How to start a business in Australia

Starting a business is exciting, and the admin can be daunting. This guide breaks it into clear steps so you set up correctly from day one, and don't pay for it later. It's general information, not personal advice.

Step 1: Validate and plan

Before any paperwork, get clear on what you're selling, to whom, and roughly what it costs to deliver. You don't need a 40-page business plan, but you do need a realistic view of your numbers. That's something I help with in a strategy session.

Step 2: Choose your structure

Sole trader, company or trust? This is the single most important early decision, because it drives your tax, your asset protection and your admin. A sole trader is simplest; a company adds protection and a flat tax rate as profits grow. I break the trade-offs down in the small business tax guide, and it's worth a conversation before you commit.

Step 3: Register your business

Depending on your structure, you'll need some or all of:

• An ABN (Australian Business Number)
• A business name (if you're not trading under your own)
• GST registration once your GST turnover reaches $75,000, or as soon as you expect it to; you get 21 days from that point. Rideshare and taxi drivers register from the first fare regardless of turnover (see BAS & GST)
• For a company: a Director ID first, for every director, before the company is registered. Then ASIC registration, a TFN and PAYG

Company setup, starting with the Director IDs, then ASIC registration, ABN, TFN, GST and PAYG, is a one-off job I do regularly, so it's done correctly and you can focus on the business.

Step 4: Set up your books

Good books from day one save you money and stress. I recommend cloud software so your records stay current and you can see how you're going. As a Xero Certified Advisor, I set up your chart of accounts and GST codes, connect your bank feeds, and train you, or take bookkeeping off your plate entirely.

Step 5: Understand your tax obligations

Once you're trading, you'll have ongoing obligations: income tax, possibly GST and BAS, and, if you hire, PAYG withholding and super. The trick is to plan for them rather than be surprised. See the tax planning service and the recent tax changes. If the ATO ever comes calling, I also offer ATO support.

Which industry are you in?

Different industries have different setups and traps. I've written specific guides for builders, cafés & hospitality, retail & e-commerce, hair & beauty, allied health, consultants, IT & tech and more.

Travis Krantz, CPA

Registered Tax Agent and founder of Summit Tax. Over a decade of experience helping small business owners take control of their finances.

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