Start your business in Australia
Setting up your own business is exciting, but can also be challenging if you’re not prepared. This official guide will take you through each step of starting a business and help you understand what’s ahead.
The decisions you make early on can affect many areas of your business, including the licences you need, how much tax you pay and the volume of paperwork required. You need to make the following key decisions:
- Decide on a business structure
- Choose your business location
- Choose a business name
You’ve analysed your idea and yourself. Next you can plan your future and see how it all comes together. Here are what you need to plan:
- Develop your business plan
- Create your risk management
- Write your marketing plan
- Develop your export strategy- If applicable
Download the business plan templates below:
Find resources to help you with your business, from general business advice to finance assistance and support for your mental health and wellbeing. You don’t have to do it alone — working with an experienced business adviser or expert can help solve business problems, connect you to funding and grow your industry networks.
To make it official, you’ll need to register. This makes sure your business gets taxed at the right rate, avoids penalties and protects your brand and ideas.
Register your business ABN
An ABN is a number that identifies your business. It doesn’t replace your tax file number
- identify your business to others when ordering and invoicing
- avoid pay as you go (PAYG) tax on payments you get
- claim goods and services tax (GST) credits
- claim energy grants credits
- get an Australian domain name
Register your business name
A business name is the name your business operates under.
Your business name identifies you to your customers and allows you to differentiate yourself from your competitors. A business name helps your customers to make an emotional connection to your business and brand.
1) Tax file number (TFN)
You must have a TFN regardless of the type of business you’re starting. If you plan on running your business as a sole trader, you can keep your individual TFN. If you’re operating as a partnership, company or trust, you’ll need to register a separate TFN for the business– external site
2) Australian company number (ACN)
If you register your business as a company, you’ll be given an ACN by the Australian Securities & Investments Commission (ASIC). You’ll need to apply for your ACN before getting an ABN.
3)Goods and services tax (GST)
GST registration is compulsory if:
- your business or enterprise has a GST turnover of $75,000 or more
- your non-profit organisation has a GST turnover of $150,000 or more
- you provide taxi or limousine travel including ride-sourcing services for a fare. This applies regardless of your GST turnover
- you want to claim fuel tax credits for your business, regardless of your GST turnover
If you are a non-resident there are special rules that may apply to you.
Otherwise, registration for GST is optional.
GST applies to most retail sales to Australian consumers of imported:
- digital products (including movies, apps, games and e-books)
- goods worth A$1000 or less
If your overseas business has a GST turnover of A$75,000 or more from these sales, you must register for GST. You may not need to register for GST if the only sales you make are made through an electronic distribution platform.
You can find more about tax on retail sales of goods and services into
4) Pay as you go (PAYG) withholding
You must withhold an amount from payments you make to:
- some contractors you have a voluntary agreement with
- businesses that don’t quote their ABN to you
In each case, you must register for PAYG before you can withhold that amount. You must provide the withheld amounts to the ATO, report those amounts regularly on your activity statements, and then lodge a PAYG withholding annual report confirming your total withholding.
Your requirements may be different for amounts your report and finalise through Single Touch Payroll. Find out more about Single Touch Payroll– external site at the ATO website.
5) Payroll tax
Each state and territory government collects payroll tax on the wages employers pay each month. You’re only liable for payroll tax if your total Australian wages exceed the tax-free threshold in the state or territory that your staff are in.
6)Fringe benefits tax (FBT)
Providing perks, or certain benefits, to your employees (including employees’ associates such as a family member) can attract FBT. This includes providing:
- a car for private purposes
- goods at a discount
- low interest loans
- Christmas parties
- reimbursement for private expenses, such as school fees
You should register for FBT as soon as you decide to start providing fringe benefits to your employees.
Australia– external site on the ATO website.
Register licences and permits
You’ll need licences and permits to get approval to do certain activities. Find licences and permits for your business type.
Licences and permits either:
- give your business approval to do an activity, or
- help protect your business and employees
A trade mark is a way of identifying a unique product or service such as a business name or logo. Learn more about a trade marks, what you need to do before you register and how long protection lasts.
A trade mark is a way of identifying a unique product or service. It can protect a:
A trade mark is not the same thing as a company name, business name or domain name. However, you can have exclusive rights to your business name by protecting it with a trade mark.
It’s essential to take charge of your business finances and know how to manage your cash flow. There are different options for finance depending on what you want it for.
Cash flow fluctuations
Needing assistance with cash flow is one of the most common reasons businesses seek finance. Before you go ahead, make sure to carefully analyse your business finances so you know how much you need.
Some of the finance options to help with cash flow include:
- overdraft facility
- line of credit
- fully drawn advance
- invoice financing
- loan/cash flow lending
- trade credit from suppliers
- credit card (be careful – they should only be used to fund very short-term working capital needs).
