Got an idea for a business? With more and more Australians setting up businesses, it’s an exciting time for Australia’s economy.
Whatever business you are entering into, the success of a small business hinges on good planning, effective decisions and strong support networks.
Setting up will take time and can be complex. But here are a few simple steps you need to take when setting up your small business in Australia.
1. Decide on a business structure
Your business structure determines how you run your business, taxes you will pay and insurances you may be required to take out.
Common business structures used in Australia include:
- Sole-trader: an individual is legally responsible for business. Sole-traders can employ people. A sole-trader is a relatively simple business structure. The advantage of being a sole-trader is that you have control over how you operate your business. The risk is that you have unlimited liability, and all your assets can be seized to recover debt.
- Company: an entity that is legally separate from its shareholders, meaning it has the rights of a natural person, and can incur debt. Personal liability is somewhat protected, as the company is separate from the person.
- Partnership: more than one individual or company operating together.
- Trust: a person or company that holds property for other beneficiaries.
If you are unsure which business structure you need, refer to this Business Registration tool, or talk to an accountant.
2. Apply for an ABN and register your business
Once you have decided on your business structure, you need to register your business. You can apply for a business name, Australian Business Number (ABN) and tax registration at the Australian Government Business Registration Service.
You may need to apply for licences, such as environmental permits, importing and exporting permits and work health and safety permits.
Most businesses also register a website address.
3. Enquire about tax structure
Your business structure will determine how you need to pay tax. It is worth seeking financial advice early in your planning so you can determine which structure best suits your financial situation, or consult the ATO.
4. Apply for insurance
Your industry and your business structure will determine what insurances you need.
In general, insurance minimises your exposure to risk. Some insurances are legally required, such as workers’ compensation, public liability insurance and third party personal insurance. Use this link to assess which insurance you need.
5. Write a business plan
A business plan documents your key goals, objectives, target market, marketing plan and financial forecasts for your business. A tight plan will help you access suitable services, such as marketing assistance or financial support.
A business plan will also come in handy when you are applying for business loans, as the lender can see the direction your business is heading.
A business plan template can be downloaded here.
6. Discuss your lease options
Depending on the size and type of business you are growing, you may need a business loan for business development, property, equipment or vehicles.
A loan adviser who specialises in commercial loans can help you navigate the loan market, find the most competitive interest rates and payment schedules, and can manage the paperwork. Give me a call and we can discuss options and I can help you find the right provider.