out more.
5. OPEN A BUSINESS BANK ACCOUNT
With your ABN and/or company extract you're now ready to open a Business Bank Account. Even if you are a sole trader you should keep your personal and business finances separate, not mixed together. How else will you know how well your business is faring?
You should get business insurance policies that cover small businesses, to protect your assets and against legal liabilities. WorkCover is insurance for employers if their employees are injured or become ill because of their work. It's compulsory for employers to have WorkCover insurance.
7. BUSINESS & MARKETING PLAN
Business and marketing is so important for a business with limited resources (like money), and a strategy helps you to put dollar amounts on the various activities you need to carry out. Your investors, or the bank will need to know what you want to do with the money and how they'll get their return. It makes good business practice to plan ahead and not to go about doing random activities hoping one of them will work.
8. AN ACCOUNTING SYSTEM
How important is it to keep records, invoice customers, pay bills, forecast cash flow, and pay your taxes (GST, PAYGW, Income Tax)?
An integrated accounting system helps you comply with all these regulations effectively and also give you the information to make better financial decisions for your business. It's like the trip meter to measure your business success. You'll need one.