How To Set Up A Business – The Basics
Starting your own business is exciting and scary. Maybe you’re still in your day job and are waiting for the right time to take the leap. Or has your hobby turned out to be extremely popular and it’s time to make it official?
Whatever your situation, you may not even know where to start. Well, we’ve been there done that, and helped a few other people along the way, so we have put together a little guide focused on starting a business in Australia. Hopefully it will become a great easy to understand resource for some of you out there.
Write a business plan
Whatever stage your new business is at, it’s a good idea to write down a business plan. Getting it out of your head and onto paper can solidify what your business goals are, how you plan to scale, and to be aware of all the facets of your business operations. It is also a crucial document to have if you need finance to start your business.
A guide and template has been created by the Australian Government Business department, so you don’t have to start your document from scratch, which will make your life much easier! Find it here.
Sole Trader, Partnership or Company…which one are you?
The way your business is set up and who manages it will determine whether you will create a sole trader business, a partnership or a company.
Generally speaking, a sole trader means you’re a one man/woman show, so you will own the business outright and operate it on your own.
A partnership is when you go into business with another person, and split the profits between you. A company is for larger entities, that might have several managers and employees and require a larger set up. I’m speaking in general terms, so best to consult a professional accountant to make sure you set yourself up right from the beginning if you’re unsure.
Getting an ABN
An ABN is crucial if you want to run a business in Australia. ABN stands for Australian Business Number. It’s the number that identifies your business with government offices, like the ATO. You need to have an ABN to conduct business. You also need to have applied for this or have an ABN before you can register a business name, and before you can buy a domain or register for GST etc. To apply for an ABN, do it directly with ASIC here.
Deciding on a business name
You may have already come up with a business name before anything else, or you might still be trying to figure it out. It can be hard to come up with something unique, or that explains the services or products you offer. Once you do decide however, you do need to check its availability.
There are a couple of places to check whether your business name will be suitable – on the business name register, and a domain name provider.
You can check if your business name is available in Australia by going to the ASIC website and typing in your name to do a search.
Purchase your website domain name
Simultaneously, if you have found your business name is available on the business name register, visit a domain name provider, such as VentraIP, and check if the corresponding domain name is available as well. You can also check via our Get Started page, where you can choose to have us buy your domain on your behalf.
That way, your business and domain name will match, making it easier for people to find you online. It means you will also be using the same name on your email address, in your business cards, social media handles etc. Everything will then connect, which is a better way to be discovered online.
So whilst it’s not an absolutely necessary step, you might want to also search the social media channels you plan to use to see if the username is available as well. You can always create small alternatives as so many social media channel names are already taken, but if Instagram is super important to you for example, then perhaps checking the availability first will hep you decide on your final business and domain name.
Registering for GST
Once you have your ABN, business name and domain purchased, it’s time to consider if you will register for GST. This is the Goods and Services Tax you must charge if:
- Your business has a turnover (gross income minus GST) of $75,000 or more.
- You expect your turnover to reach this in the first year if you’re just starting.
- If you’re already in business and have reached this threshold.
You can register via the Business Portal or you can get your accountant to do it for you.
Setting up or deciding how you will conduct your accounting / taxes
Something to plan for, as it will be a requirement further down the line, is how you will be recording your income and taxes for when you need to submit your GST or Tax Returns. An easy to use program for small businesses is Xero. But there is other accounting software choices out there, so you can have a look to see what suits you best, or talk to your accountant. Starting out with accounting software, even if you don’t do much sales to begin with, will make it far easier down the line when things get a little busier, as everything will have been recorded already.
Hope this has clarified a few of the steps you need to make with regards to all the admin and legal requirements when first setting up your business!
Article written by Louise Theo, Co-founder of Webbie & Divine Digital, with 15+ years experience in the digital advertising industry.