How do I start a small business in Australia?
Starting a business in Australia is exciting, but let’s be honest, it can feel like wrangling a kangaroo in a wind tunnel. Here’s a short guide to help you hop through the key steps:
- Before you start a business
- Define your business
- Plan your business
- Register your business
- Organise your finances
- Build your brand
- Protect your business
How to start a small business in 7 steps
1. Before you start a business
That’s awesome, you’ve decided to start a business. That’s exciting, but a little bit daunting too! It takes serious effort, smart planning, and plenty of persistence to run a business, so before you jump in, make sure you understand what’s involved and feel confident that you’re ready to take the leap.
Analyse your competition to determine if there is a gap in the market for your business. If the market is flooded with similar businesses, ask yourself, ‘How can I stand out from the competition?’. This is vital in determining if there is a viable opportunity for your business idea.
Research and understand your ideal target market to identify your potential customers and find out if your idea is in demand and will meet the needs of your target market.
Puro Design can perform online research for your products and services to help you gauge your online market and competitors.
2. Define your business
Decide if it will be a business or a hobby (yes, the ATO cares)! Businesses and hobbies have very different obligations for tax, insurance, licenses, permits, record keeping and reporting, so it’s important to understand this:
- A business is usually something you do to make a profit.
- A hobby is something you do for fun, although you might sell your work to cover your costs.
It’s essential to work out if you are a contractor or an employee, as both have different insurance, tax and superannuation responsibilities. Sometimes, businesses will treat an employee as a contractor to avoid their responsibilities. This is called sham contracting and is illegal.
- A contractor is the boss and can work for more than one client at a time. They often use their tools and methods to do their work.
- An Employee works in someone else’s business. The employer controls how, where and when they do their work.
You need to decide on the legal structure of your business, because, yes, you’ve guessed it…there are different legal and tax obligations for each.
- As a Sole Trader, you’re the boss. It’s the easiest setup and gives you full control of your business.
- A Company is a separate legal entity. It’s more complex, but it helps protect your personal assets if things go pear-shaped.
- As a Partnership, two or more people share the business and split the profits (or losses).
- A Trust has a Trustee (a person or company) who holds your business for the benefit of others (the beneficiaries) and is responsible for everything relating to the business operations.
- A Co-operative has at least five people who own and run the business together for the benefit of all members.
3. Plan your business
Market research helps you understand your customers, your competition, and your industry inside out. Here’s why it’s worth doing:
- It shows you where and how to focus your marketing efforts.
- Helps shape products or services that your customers want.
- Gives you the insights to make smarter, lower-risk decisions.
- Helps develop your Business Plan.
- Helps to build a brand that gets noticed.
Puro Design can perform online research for your products and services to help you gauge your online market and competitors.
Writing a simple business plan (no need for a novel) will give your business direction.
- Define your objectives,
- How you’ll achieve your goals,
- Outline your products and/or services,
- Map out your finances,
- Identify any possible risks,
- How you’ll attract and retain customers.
4. Register your business
In Australia, it is a legal requirement for a business owner to register an Australian Business Number (ABN) with the Australian Business Register (ABR). If you are registering a company, you will also need an Australian Company Number (ACN). An ABN is an 11-digit number unique to an enterprise or business. The number is used to identify a business when they’re dealing with the government, other businesses, and the public.
You’ll also need one if you want to register a business name, a website domain or use digital services like eInvoicing. It’s free, and pretty easy to do so.
A good business name helps you create a strong brand, and a unique, catchy name is easy for customers to remember. If you haven’t decided on a name, learn how to pick a good business name here.
You need to register a business name if it’s different to your own name.
Research your preferred business name to make sure your competitors don’t already have it, and also search the Australian Business Register to make sure your business name isn’t already in use.
Before you set your heart on a business name, research domain name availability to ensure you can secure a matching domain for your email addresses and future website. Puro Design can search the domain name registry for you to avoid any heartbreak!
Also, research social media handle availability to ensure you can secure matching social media handles for your business.
Once you have settled on a business name and you have your ABN, you can go ahead and register it with the Australian Government Business Registration Service.
5. Organise your finances
To succeed, you will need to organise your finances properly to build your empire.
- Calculate your start-up costs and running costs for the first 6 months.
- Ensure you have enough funding set aside to get started; you may need to apply for a Government Grant, Finance or source an investor.
- Open a business bank account.
- Set up accounting software (Xero is a popular choice).
- Understand your tax obligations and register for GST if needed.
- Talk to an accountant or other financial professional.
6. Build your brand
Every business, big or small, needs an effective brand identity design that positions their business as the only solution to a client’s problem. A Brand Identity is how your business looks, feels, and speaks to the world. Think of it as your brand’s personality, made up of your logo, colours, fonts, imagery, tone of voice, and overall vibe. It helps customers recognise you, remember you, and trust you.
Firstly, build a Design Brief that clearly outlines your preference for design styles, the image you would like your brand to portray and the emotions that you would like onlookers to experience.
Secondly, connect with a Brand Specialist (such as Puro Design!) who will expand and explore your options for the perfect Logo and Brand Identity for your business.
7. Protect your business
Having the right licences and permits isn’t just ticking boxes; it’s about making sure your business is legal, safe, and trusted. Different industries have different rules, so it’s important to check what applies to you. It could be anything from a food handling permit to a home-based business approval.
When it comes to insurance, think of it as your safety net. Public liability and professional indemnity can protect you if something goes wrong, whether it’s a customer injury or a service dispute. It’s peace of mind for you, and reassurance for your clients.
Registering trade marks and copyrights helps safeguard the unique parts of your business, like your logo, name, content, and products, from being copied or misused. It is not essential to have registered trade marks and copyright, but it does give you legal rights, builds trust with customers, and helps your brand stand out without the risk of someone else cashing in on your creativity.
Starting a small business in Australia isn’t just about ticking boxes; it’s about building something that reflects your passion, purpose, and potential. With the right plan, support, and brand identity, you’ll be ready to launch with confidence. When you’re ready to bring your vision to life, Puro Design is here to help you build a brand that feels as good as it looks.
