In this blog, we look at how to start a business in Australia.
Australia is a land of opportunity, with a thriving economy, a highly educated workforce, and a supportive government that actively encourages entrepreneurship. Starting a business in Australia can be an exciting and rewarding experience, but it can also be a daunting prospect for those who are unfamiliar with the local business landscape.
Whether you are an Australian resident or an overseas entrepreneur looking to establish a business in this vibrant country, this blog will provide you with a comprehensive guide on how to start a business in Australia. From understanding the relevant legal and regulatory frameworks to choosing the right business structure and obtaining funding, we will cover everything you need to know to get your business off the ground and set it up for success.
But before we start, there are a few things to be sure of.
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. Discover your legal risks today.
Make Sure You’re Ready
The first step in starting a business in Australia is to make sure you’re ready. Starting a business demands a significant amount of dedication and hard work, which makes it crucial to understand all of the requirements and assess your suitability for entrepreneurship and self-employment.
We advise any budding entrepreneur to conduct a thorough self-evaluation and carefully consider the responsibilities and complexities that come with running a business to determine if they possess the essential qualities and skills necessary for success. Take the time to determine if you’re fully prepared to begin a business venture.
Do Your Research
When you’re considering starting a business, it’s vital to perform extensive research and really think about whether your idea will work. Here are some questions you can ask yourself to help figure that out:
- Is there a need or demand for your product or service?
- How hard will it be to turn your idea into a real business?
- Will you be able to make enough money to cover your costs and turn a profit?
- How can you make sure no one steals your idea?
- Who else is doing something similar to what you want to do?
By gathering and analysing this kind of information, you’ll be able to make a more informed decision about whether your business idea is worth pursuing, and you’ll have a better idea of what you need to do to make it successful.
Is Your Idea a Real Business or Just a Hobby?
Before registering as a business, you should verify whether your pursuits qualify as a business or a hobby. The classification you fall under determines the applicable tax, insurance, and legal obligations.
If you’re unsure which category you fall under, take a look at the government’s resources on distinguishing between a hobby and a business. This way, you can ensure that you’re meeting the appropriate legal and regulatory requirements and receive the necessary guidance to move forward.
With that out of the way, let’s get stuck in.
Decide on a Business Structure
Choosing the right structure for your business is an important decision that can have a significant impact on how your business is taxed, the type of paperwork you have to file, as well as many financial outcomes. This decision needs careful consideration as if you choose the wrong structure, it can result in tax penalties and unnecessary costs.
As a sole trader, you are solely responsible for all aspects of your business.
Establishing a company creates a separate legal entity from yourself.
Partnerships are formed by two or more people who share the business’s profits and losses.
Trust structures provide significant asset protection and tax benefits, making them a popular choice for asset holding and property investment.
Co-operative structures allow individuals to work together towards a shared goal.
If you are an Indigenous person looking to establish a corporation, you can register your business as an Indigenous corporation and receive government support.
A joint venture involves two or more parties entering into an agreement for a specific task or project.
Develop a Business and Risk Management Plan
To ensure your business stays on track and has a clear direction, it’s important to develop a business plan. Moreover, if you’re seeking financial support, a well-crafted business plan is a must-have.
By also creating a risk management plan, you can make informed business decisions and minimise the impact of unforeseen events on your company. This proactive approach can help you navigate any unexpected challenges that may arise.
Register Your Business
There are many aspects of a business that need to be registered, including the following:
Australian business number (ABN)
An ABN is a unique identifier for your business, used by the Australian Taxation Office (ATO), customers, and suppliers. Registering for an ABN is free of charge and is essential for your business.
A business name is how your customers identify your business from others. If your business name is different from your personal name, you must register it.
Tax registrations for your business
As a business owner, it’s crucial to understand the taxes that apply to your business. Your business type, activities, and turnover determine the taxes you must register for before you commence operations.
Licences and permits
Various licences and permits may apply to your business based on your industry and location. Examples include food licences, zoning laws, and more. Be sure to research which ones apply to your business to avoid legal troubles.
If you opt for a company structure for your business, you need to register it as a separate legal entity.
Trade mark (optional)
By registering your business name and brand as a trademark, you can prevent others from using it, safeguarding your intellectual property.
Get Legal Help
At Business Legal Lifecycle, we understand the risks businesses face when they operate without proper legal compliance and protection. If your business is not set up and protected, it could end up costing you valuable time and money in the long run.
That’s why it’s vital to start off right by taking the necessary steps to establish and protect your business. As legal professionals, we can help you navigate these complexities and ensure that your business is operating within the bounds of the law.
Don’t let legal issues hold you back – let the Business Legal Lifecycle team help you navigate the legal landscape and protect your business. Take our Legal Risk Assessment Test today, explore our Business Legal Lifecycle book, book one of our educational courses today, or, alternatively, simply contact us to discuss how we can help you.