How to Start a Business in Australia in 2023

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Thinking of starting a business in Australia? Wondering “How to start a business in Australia?” No doubt this is exciting and daunting time for you, so this Guide has you covered!

We discuss all the things you need to do to start a business in Australia, from choosing the right business structure to understanding the Australian market. And we provide you with a stack of starting information and practical advice to make your entrepreneurial journey a success, including suggestions about when you should engage an adviser to help you out.

Get ready to launch your business in Australia with confidence and success, and minimise your stress in doing so.

Key Takeaways:

  • Understanding the Australian business landscape is crucial before starting your venture.
  • Understanding the Australian market is key to successfully positioning your business.
  • Choosing the right business structure can impact your risk, liability, tax, and control over the business.
  • Deciding on your business involves identifying your passion, your skills and understanding market demand.
  • Getting your business registered involves applying for an ABN and TFN, and possibly registering for GST.
  • Naming your business and registering the business name with ASIC is an important step in establishing your brand.
  • Choosing your business location requires careful consideration of several factors – in particular, will you have a physical store or presence or be solely online?
  • Starting a business as a non-citizen involves understanding the visa process and meeting certain legal requirements. It can be done, but there are some hurdles to jump through.
  • Engaging a Lawyer, a Bookkeeper, and an Accountant can provide crucial support in legal matters, financial record keeping, and dealing properly with your taxes.

Deciding on the Business itself (ie what will you sell or what services will you provide?)

Choosing the right business is crucial for your success. It’s important to align your business idea with your skills, interests, and the market demand.

For example, if you have a background in digital marketing, you might consider starting a digital marketing agency. If you’re passionate about sustainable living, you might open a shop selling eco-friendly products.

Whatever you decide to do, make sure it’s something you can see yourself doing for the next number of years – businesses are a long-term proposition and the last thing you want to do is lose interest only a few months in.

Choosing the Right Business Structure

Your choice of business structure can have a significant impact on your business. It affects your liability as a business owner, risks of your business, the taxes you’ll need to pay, and the level of control you’ll have over your business.

In Australia, the most common business structures are Sole Trader, Partnership, Company, and Trust.

  • Sole Trader: This is the simplest structure, where an individual is personally liable for the business, carried out personally rather than through a corporation.
  • Partnership: This involves two or more people who distribute income or losses between themselves. You should never enter into a Partnership without signing a written Partnership Agreement, even if you are entering into Partnership with family or friends.
  • Company: This is a legal entity separate from its shareholders, providing them with limited liability.
  • Trust: This is an entity that holds property or income for the benefit of others. It will usually have its own trustee company to take legal ownership (while the trust takes beneficial ownership).

Blaze Business & Legal can help you put your necessary structures in place and draft your contracts to reflect your chosen business structure. This is a very important part of setting up your business, and shouldn’t be skipped.

Understanding the Australian Market

Before you launch your business, it’s important to understand the Australian market. This involves researching your target audience, understanding their needs and behaviours, identifying your competition, and understanding the laws of the jurisdiction in which you’re setting up a business.

If you’re setting up a car wash, you need to take location into account, as well as demographics of the relevant area, environmental laws, and other relevant matters.

If you’re opening a vegan restaurant, you’d want to understand the demand for vegan food in your area (and make sure there is that demand), and also understand who your competitors are.

If you want to set up a coffee shop in the CBD, carefully consider the impact that COVID and working from home has had on worker presence in the city, to ensure there is enough demand to make your coffee store financially viable.

It’s best to spend extra time and care with this research, and make sure you reach out to a Business Adviser for assistance if you want help validating your business idea.

Getting Your Business Registered

Up until now, it’s all been thinking and planning. Now it’s time to take action to register your business and bring it into existence legally.

Rachelle Hare – Blaze Business & Legal

Registering your business in Australia involves several steps. It’s here that you need to know which business structure you are using, because the registration process may differ depending on how you are structuring your business. For example, as a sole trader, you don’t need to set up a company, but you do need to register your sole trader business with ASIC.

