How to start a business in Australia: a step-by-step guide

Before you start: is this right for you?

Running your own business brings freedom, and also irregular income, long weeks and decisions nobody else will make for you. Before you commit, be honest about three things:

• Money. How long could you live without a regular wage? Most new businesses take months, sometimes years, to pay their owner properly.
• Time. Will you start full time, or alongside a job? Many successful businesses begin as a side project until the numbers prove themselves.
• Support. Who can you lean on for advice, practical help and encouragement? Our guide to finding a mentor, coach or adviser lists free and low-cost options.

None of these should stop you. They’re things to plan for.

Step 1: Test the idea

The cheapest time to find out an idea won’t work is before you’ve spent anything on it.

• Talk to ten potential customers. Ask about the problem you want to solve, how they deal with it now, and what they pay. Listen more than you pitch.
• Look at the competition. Who already does this, what do they charge, and what do their customers complain about?
• Run a small test. Take pre-orders, offer the service to a few people at a discount, or run a small online ad to a simple web page and see who enquires.

If people won’t pay, or the competition is better and cheaper, adjust the idea now. Our guide to small business ideas that work in Australia has more on testing.

Step 2: Write a short business plan

A business plan doesn’t need to be long. A one-page plan that answers what you sell, who buys it, how they’ll find you, and whether the numbers work is enough to start.

The numbers matter most: your start-up costs, the sales you need to break even, and a 12-month cash flow forecast that shows which months will be tight.

• How to write a business plan (with a free template)
• Financial planning and cash flow

Step 3: Choose a business structure

Your structure decides who is responsible for the business’s debts, how it’s taxed, and what you need to register. The four main options are:

• Sole trader: simplest and cheapest; you and the business are legally the same.
• Partnership: two or more people running a business together.
• Company: a separate legal entity, with more setup and reporting.
• Trust: a trustee runs the business for the benefit of others.

Most people start as a sole trader and change later if the business grows. Get advice from an accountant before you decide. Our guide Sole trader, partnership, company or trust? explains the trade-offs.

Step 4: Register your business

Once you know your structure, register in roughly this order:

1. ABN (Australian Business Number): free, and you’ll need it for almost everything else.
2. Business name: if you’re trading under anything other than your own name.
3. Company registration: only if you’ve chosen a company structure.
4. GST: required once your turnover reaches the threshold, optional before that.
5. Licences and permits: depending on your industry and location.
6. Domain name: to protect your name online for a website and professional email.

Our guide to registering a business covers each one, with links to the official forms.

Step 5: Sort out the money

• Open a separate business bank account. Mixing business and personal money makes record keeping, tax time and decision making much harder.
• Work out your funding. Savings, family, loans, grants or investors: see Funding a start-up and Government grants and free support.
• Set up record keeping from day one: accounting software, a folder for receipts, and a weekly time to update everything. See Bookkeeping basics.
• Decide how you’ll get paid: invoices, card payments, online payments and your payment terms. See Getting paid.

Step 6: Protect yourself and the business

• Contracts and terms. Clear terms and conditions for customers and written agreements with suppliers or partners prevent most disputes. See Contracts and legal basics.
• Insurance. Talk to an insurance broker about what cover your type of business needs.
• Your brand. Check your name isn’t already a trade mark, and consider registering your own. See Choosing a business name and brand.
• Your email and data. Use a professional email address, turn on multi-factor authentication, and back up from day one. See Cyber security and backups.

Step 7: Set up your workspace and tools

Decide where you’ll work (home, a shared office, a shop or a vehicle) and what you need to do the job: equipment, software, phone and internet. Keep it lean at first; buy what you need as the work proves it.

• Running a legitimate home-based business
• Choosing business software
• Using AI tools in a small business

Step 8: Get ready to find customers

Before you open, know how your first customers will hear about you.

• Claim your Google Business Profile and get a simple website live. See Building a small business website and SEO and GEO.
• Write a simple marketing plan: who you’re targeting, your message, and two or three channels you can run well. See Writing a marketing plan.
• Tell everyone you know. Your first customers often come from your existing network.

Step 9: Launch, then learn

Start small, track what happens, and adjust:

• Compare your actual sales and costs with your forecast every month.
• Ask early customers what they liked and what nearly stopped them buying.
• Review and update your business plan every three months.

Your start-up checklist

• Idea tested with real potential customers
• One-page business plan, start-up costs and cash flow forecast
• Business structure chosen (with an accountant’s input)
• ABN, and business name if needed
• GST, company registration, licences and permits checked
• Separate business bank account
• Bookkeeping set up
• Customer terms and key contracts in writing
• Insurance discussed with a broker
• Domain name, professional email, multi-factor authentication, backups
• Google Business Profile and a simple website
• Marketing plan with two or three channels
• Date set to review your plan