Got a great business idea? Here’s how to start a business in Australia

Ready to take the next step and start your new business? Congratulations! You’re joining the ranks of the over 2 million small businesses in Australia.

So, what do you need to start a business? We’re asked things like this all the time, so we’ve compiled this small business starter kit answering questions we receive to help you get started.

How do I know if my business idea has legs?

Spend some time researching and talking to your target audience to find out if your idea is something they’d be interested in. If this sounds daunting, start small using some of these tips on how to do market research. Talk through your idea with your friends and family; they’ll most likely help you refine your pitch, (but if they aren’t your target audience, don’t let their opinions sway you too much!).

How do I decide what to call my business?

Don’t get too attached to your business name until you check that no one else has pipped you to the post. This tool not only checks if your proposed business name is registered, but also suggests available website domains for that name or if it’s been trademarked.

It’s also important to see if your business name is available across social media platforms: use this tool to see if you can get the same handle across the places your target audience hang out online.

How do I choose a business structure?

The next step is to decide what business structure is appropriate (not just for this week, or this year but thinking long term). We recommend talking to us about this before you go down the path of actually registering, to make sure you don’t go down a path that’s hard to reverse later on. Ideally you want to pick the structure of the business you strive to have, not the one you’re starting out as.

We’ve helped many businesses navigate changing their structure down the track, and many others manage the consequences of having chosen the wrong structure. Often business owners find out the hard way:when they’re at risk of losing their home due to their personal liability for business debts, or they’re not able to distribute profits how they hoped, or that they’re paying way too much personal tax.

How do I register my business?

After you’ve chosen your business name and structure, there are a number of crucial registrations to make, including:

• An Australian Business Number (ABN)
• A business Tax File Number (TFN) if you’re not operating as a sole trader
• Goods and services tax (GST), if you expect your revenue to reach the $75,000 threshold (If you’ve never run a business before, we can help you work out whether you need to register for GST – but it can be beneficial to register anyway because then you can claim the GST back)

There will be loads of paperwork to do alongside your registrations, so we recommend getting expert help (whether that’s from accountants like us, or a lawyer that specialises in business structure and advisory) to make sure it’s all done properly.

This is one of those situations where just because you can do something yourself, doesn’t mean it’s the right thing to do!

How do I finance starting my business?

Starting a business can be expensive, and not everyone has the spare cash in their back pocket to get them up and running. It’s important to make a business budget that covers every expense you can anticipate in your first year of business, and do your best to create a cash flow forecast for your first year too.

Thankfully, pretty much every bank offers business loans, but there are a few things you need to consider before applying, which you can have a read of here. If that list looks intimidating, don’t worry; we can help you work out what your financial limits should be and what type of loan is right for you.

A common mistake people make is treating their company’s money as an extension of their personal bank. This is a big red flag and will result in unnecessary compliance costs or tax bills. Talk to us if you want help navigating how to manage your business finances and personal finances as a business owner (it can get complicated, so it’s always better to get advice!)

How do I keep track of my business expenses and profits?

We recommend checking out Xero accounting software. It’s what we use, and it’s what we recommend our clients use. There are several large cloud accounting platforms you can choose from in Australia – all have their strengths and weaknesses – but we love Xero because of how easy it is to automate invoices, payment reminders, bank reconciliations and more.

It also integrates really well with other platforms businesses use across their operations, including job management and point of sale (POS) systems, payroll, and everything in between. From the outset, make sure you’re keeping ALL the receipts for any expenses you incur starting and registering your business – you’ll need these for compliance, including tax time. We recommend our clients use a receipt tracking app to do this (just trust us on this!).

Do I need an accountant to start a business?

Honestly, no… but also yes. While you know your business idea back-to-front, what you don’t know is business structures, GST registrations, ABN registration information, what things might cost, what margins you need to make to pay everything, what software to use so you don’t end up using programs that don’t connect to each other and end up wasting your time… and nor should you! Knowing this stuff isn’t your job; it’s ours.

Getting help from an accountant who specialises in helping businesses start, grow and scale (🙋)  will help you future-proof your business, and prevent you from making mistakes early on that may be difficult to fix down the track. As with everything else in life, it’s important to remember that you don’t know what you don’t know.

Want to know how much it will cost to get help setting up your business or having an expert set of eyes keeping an eye on your books? Try our pricing calculator now.

Check out our pricing