Starting a small business is an exciting adventure that requires careful planning and organisation.
There are several essential steps to take, from registering for an Australian Business Number (ABN) to setting up financial systems and securing insurance.
We’ll walk you through the process, ensuring you have a solid foundation for your entrepreneurial journey.
Registering your business and getting an ABN
The first step is to decide which structure is right for you, with options including setting up a company or partnership, or being a sole trader.
The right choice will depend on the type of business you operate, its size, how you wish to pay tax, and how you want to protect your assets.
An accountant can help you decide on the right option for you.
Then, you need to apply for an ABN. This is a unique 11-digit number that identifies your business.
You will need to include this number on tax invoices and other documents.
Tax time essentials
It’s vital to understand your tax obligations as a small business owner.
You will need to register for Goods and Services Tax (GST) if your business earns more than $75,000 a year.
This is a broad-based 10 per cent consumption tax. If your business collects GST, you may need to pass this money back to the government, offset by any GST you pay.
You may also need to pay income tax and payroll tax.
Your accountant can help you set up systems for this.
You must also understand the Australian Taxation Office’s (ATO) rules and keep accurate records of your income, expenses and tax deductions.
“Protecting your business against potential risks is also vital”
Write a business plan
A well-thought-out business plan serves as a roadmap for success. It outlines your goals, target markets, products and services, marketing strategies and financial projections.
Start by conducting market research to understand your industry, competitors and potential customers. Identify your unique selling proposition (USP) and create a marketing plan to reach your target audience.
A business plan helps you stay focused and is an important requirement if you want bank finance or external funding.
Setting up financial systems
Effective financial management is crucial for the success of any small business.
You will likely need to open a business bank account to separate personal and business finances.
Accounting software such as MYOB, QuickBooks or Xero may be a useful software to help track income and expenses and generate financial reports. Implement a bookkeeping system to maintain accurate records, including invoices, receipts and payroll information.
This will simplify tax reporting and enable you to monitor the financial health of your business.
Getting the right insurance
Protecting your business against potential risks is also vital.
Consider the specific needs of your industry and determine the appropriate insurance cover.
Many small businesses will need public liability insurance and workers’ compensation insurance plus professional indemnity insurance if you give advice.
Rather than trying to guess what’s right for you, it’s a good idea to ask your broker or adviser to assess your requirements and find suitable policies that safeguard your business and assets.
Set up for success
When you have the fundamentals in place, it’s time to focus on revenue-generating activities.
Chris Loverseed is the founder of Positive K9 Training, a consultancy firm that helps people scale up their pet-based businesses. He says when you’re starting out, it’s important to recognise your time and energy are precious commodities.
“So they are best channelled into activities that drive your business forward and generate revenue,” Chris says.
Chris recommends you start by understanding your market.
“Find out who your customers are, what they need and their pain points. Then, you can tailor your product and messaging. It’s all about finding the perfect fit between what you offer and what your customers are looking for.”
At the start, Chris suggests taking the opportunity to build a community around the business. Social media channels can be a useful source for this.
“This goes beyond just making sales. It’s about creating a group of loyal customers who love your product, believe in your brand and will advocate for you. A strong community can be your most powerful marketing tool.”
The next step is to develop your marketing strategy, Chris says.
“This is how you get the word out about your business. Whether it’s through social media, email campaigns or traditional advertising, effective marketing is all about reaching the right people with the right message at the right time.”
Do you have the right cover?
Starting a small business in Australia requires careful planning and adherence to legal requirements. For any business insurance needs, speak to your insurance broker or adviser to understand the products that are right for you.
Important notice – Steadfast Group Limited ABN 98 073 659 677
This general information does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your insurance broker or adviser as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. These insurances are issued by various insurers and can differ.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.