The cost of starting a business in Australia varies greatly and it is dependent on several factors including the size, type, industry, and structure of business you intend starting. But generally, if you intend starting a small business, you are expected to spend anywhere between $3,000 – $5,000 and it could be more depending on what you are looking at.
This is why when you are considering how much it will cost you to start a small business in Australia, you have to look at it from two different categories. These categories are one-time costs and on-going costs. Having said that, here are some of the costs as classified in different categories associated with starting a small business in Australia.
Table of Content
One – Off Small Business Startup Costs
- Purchase price or down payment if you are purchasing a business
- Office furniture
- Computer hardware and software
- Setup, installation and consulting fees
- Business cards and stationery
- Decorating and remodeling
- Fixtures, counters, equipment & Installation
- Starting inventory, raw materials, tools, etc.
- Deposits with public utilities
- Legal and other professional fees
- Business licenses and permits
- Advertising and promotion for opening
- Signage
- Rent & security deposit (often equals 3 months rent)
- Operating Cash
Ongoing Monthly Expenses
- Salary of owner-manager (amount you need to pay yourself)
- All other salaries, wages, & commissions
- Payroll taxes or self-employment tax
- Rent
- Equipment lease payments
- Advertising (print, broadcast and Internet)
- Postage & shipping costs
- Supplies (inks, toners, labels, paper goods, etc.)
- Telephone
- Utilities
- Internet connection
- Website hosting and maintenance
- General business insurance
- Business vehicle insurance
- Interest & principal on loans & credit cards
- Inventory, raw materials, parts
- Legal and other professional fees
- Franchise fee
- Miscellaneous
Here are some of the steps you are expected to follow when starting a business in Australia and some of the cost associated with the steps;
7 Steps to Starting a Business in Australia
STEP 1: Check for Business Name Availability
The first step when it comes to starting a business in Australia is to choose a business name and of course and check for the availability of your preferred business name. You can check this for free on the ASIC Connect homepage. Head to where it says ‘Search ASIC Registers’ and select ‘Check Name Availability’ from the drop down menu. This will tell you if anyone else is currently using your business name.
You then need to check if it’s available as a domain name for your website and email addresses as well as a handle for your preferred social media platforms. You can check all these in one go with this handy tool. Please note that you can as well carry out your trademark check.
STEP 2: ABN and Business Name Registration
Your ABN (or Australian Business Number) is a unique 11 – digit number that identifies your business to the government and community. Interestingly, applying for ABN is free but to register your business name will cost you $36 for 1 year or $85 for 3 years for sole-traders and companies.
Please note that if you want to register your business as a company you also need to pay a company registration fee for which you will receive an ACN (Australian Company Number). This starts at $479 but can go up to $2000 depending on the type of company you would like to be structured as.
It’s very much advisable you take your time to decide on your business name before you go about creating assets like your website URL, logo or any other designs. Otherwise, you’ll need to change everything in the event your business name changes.
Also, when creating a business logo, it’s worth considering if you need to patent it to protect yourself from copyright infringement. Note that you can register your ABN and business name separately if you wish, but it’s easier to apply for both at the same time.
STEP 3: Trademarking your Business Name
Despite the fact that registering your business name means it is registered nationally, it doesn’t mean another business can’t operate with a similar name. If you require exclusive trading or branding rights for your business name, you need to trademark it.
You can actually register your trademark yourself at ipaustralia.gov.au and trademark fees vary based on how many classes you wish to include in your application. The minimum cost is around $250 per class and most small businesses only need one or two classes. Please note that once registered, your trademark is protected for 10 years in all Australian states and territories.
STEP 4: Register for the Correct Taxes
When you start a business in Australia, you absolutely must register for the correct taxes to avoid legal implications. Have it at the back of your mind that the taxes you must register for are dependent on the type of business you choose to start, with some applicable to every type and others only mandatory for certain types. Some examples include:
- Goods and Services Tax (GST): This is compulsory if your business has a turnover of $75,000 AUD or higher
- Pay as You Go (PAYG) withholding tax: This is required if you need to withhold an amount for tax purposes, such as paying wages or salaries
- Fringe Benefits Tax (FBT): If you’re lucky enough to be able to provide perks like a company car to your employees, then you’ll need to register for this
STEP 5: Get Insurance
In Australia, all businesses are expected to purchase the appropriate insurance cover and the cost vary greatly. Generally speaking, the riskier your business, the higher premiums you will need to pay. For example, professionals providing investment, legal or medical advice will pay higher premiums than graphic designers, interior designers and bookkeepers as the financial or health risk to the recipient is higher.
The required level of cover also determines the cost with most insurance companies providing cover for $1 million, $2 million, $5 million, $10 million and $20 million. A sole trader will also pay a much lower premium than a company with 12 or more employees.
It’s up to you to decide what level of cover you need. As a guide, professional indemnity advice for sole traders providing low risk advice starts from approx. $350 per year.
STEP 6: Register your Domain Name
Have it in mind that you can only complete this step after you must have secured your business name and ABN as it’s only possible to get a .com.au address if you’re a registered Australian business. Also note that the domain name you pick should be related to your business in some way and make it a lot easier for prospective customers to find and recognize.
Although you might have the perfect domain to go with a killer business name, but you still need to check that someone else hasn’t taken it already. In Australia, there are many sites that can help you with that. Immediately you’ve found a domain name that isn’t taken, you can go to the .au Domain Administration Ltd (.auDA) website to find links to domain registrars and resellers.
To give you an idea of cost, expect to pay between $5 and $10 a month for your first year with prices going up to $15 to $25 a month after that. If your website is complex with lots of high res. photos and videos, you may need to purchase higher level plans ranging between $30 – $50 a month (plus extra if you require additional products and services).
In Conclusion;
It is important to state that there is no fix amount when it comes to starting a business in Australia. Some of the costs listed above are what you are expected to pay to the government of Australia. Any other costs incurred are personal and should be handled at your discretion.