  1. Setting up your business structure: You will need expert help for this (and make sure you’ve spoken with your Accountant beforehand to determine any financial and tax implications). Keep in mind that Commercial Lawyers and Accountants can both set up your company and trust structures for you, but they advise on different things. Lawyers focus on the best structure for your personal circumstances, potential risk and ways to mitigate that risk. Accountants focus more exclusively on tax implications of the structure. In an ideal world, you would seek advice from both to get the full picture before registering your business. Check out our post on Structuring your Business: Do you need an Accountant or Lawyer (or both)? for more information.
  2. Registering your business with the Australian Securities and Investments Commission (ASIC): This makes your company a legal entity.
  3. Applying for an ABN: An Australian Business Number (ABN) is a unique 11-digit number that identifies your business. You get this from ASIC when you register your business.
  4. Getting a TFN: A Tax File Number (TFN) is required for tax purposes.
  5. Registering for GST: If your business is expected to have a GST turnover of $75,000 or more, you’ll need to register for Goods and Services Tax (GST).

Naming Your Business

A good business name can make your brand stand out and attract customers. It’s one of the things many new business owners prioritise, and it can be a lot of fun coming up with the perfect name.

Registering your business requires you to choose a name for your business entity. If you’re a sole trader, this will just be your own name, eg “Jane Smith”. A corporation will need a name for the company, eg “Jane Smith Trading Pty Ltd.” Your trust will also need a name, eg “Jane Smith Trust.”

In addition, unless you want to use the exact name you chose above, you should consider registering a business name. If you don’t have a business name, you will have to use your entire company name on everything, including your logo. So, your logo will need to say “Jane Smith Trading Pty Ltd” – this can be inconvenient, hence the use of a business name. Once you register a business name with ASIC, you can call and brand your business by that business name. So your business may be “Jane Smith Trading Pty Ltd trading as Outdoor Camping Adventures.”

In Australia, you need to register your business name with the Australian Securities and Investments Commission (ASIC). Be careful that you do go through ASIC, as there are a number of other providers who charge extra money to register your business and renew it.

It’s also important to check that your chosen name doesn’t infringe on any existing trademarks. For example, if you wanted to start a coffee shop called “Starbright Coffee”, you’d need to check that this name isn’t already trademarked.

You should trademark your business name/logo if you want to have the best protection against other people infringing your intellectual property rights. Make sure you consider whether the trademark should just be effective for Australia or also internationally (in specific countries or worldwide). You should seek advice from an Intellectual Property Lawyer in relation to this process.

Choosing Your Business Location

The location of your business can greatly influence its success. Consider factors like customer accessibility, competition, and cost.

If you’re opening a retail store, you will want a location with high foot traffic. If you’re starting an online business, you’ll need to consider the logistics of shipping and delivery, as well as how to optimise for Local SEO and register for a Google Business Profile.

Buying an Existing Business

Buying an existing business can be a quick way to enter the market. However, it’s important to thoroughly evaluate the business before making a purchase.

Consider its financial health, reputation, and market position. For example, if you’re considering buying a restaurant, you’d want to look at its financial records, customer reviews, and competition in the area.

Remember that buying an existing business can bring with it a lot of baggage, and you should seek advice from a Commercial Lawyer about how to protect yourself when buying a business, as well as your Accountant in relation to tax implications.

Starting a Business as a Non-Citizen

It’s important to understand the legal requirements and business environment for foreign entrepreneurs in Australia.

Non-citizens can start a business in Australia, but they need to understand the visa process. The Business Innovation and Investment (Provisional) visa (subclass 188) is one option for business owners, however you should get legal advice to confirm. (Note the visa requirement that you be nominated by an Australian State or Territory government agency.)

In My Experience…

Starting a business in Australia can be a challenging yet rewarding journey. From my experience, it’s important to stay adaptable and resilient. Market conditions can change rapidly, and it’s crucial to be able to pivot your business strategy when needed. Networking is also key. Building relationships with other business owners can provide valuable support and opportunities for collaboration.

