Ask any business owner for their favourite memory of their startup, and most will tell you it was their first sale. The day you make that first transaction, or perhaps open your doors will likely be one of the most memorable and fulfilling days of your career
As you plan your grand opening, it’s important to remember that not all small businesses are destined to succeed. Some statistics say up to 60% of Australian businesses cease operating within the first three years – Learn more
That’s not to say that your business will fall into those statistics and fail. What’s important to bear in mind, is starting a successful business in Australia, regardless of size, requires strategic planning, hard work, and dedication. Taking the time to thoroughly plan your business, and establishing the right foundations and structures truly does ensure your odds of long-term prosperity will rise.
As bookkeepers, we can say from experience that the majority of our clients have had to make the same plans and set the same structures in place, perhaps not in the same order but one way or another, each of them have used these same fundamentals.
In today’s blog, you’ll find a 5 part step-by-step plan to set your business up (in order of priority) as well as up-to-date resources and links to help you start setting up your business, determine your business structure, register an ABN and much more.
Step One: Do Your Research
The path to a prosperous business begins with extensive research. While you’re no-doubt eager to open your doors (physically or virtually) as soon as possible, you should never forget to do your homework and carefully research your target industry first.
Ask yourself these short questions before you begin developing your official business plan:
Is there a need for the products or services that I will be offering?
Who will I target with my products or services?
What location would be best for my offices/store/base?
How can I gain an edge over my competitors?
Is now the right time?
Do yourself a favour and ask yourself twice over that last question. Timing is vital. Do not forget to consider extenuating circumstances and how they can impact your business plans. A great example would be our current Covid19 climate. It may not be the best time to open your dream fine-dining restaurant in the midst of the Coronavirus outbreak. You could, however, pivot your dreams (temporarily) and launch a fine-dining take-out service. This may also give you the time and funding to plan and develop your business expansion post-Covid to include in-house dining! Revising your plan in accordance with timing can massively impact your business in the long run.
Step Two: Prepare Your Business Plan
A strong business plan will help you in three key ways.
First – It will help you identify your needs with respect to funding and staffing.
Second – A well-written business plan can help you secure a loan or grant.
Third – The right plan will provide an organised framework to help achieve first-year goals.
Your business plan should be clear and concise. Try to include the following points:
An executive summary, or a short synopsis of your business goals
A description of your business that outlines the goods or services that your business will deliver
A market analysis that explores the need for the products that you will offer
An organisational summary that lists the key players or employees you plan to have within your business
A marketing strategy that details the advertising initiatives and promotional techniques you plan to employ
The Australian Government offers some incredible tools to help you plan to start your business. Try this great resource here that can help you decide which business structure would work best for you.
Step Three: Register Your Business
Once you have your research finished and plan locked in, deciding on a Business name and registering your business accordingly with the Australian Government is vital for several reasons.
Here’s the 3 registration processes you must consider and lock in.
Register yourself as a Business: Creating an ABN (Australian Business Number) is a free registration number that the government recognises for tax purposes. Find out more here
Register your business name: You must register your business name with ASIC once you have an ABN. This is how the government recognises each business run under and ABN tax code. you can do that here. Registering your Australian business name must be done through this portal, the cost is less than $50 a year to register.
Determine if you need to register for GST: If your business plan entails earning over 75k every financial year (gross earnings – before tax and expenses) you will have to register for GST (goods & services tax). Take our word – there is no way that you can avoid paying GST and heavy fees can apply if the Australian Tax Office finds that you haven’t registered or paid for your business GST earnings.
The Australian Government’s business registration service is easy to use and you can complete the process for everything listed above in a matter of minutes. The site even offers a helpful tool that will help guide you through the business structure and tax registrations that would best suit your new business.
Step Four: Logistics and Compliance
Once you have registered your business you can now get into the true work of a business owner (congratulations) the back-end, nitty gritty stuff. I’m sure you’re currently rolling your eyes, but ensuring you have your business set up logistically can be the true back bone of a good business!
Here’s your next steps to consider:
Do you need a special licence to operate your business?: This Resource will tell you what license you are needing – https://ablis.business.gov.au/
Insurances: If you’re conducting any service or sales outside of your own home, you will need to think about public liability, personal, professional indemnity and/or product liability insurance. Home-based businesses may need different insurances. Learn more here.
Business bank account: It’s extremely important to keep business and personal finances separate, we always encourage business owners to open a separate bank account that is dedicated to your businesses finances only. This also makes it a lot easier to track your earnings, expenses and view your business finances at a glance.
Accounting Software: Make your life easier from the get-go by setting up accounting software before making even your first purchase. Accounting software can save you time, money and headaches to name just a few major benefits.
Employees: If you are not able to complete all your business tasks yourself, you may need to employ other people. Have you considered what obligations you’d have if you employed other people? Learn more here.
Tax/Super: If you plan on hiring employees, you will need to register your business for PAYG Withholding tax through your ABN and set yourself up with an Employer default super fund. Most retail super funds have an easy application process for this.
Step Five: Secure Operating Capital
Most small business owners need funding to get their businesses off the ground. Depending on the nature of your business, you will need money to pay for your office space, equipment, furnishings, marketing expenses, and daily operating costs. Additionally, most small businesses take at least several months before yielding a profit. You may need to turn to one of the following sources of funding to help cover costs:
Grants and funding programs: The Australian government offers a variety of grants and funding programs to qualified business owners.
Traditional bank loans: Seeking a loan from one of the many banks in Australia is a popular option for many small business owners.
Private investors: There are many angel investors in Australia who are interested in lending financial support to new businesses.
Your personal savings: If you have plenty of money saved, you can dip into your own cash savings to get your business off the ground. This is a great, interest-free alternative.
*Tip* The ATO and ASIC have some great resources for people wanting to start their own business, we highly recommend downloading the app ‘First Business’ by ASIC. They have useful checklists and information that is not readily available from a google search.
The Bottom Line
Breaking free of the rat-race and launching your own business is one of the most exciting, liberating choices you could make for your life. Many entrepreneurs have successfully trodden the self-employed path and sworn that the grass truly is greener.
The benefits of this day and age are the endless possibilities to build a business around doing the things you love best!
But like all big dreams, there is serious work and dedication needed. By following the steps above, you can put your small enterprise on the path to success. Another positive? Although the fundamental planning and setup of any business is a large investment of your time, most of it can be done today in one place – behind your desk, at your dining table or wherever you choose to take your laptop or desktop.
Geared up and ready to turn your business dreams into reality? Perfect! Like any business in 2021, the next step for success is going online. Find the basic tools and set-up process to build your business digitally by heading over to our Gecko Cloud Solutions Blog here.