Starting a business in Australia involves several key steps: research and planning, choosing a suitable business structure, securing funding, registering your business, launching, and establishing your presence.

Personal savings: Start with your own capital

Loans: Consider bank loans or government grants.

Investors: Seek funding from angel investors or venture capitalists.

● Australian Business Number (ABN): Required for all businesses.

● Register with ASIC: If you are starting a company, register with the Australian Securities & Investments Commission.

● Register for GST: If you are likely to exceed the GST threshold.

● Register for licences and permits: Depending on your industry, you may need specific permits.

● Choose a business name: Ensure it is available and suitable for your brand. You must register it with ASIC to secure the name chosen.

● Set up your finances: Open a business bank account and set up accounting software.

● Develop a marketing plan: Reach out to your target audience and build brand awareness.

● Obtain business insurance: Protect your business from potential risks. We recommend using BizCover to protect your business.

● Manage your cash flow: Track your income and expenses to ensure profitability.

● Understand your legal requirements: Stay compliant with all relevant laws and regulations.

● Stay compliant: Keep records correctly from the start.

● Leverage technology: Use technology to automate tasks and improve efficiency. We recommend the use of Xero Accounting Software.

● Hire the right people: If you need to, find the right employees to support your business. Check on WorkForce regulations and find out if you must process payroll or can pay subcontractors.

● Market your business: Promote your products or services to attract customers. We recommend the services of GonXLevel

● Sole trader: Simple structure, but you are personally liable for business debts.

● Partnership: Two or more people share ownership and liability.

● Company (Pty Ltd): Separate legal entity, offering limited liability to shareholders.

● Trust: Used for asset protection and can be complex.

A sole trader business is run by one person who is legally responsible for all aspects of the business. 

Advantages

● Inexpensive, simple to set up and easy to maintain

● Greater privacy than other types of structures—sole traders do not have to disclose their profits to the public

● Simple ownership and tax considerations—you personally own the business profits and assets. Profits are taxed at your personal income tax rate

Disadvantages

● Personal liability for all business debts in their entirety—in some cases, you can risk losing personal assets if your business fails

● Few tax concessions are available—tax is paid at your marginal tax rate (this may be higher than a company rate)

● Limited expansion opportunities

A business structure that comprises two or more individuals is known as a partnership. In this type of structure, all the partners share the business's profits, losses, and decision-making. The Partnership Act 1891 governs partnerships and sets out the rules and obligations for the partners, including joint liability for all business debts.

Advantages

● Partnerships are a cost-effective alternative to establishing a company.

● They offer simplicity in administration, with profits and losses shared among partners.

● Collaboration within a partnership allows for the pooling of resources and diverse expertise.

● Compared to other business structures, partnerships provide enhanced privacy as they are not obligated to disclose financial information publicly.

Disadvantages

● Unlimited liability: Partners are personally liable for all business debts.

● Pass-through taxation: Business profits are taxed at the partners' individual tax rates, which can increase as earnings grow.

● Restricted transferability of ownership: Transferring ownership requires unanimous agreement from all partners.

● Potential for conflict: Disagreements among partners can disrupt business operations.

In Australia, a company is a legal entity that is separate from its owners (shareholders) and directors. This structure allows the company to own assets, incur debts, enter into contracts, sue, and be sued. It also means that shareholders are generally only liable for the value of their shares if the company fails, while directors may be personally liable if they breach their legal duties. All companies in Australia must be registered under the Corporations Act 2001 and are regulated by the Australian Securities and Investments Commission (ASIC).

Advantages of a Company Structure

● Limited liability for shareholders: Generally, shareholders are only liable for the value of their shares.

● Separate legal entity: The company can enter into legal arrangements in its own name.

● Transferable ownership: Shares can be transferred to others.

● Lower tax rates: The tax rate for companies is generally lower than the highest individual tax rate.

Disadvantages of a Company Structure

● Increased regulation: Companies are subject to more regulations than other business structures.

● Less privacy: Some companies must disclose their financial information publicly.

● Higher costs and complexity: Companies are generally more complex and expensive to establish and operate than other business structures.

● Potential for personal guarantees: Directors or shareholders may be required to provide personal guarantees for company debts.

● Personal liability for directors: Directors can be held personally liable for company debts if they fail to meet their legal obligations.

● Double taxation: Company profits are taxed, and shareholders may also be taxed on dividends.

A trust business structure is a legal relationship where a trustee (individual or company) conducts business on behalf of beneficiaries.

Advantages

● Asset Protection and Limited Liability: Protects business assets and limits liability.

● Separation of Control and Ownership: Beneficial for protecting assets or income, especially for young people or families.

● Beneficiary Protection: Generally, beneficiaries are not liable for trust debts and pay tax on income at their individual marginal rates.

Disadvantages

● High Establishment Costs: More expensive to set up than sole traders or partnerships.

● Complexity: Requires professional advice due to intricate legal structures.

● Strict Trustee Obligations: Extensive regulations and obligations for the trustee.

● Profit and Loss Limitations: Losses cannot be offset by beneficiaries, and retaining profits for expansion may incur penalty tax rates.

When starting a business, it is crucial to have a clear understanding of your start-up costs and a realistic budget. A lack of funds, particularly in the initial 6-12 months, is a common reason for new businesses to fail. Careful planning and budgeting for expenses can significantly increase your chances of success.

Essential Start-Up Costs to Consider:

● Market research

● Preliminary financial advice or general business advice

● Compliance costs, such as licenses and registrations

● Tenancy or leasing bonds, transfer duty, and lease agreement advice

● Telephone and internet

● Insurance

● Power connection and bond

● Marketing and website development

● Equipment, fixtures, and fittings

● Staffing and wages

● Initial materials and stock purchases

Remember to include a 10% safety buffer when calculating your costs to account for unforeseen expenses. Your specific start-up costs will vary depending on your business type and industry.