Engaging a Lawyer, a Bookkeeper, and an Accountant

Engaging professionals can provide crucial support for your business. A Commercial Lawyer can help with business structuring, protecting yourself and your business from risk, and legal matters like contracts and compliance. A Bookkeeper can manage your financial records and help you prepare for BAS time. An Accountant can assist with tax planning and financial analysis.

Additionally, a Management Accountant like Shannon Drew can help prepare cash forecasts and recommend a financial strategy for your business – these are essential for understanding your future cash needs and optimising your finances to help you grow.

Checklist – Steps to Start a Business in Australia

Starting a business involves a number of key steps:

  1. Plan your business: Define your goals and strategies.
  2. Develop a business plan: This outlines your business goals, strategies, and financial forecasts.
  3. Identify your business structure: Decide how you will structure your business (you will likely need Legal and Accounting advice).
  4. Set up your business: Register your business, register a business name and set up your workspace.
  5. Website and social media: Get online and be found.
  6. Financing your business: Prepare a budget and secure funding if needed.
  7. Opening a business bank account: Keep your personal and business finances separate.
  8. Setting up payments: Make it easy for customers to pay you.
  9. Build your team: Consider whether you need to hire employees or contractors.
  10. Market your business: Establish your brand and reach out to potential customers. Make sure you optimise for Local SEO.
  11. Manage operations: Ensure your business runs smoothly by managing your supply chain, customer service, and quality control.
  12. Check on progress: Regularly do an assessment to make sure your business is running in the best way possible. Adjust as needed.

Tell us in the comments what other steps we should add to this list.

Conclusion

Starting a business in Australia and becoming an entrepreneur is a process filled with opportunities and challenges. With careful planning and the right support, you can build a successful business, regardless of your industry or niche.

Remember, the journey of owning a business takes place over the longer-term. Stay resilient, be adaptable, and don’t be afraid to seek help when you need it.

FAQs

1. What are the requirements to start a business in Australia?

Starting a business in Australia requires choosing a business structure, registering a business name, applying for an ABN and TFN, and possibly registering for GST. You’ll also need to understand your legal obligations and industry regulations.

2. Can a foreigner start a business in Australia?

Foreigners can start a business in Australia. However, they need to understand the visa process and meet certain legal requirements. They will also need to comply with the same registration and regulatory requirements as natural Australians.

3. Is Australia an easy place to start a business?

Australia has a supportive environment for startups with a strong economy and a straightforward business registration process. However, the ease of starting a business can depend on various factors including the type of business and the entrepreneur’s preparedness.

4. What is the most profitable business to start in Australia?

The profitability of a business can depend on many factors including the industry, market demand, and the business model. It’s important to conduct market research to identify (and confirm) profitable opportunities.

Additional Resources

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About the Author

Rachelle Hare

Rachelle Hare

Rachelle Hare is a highly experienced Construction Lawyer and Contract Lawyer, with over 23 years of experience in Tier 1 and Tier 2 Construction Firms, Top Tier Private Practice and Government.

With 23+ years of experience as a Senior Lawyer, Strategic Contracting Adviser and Management Consultant in Construction Law, Contracts, Major Projects, Commercial Advisory, Compliance, Procurement, Contract Management and Risk Management, Rachelle has the rare skills to offer you seamless business advice and legal advice to help support your organisation.


As well as a Lawyer and Business Adviser, Rachelle has also acted as a Strategic Procurement Adviser, Compliance Manager, Strategic Risk Adviser and Commercial Manager.

Rachelle owns
Blaze Business & Legal, a combined Commercial Law Firm and Business Advisory Firm located in Brisbane, Queensland, Australia. Blaze Business & Legal assists a broad range of clients in the Construction Industry and related industries, and advises owners, contractors, subcontractors, NFPs and other organisations on a broad range of Construction Law, Commercial Law, Business Advisory and Management Consulting issues in Brisbane, Queensland and around Australia.

Rachelle also owns Blaze Professional Learning, where she offers practical contracting skills, hands-on experience in drafting and working with contracts, and industry insights to help Professionals upskill and advance their careers with real-world skills.

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