Essential Steps for Starting Your Business
Starting a business is an exciting venture that requires careful planning and execution.
Here’s a streamlined checklist to help you turn your idea into a successful business.
1. Determine if You Have a Hobby or a Business
Is Your Side Hustle a Hobby or Business? Assess whether your activity is just a hobby or a viable business. Consider factors like time investment, profit-making intent, and consistency. The ATO has some helpful information in helping you work this out: https://www.ato.gov.au/forms-and-instructions/trust-tax-return-2014-instructions/general-information/hobby-or-business
2. Write a Business Plan
Ensure Market Demand: Develop a comprehensive business plan that validates the market need for your idea. Include sections on market research, target audience, competitive analysis, and unique selling propositions.
3. Evaluate Cash Flow
Assess Financial Viability: Create a detailed cash flow forecast, covering initial setup costs and ongoing expenses. Ensure your business model is sustainable and profitable over the long term.
4. Determine Your Business Structure
Choose the Right Structure: Decide if you’ll operate as a sole trader, partnership, corporation, or another legal entity. Set up a new structure if necessary. Consult your accountant to determine the best structure as it can be very costly if you don’t get this right from the beginning.
Obtain Necessary Registrations:
ABN: Apply for an Australian Business Number (ABN).
TFN: Get a Tax File Number (TFN) if you’re establishing a new entity.
GST Registration: Register for Goods and Services Tax (GST) if required.
PAYG Withholding: Register for Pay As You Go (PAYG) withholding if you plan to employ staff.
5. Set Up Bank Accounts
We always suggest you establish good bank account structure from the beginning to get into good habits. Our suggested bank account structure is as follows:
Trading Account: For daily business transactions.
Tax/GST Savings Account: To set aside funds for taxes and GST.
Long-Term Savings Account: For future investments and savings.
6. Check Licenses and Permits
Identify Requirements: Research and obtain the necessary licenses and permits to operate legally. Use resources like the Australian Business Licence and Information Service (ABLIS) to find out what you need.
7. Obtain Adequate Insurance
Protect Your Business: Secure appropriate insurance coverage to protect your business from potential risks and liabilities.
8. Set Up Accounting and Software Systems
Implement Tools: Establish an efficient accounting system and other relevant software to streamline your operations and financial management.
9. Create a Marketing Strategy
Promote and Sell: Develop a comprehensive marketing plan to attract and retain customers. Use various strategies, such as social media marketing, email campaigns, and SEO, to boost your visibility and sales.
Starting a business involves a mix of strategic planning, financial management, and marketing efforts. By following these steps, you can lay a solid foundation for your business and set yourself up for long-term success.
10. Engage with a qualified accountant
Engaging a qualified accountant when starting a business provides critical expertise, ensures regulatory compliance, and aids in effective financial management. Accountants help with budgeting, tax compliance, and selecting the right legal structure, while also offering strategic advice on growth and risk management. This foundational support helps avoid costly mistakes and sets the business up for long-term success.
Seek Professional Guidance Disclaimer:
The following information is general information only and is not and does not constitute advice. If you rely on the information herein, you do so at your own risk. For tailored advice for your specific situation and circumstances, please contact us directly.