How to Start a Small Business in Australia: The Ultimate Guide
So you’ve decided to start a small business in Australia? Congratulations! This can be an incredibly rewarding experience, but it’s important to remember that there is a lot of work involved. In this guide, we will walk you through the steps necessary to get your business off the ground and running. We have put together a list of steps to starting your own small business that will make the process easier and ensure you aren’t missing anything. So let’s get started!
- Before you start, check you have a viable business idea
The first step is to come up with a business idea. Ask yourself: what are you passionate about? What needs do you see in the marketplace that are not being met? Is your idea one that people will be interested in spending money on? Also, are you ready to expend the amount of effort it takes to start and run your own business? These are important questions to think about before you commit to starting your own small business. Not only do you want to make sure you are ready to start the process, but you also want to be relatively sure that the idea you come up with is going to succeed in giving you the outcome you want.
A great way to start is to make a mindmap or idea board and talk to the people around you to determine whether they would use the product or service. You can also carry out some initial market research by posting surveys on community groups on public forums like Facebook or Reddit.
- Next, it is time to get a basic structure of your business
At this stage, you will be thinking about what type of business structure you will be choosing, defining your worker status, choosing a location for your business, and choosing a business name.
You will need to determine whether you will be operating as an employee or a contractor, and this will be determined by the type of business structure you choose.
You have a few different options when it comes to choosing a business structure for a small business. We have put together a list of some of the more relevant ones for you to have a look at.
A sole trader is a structure where the person who owns the business is legally responsible and therefore fully liable for all aspects of the business. The benefits to this structure are that you are the boss and can keep all the profits and operate the business however you want, your start-up costs are relatively low, and you can easily change the legal structure later if you need to. The disadvantages of operating as a sole trader are that you have unlimited liability for debts the business may incur, there is a limited capacity to raise capital, and running the business is entirely on your shoulders.
This business structure is made up of 2 or more people that distribute profits and losses between them. The benefits of operating as a partnership are that two heads are better than one in terms of coming up with ideas and operating the business, start-up costs are relatively low, and you will have more capacity to raise capital as you can borrow more. On the other hand, partnerships also have unlimited liability. However, having more than one person can make bearing the brunt of the debts incurred a little easier. Also, having more than just yourself has the potential to lead to disagreements on how the business is operated.
Trust structures are generally used as a way to protect the business’ assets for any beneficiaries that may exist. In this type of structure, a trustee holds and is responsible for everything related to the trust, including both profits and losses. The benefits of a trust structure are there is limited liability, tax benefits and more privacy than a company. Conversely, they are costly to open and operate, you need to provide a formal trust deed outlining operations, and there are yearly administrative tasks involved.
A company operates as a completely separate legal entity from its owners. This type of structure provides the flexibility to grow and expand, limited liability to its owners, and a capped taxation rate of 30%. Disadvantages to a company structure are that there are high start-up and operating costs, loss of control, and limited tax concessions available.
Location, Location, Location
The old adage gives an idea of how important location is to most businesses. Choosing a location is an important step to starting a small business. You will want to make sure you are positioning your business in the best space to reach your customers.
There are also different premises you might need to think about depending on the type of business you will be operating. You might need a physical location and warehouse for your business to operate out of if you want to sell products out of a retail store. Or, if you are providing a professional service that needs an office or access to an area where you can meet clients, you might look at a shared office space. If you are operating completely online, you might still need a warehouse and office space to store stock and put orders together.
When choosing a name for your business, you ideally want it to be both reflective of your brand and memorable to customers. You will need to think of a name and check that it is available for you to use.
- Develop your business plan
Once you have a business idea, it’s time to start putting together a business plan. This document will outline your business goals and strategies, how you plan on achieving them and generally keep you on track. You will also need to create a risk management plan to help mitigate risk and reduce the impact of unexpected events.
Your marketing plan is another important document you will need to develop. It’s important to have a clear understanding of your business target audience and exactly who you are selling to before moving forward. Who are they? What do they need/want? How can you reach them? Include information about your business target audience in your marketing plan, along with a marketing strategy for how you will portray and place your brand within the market and how you will advertise to your customers.
- Register your business
There are a few ways you need to register your business to officially start operating. In Australia, it is required that all businesses operate under an ABN that is used by customers, suppliers and the ATO to help identify your business. You will also need to register your business name and purchase the domain name, make social media accounts in the name, and even trade mark the name if necessary to stop other businesses from using it.
You will also need to register your business for the relevant taxes. It is very important for you to understand all the tax responsibilities relevant to your business, especially if you are operating as a sole trader or partnership.
