Checklist for Starting a Business in Australia

Tired and bored of the nine-to-six grind? Want to make more money without working for other people? It may be the right time for you to work on that business idea that you've been planning to do for the last two years or so.

Starting a new business is not difficult. You just need to have enough funds to turn your business idea into a reality. If you do not have enough savings, you can also take out a startup business loan to pursue your dream.

Once you have the money, all you need are the right preparations and strategies to achieve your goals. Here are some of the essential stuff you need to prepare to kick-start your entrepreneurial venture:

1. Business Plan

Starting a business without a plan is like going to battle without any weapon. You may fight and knock down one or five opponents with your hand-to-hand combat skill, but it is usually not enough to win against an entire army and achieve victory.

A battle, errr, business plan clears the path for your business on the road to success. It lays out your business goals, sets your objectives, and guides you through the various phases of your business.

A business plan is a written document that describes in detail how a business is going to achieve its goals by laying out all the plans for operations, marketing, financial management, and other essential aspects.

2. Name and Legal Structure

You need to have a registered name for your business to make it official. Aside from having your own business identity and protecting your brand, it will also ensure that you get taxed at the right rate and avoids penalties.

You apply for a business name through the Business Registration Service.

Upon registration, you must define your venture's legal structure, which generally falls under one of the four categories:

• Sole Proprietorship, if you don't have any business partner and you are personally liable for its financial obligations
• Partnership, if you own your business with other individuals and each one is personally liable for the financial obligations of the business but does not bear the tax burden of profits
• Corporation, if your business is an independent legal entity owned by shareholders who decide how the company operates and who manages it
• Limited Liability Company (LLC), if you own your business with other shareholders with personal asset protection and “pass-through” taxation

3. Australian Business Number

The Australian business number (ABN) is an 11-digit number that is unique to your business and identifies it to the government and community.

You can use your ABN to:

• purchase orders and invoice transactions
• claim Goods and Services Tax (GST) credits
• avoid Pay As You Go (PAYG) tax on payments you get
• claim energy grants credits
• register an Australian domain name

Go to the Australian Government’s Business Registration Service to register for an ABN. It is free of charge.

4. Tax Registration

Your tax obligations depend on the type of business that you're starting, as well as other factors such as:

• Number of employees and their benefits
• Business activities
• Turnover

Regardless of the type of business, you’re starting, you need to secure a Tax File Number (TFN) from the Business Registration Service. You can keep your individual TFN if you’re a sole trader but you have to register a separate TFN for your business if it’s operated as a partnership, company, or trust.

The different types of tax for businesses include:

• Income tax for business
• Goods and Services Tax (GST), if you buy or sell goods and services
• Capital Gains Tax (CGT), if you earn profits from non-inventory assets, like stocks, bonds, precious metals, and real estate
• Fringe Benefits Tax (FBT), if you’re providing perks to your employees, such as a low interest loan, car for private purposes, discounted products, and reimbursement for private expenses like school fees
• Pay As You Go (PAYG) tax - If you pay salaries or wages
• Payroll tax - If you pay wages above the tax-free threshold in your state or territory
• Dividends tax, if your company pays dividends to shareholders or employees
• Fuel tax credits, which you can only claim if you acquired the fuel within the last four years
• Wine Equalisation Tax (WET), if you make wine, import wine into the country, or sell it by wholesale
• Luxury Car Tax (LCT), if you sell or import luxury cars
• Land Tax, if your business owns a land

Your ABN is required for GST registration. Without it, businesses that make payments to you must withhold 47% of it for tax purposes. Meanwhile, you are required to have an Australian Company Number (ACN) from the Australian Securities & Investments Commission (ASIC) if you’re registering your business as a company.

5. Licenses and Permits

Licenses and permits are written proof that you are legally allowed to carry out your business.

The documents you need will vary according to your:

• Business type or the industry you’re in
• State or location
• Local laws, your state, and local laws.
• Activities and operations

Visit the Australian Business Licence and Information Service (ABLIS) website to understand all the licences and permits needed for your business.

6. Company Name

While a business name is used for identity, a company name is needed by any legal entity that is registered under the Australian Securities & Investments Commission (ASIC).

Having a registered company name means that your business has its own legal, financial, and record-keeping responsibilities among other essential stuff.

To register a company name, visit or call the Australian Securities & Investments Commission (ASIC). Your Australian Company Number (ACN) will be required for this transaction.

Your company name must show the legal status of your business, like “Sam's Coffee Pty Ltd”.

7. Website and Social Media Pages

Although not a legal requirement, a company website greatly supports your brand awareness and marketing efforts. Your domain name—website address or internet URL—also helps customers find and identify your business from others.

Register your domain name through a registrar or reseller listed on the .au Domain Administration Ltd (.auDA) website. You can register in advance even if your website is not yet up and running.

Create a business page on Facebook, too. It is a good way to build brand awareness and market your business without having to pay for anything unless you want to run a paid ad. To reach more customers, join Facebook groups or communities that are related to your industry.

You can also create an account on other social media pages, like Instagram, Twitter, and LinkedIn. Choose the ones that are mostly used by your target market.

8. Business Bank Account

You need to have a separate bank account for business purposes if you own a partnership, company or trust. If you operate as a sole trader, on the other hand, you can use your personal bank account.

However, it is best for all types of businesses to open a separate business account to easily monitor cash flow.

By having a separate bank account, you can get a credit card or open a line of credit exclusively for commercial transactions. This will help you build your business’s credit profile and score.

9. Office Space or Warehouse

If you cannot run your business from home, the budget-friendly alternative is to rent or lease an office space. If you want to save money for the long term, you can also buy or construct your very own commercial property.

Always ensure that there are adequate facilities for safety and comfort, like utilities, office furniture, and equipment. If you can provide a parking space for your business partners and employees, it would surely be great.

10. Accounting System

Your accounting and the record-keeping system must be capable of handling all the finances and taxes that you’re responsible for paying. If you can, hire an accountant to take care of these matters.

Remember to keep all financial records for at least three years in case you need them to prove or disprove a problem. Accounting records include your business’s financial statements, annual reports, ledgers, journals, records of assets and liabilities, checks, invoices, and receipts.

You can also use accounting tools and apps to manage your accounting tasks. These digital tools may come in handy if you don’t have enough money to pay for an accountant.

11. System of Operations

An important aspect of your business that should be laid out in your business plan is the system of operations (or how your business operates). You must have a defined method for processing orders and requests and paying for utilities, employees, taxes, and permit and licenses renewal.

Just like in accounting, you can also use software and apps to automatically systemize and simplify your business operations. This will significantly simplify complex and time-consuming tasks, saving you a lot of time and effort.

12. Branding and Marketing

Aside from having an official business website and social media pages, do not forget to create traditional stuff like banners, business cards, letterhead, and promotional materials for your business. This will support your branding and marketing efforts.

Invest in your business logo. A professional and creative-looking one will create a lasting impression on people—customers or not. The more you use the logo in your ads and other marketing campaigns, the more it becomes associated with your business. In the near future, the logo will be sufficient enough to provide identity and branding for you.

Ready to get more customers? Develop a marketing plan for your products and services. For a start, tap on the power of digital marketing to introduce your business and reach out to a great number of people worldwide.

Every business is different. Use this guide as a general startup checklist and take the ones that apply to you. Once you’ve checked all the appropriate boxes, follow through with hard work and commitment and you’re on your way to success. Good luck!