Develop a pricing strategy
Pricing is a crucial element of business. Find out what you need to consider when you price your products and services, including the types of pricing strategies, legislation obligations, what your price should include, and where to conduct research.
There are a number of pricing strategies you can employ when setting your price, including strategies based on:
- perceived value
When choosing your pricing strategy, keep your overall marketing strategy in mind to ensure your strategies complement one another.
Finding out your business isn’t entirely above board can cost you time and money. Start off strong by setting up and protecting your business legally.
When you agree to do a job for another person or business, you’re probably entering into a commercial contract.
A contract refers to a commercial contract made between a contractor and a hirer:
- Hirer refers to the person or business that engages a contractor. Sometimes, a contract or a law will refer to the hirer as a ‘principal’.
- Contractors include people who describe themselves as ‘self-employed’, a ‘consultant’ or a ‘subcontractor’.
A commercial contract may be for:
- your labour or skills where payment is based on hourly or daily rates
- you to achieve a result where payment is based on a fixed fee.
You invest too much time and money in your business to lose it. Protect your investment by planning ahead.
Having the right insurance can help to protect your business, your customers and your income. Understand the different types of insurance and which ones you need for your business.
Types of business insurance
Your business may require certain types of insurance, either:
- by law (such as workers’ compensation insurance), or
- because people you deal with may require it (such as public liability insurance to get a market stall).
Other types of insurance are your choice, but can be an important way to reduce business risk and protect things like your:
- business assets (such as equipment, premises and stock)
- business owners
Some forms of insurance are required by law.
- Workers’ compensation insurance is compulsory if you have employees.
- Third party personal injury insurance is compulsory if you own a motor vehicle. This is often part of your vehicle registration fee.
- Public liability insurance covers you for third party death or injury, and is compulsory for certain types of companies.
Getting on top of your taxes now can make things easier in the long run. It can help you avoid penalties and make sure your business is taxed at the correct rate.
Running a business can be unpredictable, but a good record-keeping system can make things easier. On this page you’ll learn about record keeping – what you need to keep, how to keep records and how long to keep them for.
You must keep records of all transactions related to your business’s tax and superannuation affairs, including records that support the information you include in your tax returns and reports– external site.
The records you need to keep depend on the tax and superannuation obligations of your business and the structure of your business (sole trader, partnership, company or trust).
The Australian Taxation Office (ATO) requires that:
- Your records must not be changed and must be stored in a way that restricts the information from being changed or the record damaged
- You need to keep most records for five years, starting from when you prepared or obtained the records, or completed the transactions (or acts they relate to), whichever is the later
- You need to be able to show the ATO your records if they ask for them
- Your records must be in English or able to be easily converted to English
We recommend you check the record-keeping requirements of all organisations you deal with
Taxation for your business
Understanding tax requirements ensures your business is taxed correctly and avoids penalties. Get an overview of the tax requirements for your business including record keeping, registering for taxes and your options for paying.
Setting up your business operations properly will save you trouble in the long run, and give you more time to focus on running your business.
Buying and selling online
Taking your business online whether that’s creating a website, blogging or social media, can mean new opportunities and benefits for your business. Understand the basics of buying and selling online.
Buying and selling online is known as e-commerce (electronic commerce), online trading or online shopping. Sometimes e-commerce can also involve a good or service being traded for another good or service. As a business, you could offer e-commerce on websites, social media and mobile apps (often known as ‘in-app’ purchasing).
Suppliers are a crucial part of your business. Find out how to find suppliers, negotiate contracts, build and maintain relationships and resolve disputes with suppliers.
A supplier sources items at a suitable price for your business. They supply your business with the right materials, products and/or services for you to conduct business.
Suppliers don’t only supply your business with products and other physical supplies — they may also supply a service to your business, including:
- banking and financial services
- utility services
- property suppliers
- internet and phone services
- insurance products.
Promote your business and brand to your target audience to grow your customer base.
Set up a business website
Having a business website allows you to display details of your products or services and get your brand out to your audience. It can become your shop front, available to customers all over the world.
A website can be important to your business’s success and growth. Some of the benefits of having a website for your business may include:
- giving your business a digital shopfront
- allowing your business to be open 24 hours a day, 7 days a week
- reaching a global audience
- helping your customers to access your products or services anywhere, anytime
- using it for marketing to sell and promote your products and services
- increasing customer engagement
- creating or enhancing your brand and reputation
- improving your business productivity and efficiency.
It’s important to do your research before you develop a business website. Choose an option that is useful and targets your products and/or service. To stand out from other businesses, you’ll also need to find a way to make your online presence unique.