Next, you will need to register for any licenses or permits that are required to operate your business. These can vary state-to-state, so it is important to look up what is relevant in your state.
Finally, if you have decided to start a company, you will need to register as a company.
- Take charge of your finances
The next thing to think about is how you will organise your business costs and finances. This is about managing your cash flow, budgets, payments and invoices. If this is a bit daunting, consider utilising a bookkeeping service. You will also need to research the finance options available to you and develop an effective pricing strategy that takes into account all business costs relating to a product and service.
- Look into legalities & prepare for tax time
Running your business without understanding the rules and regulations that apply to you could lead to massive business costs and a lot of time spent fixing the mistakes in the future. You will need to research and understand all legal essentials pertaining to your business, including legalities like fair trading laws, consumer laws relevant to you, and understanding how contracts work.
Staying on top of your tax throughout the year can make it a lot easier when tax time comes. This will help make sure that you are paying the correct amounts and will help avoid any fines and unnecessary business costs. To do this, make sure you are keeping the right records, research and understand tax requirements for your business, and learn about lodging and paying for tax. Again, if this seems a bit daunting, you can hire tax accountants to take care of this for you.
- Start setting up business operations
You might be able to operate by yourself for a period of time; however, as you grow, you might need to think about hiring staff. You will need to understand all the legal responsibilities that come with having employees, including the types of employees you can hire (causal/part-time/full-time), the minimum wage levels relevant to each type of employee, information about super contributions, and more.
You might also work with suppliers, especially if you operate in the F&B or retail industries. In this case, you will need how to manage your suppliers.
- Start marketing your business
Marketing your business and the product or service you provide is very important to the longevity and success of your business. You want to position your brand in front of relevant customers to ensure you are getting the sales necessary to stay afloat. There are a few ways to market your business successfully and a few platforms you can do it on.
Build a website
A key aspect of being able to market your business to successfully drive sales is developing a website that showcases what your business provides. Your website should be reflective of your brand and should provide a good user experience that seamlessly encourages customers along through the purchase process. It needs to be visually appealing and easy to navigate. If web design and development is not your forte, you can use platforms like Shopify or Wix to build a site easily using a template. Or you can hire a web designer and developer to design and construct one for you.
Once you have your website set up, you can start thinking about things like SEO. SEO or Search Engine Optimisation is the process of optimising your website so that Search Engines like Google put you at the top of the results page. Being the first result builds your brand authority and therefore builds trust with your customers. Optimising your website for SEO includes carefully placing keywords or phrases within your site. However, you need to be careful when carrying out an SEO strategy as, if you do it wrong, you could end up with a website that Google will not allow to rank at all, which can be highly detrimental.
If you are looking for SEO experts to help get your website ranking in those coveted top spots on Google, contact the team at First Page. We have a highly experienced team who will get you ranking in no time!
Part of your SEO strategy and overall marketing strategy is to write blogs about your products or industry. From an SEO perspective, this helps you build authority in Google’s eyes and makes it more likely for you to rank higher on the Search Engine Results Page (SERP). From a customer’s perspective, this information provides added value and ways for them to engage with your brand, making them more likely to trust and therefore purchase your products.
Social media has become one of the most effective tools in a marketer’s arsenal. You will want to make social media profiles for your business on platforms like Instagram, Facebook, Twitter, and Tiktok. You will want to post regularly to engage with your audience on these platforms to build a following of potential customers.
Social media can also be used to place paid advertisements for your products or services. Paid ads will reach a much broader audience in a highly targeted way that makes conversion more likely, and is, therefore, a very important tool to use. Using this tool can be quite difficult to understand and get right, so you might want to consider hiring professionals to get the job done. At First Page, we have a team of highly skilled social media marketers who can help you get your product in front of the right people. Contact us today on 1300 479 226 for more information.
Another method of marketing to think about is using Google Ads to pay for the top result for certain keywords. Again, this can be quite a complicated process to get right and hiring a professional service might be prudent. Email and mobile marketing are great, especially for retargeting customers who may have bought before. And finally, as your brand grows and you have more and more positive reviews from customers, word of mouth will become one of your greatest assets. This is one of the most powerful and inexpensive methods of marketing, and it means it is important to give each customer the best service possible so they recommend you to their friends.
Get help from the experts
If you are looking at all of the steps to starting a small business and are thinking it seems a bit overwhelming, let us take one step off your plate. We can help you market your business to your customers in a way that is sure to lead to higher traffic to your website and sales of your products. We can help with anything from your SEO strategy to your paid social or Google Ads strategies. Contact us today for more information about how we can help you!