How to Start a Small Business in Australia: A Complete Guide
Small businesses have become an increasingly popular avenue for aspiring entrepreneurs to enter in Australia. In fact, as of June 2024, 97.2% of all Australian businesses were identified as small businesses, having had less than 20 employees under contract.
This overwhelming statistic indicates the success of the small business structure in the Australian market. So, if you want to become one of these successful statistics it is best to fully understand just how to start a small business in the first place.
This complete guide to starting a small business in Australia will provide you with all the information a new entrepreneur could want or need. There is no need to enter the Australian market with any confusion or hesitance so long as you follow these steps.
Step 1: Formulate a Business Idea
A successful business starts with an innovative idea.
Before you can begin the documentation and the planning required to formalise a small business, you need an idea to sell. Take the time to brainstorm some ideas, the most sustainable ones being those that meet the following metrics:
- It is something you are passionate about and have the motivation to pursue
- There is a demand for the product or service
- There is room for growth in the future
- Offers a solution to a common problem
- Is relatable to others
- May build on existing products or services
If you need a hand coming up with a business idea, ask others for feedback or suggestions. Otherwise, you can check out our guide to the Best Small Business Ideas for Australia in 2025.
Step 2: Design Your Business Plan
One of the most important documents required in opening a small business, the business plan is a comprehensive overview of your new venture. It helps you prioritise what you need to get your idea operational, while also mapping out why investors should support your business.
Typically, a business plan will include the following elements:
- A summary that introduces the business idea
- A mission statement
- The expected business structure
- Details on the products and/or services offered by the business
- Market research into the business’s industry and competition
- Further research into how to compete against others in the local market
- Identification of the target market
- Advertising and marketing strategies, including expected distribution channels like social media marketing or television ads
- Financial information like statements, balance sheets and projected targetsAll in all, a business plan is crucial both to you as a business owner and as a tool to convince investors to get on board. With sufficient research, analysis and creativity, you can create a guide that will aid you throughout the business journey.
Step 3: Create a Business Structure
When starting your own business, you will need to decide on its legal structure. That is, what kind of business will it be recognised by the Australian legal system? This categorisation will impact what kind of registrations your business will need, alongside specific legal and tax obligations.
The main business structures used for Australian businesses typically include:
Trust
The trustee of a business, who can be a singular person or the company, is responsible for decision-making. They will represent the interests of trust members or beneficiaries while also covering the income and losses of the trust.
Sole Trader
One of the more commonly used business structures, a sole trader set-up means that the owner is the only one legally responsible for the business. While employees can always be hired, it is the boss who takes responsibility for any debts or losses accrued by the business.
Partnership
Rather than the owner of the business being the only one responsible, the role is shared by two or more people.
Otherwise, the structure is very similar to that of a sole trader. It is just that any debts or losses will be split between all partners, rather than concentrated on one person.
Company
This structure is particularly unique as the responsibility of the business is not placed on individuals’ shoulders. Rather, a company becomes its own legal entity, separate from the business itself.
In this case, debts and legal concerns, such as who is responsible for being sued, are taken on by the company.
Choosing a company structure also means more complexities to navigate as it comes with unique tax and legal obligations.
Step 4: Find a Source of Funding
During the formalisation stage of starting a small business, you will need to secure a reliable source of funding. These funds will cover key financial costs that come with opening a new venture, especially since most entrepreneurs cannot cover said costs with personal finances.
Generally, a prospective business owner will seek out a business loan for funding. There are a multitude of business-based loans available at most banks, such as lines of credit or term loans. Always check with a trusted provider on what kind of loans they may have available for your business.
Alternatively, funding can come from private lenders or investors. Some business owners may choose to source funds from family and friends, or professionals in the industry that they personally know.
However, each method of lending comes with its own benefits and risks. Thus, it is best to research your options extensively before signing any contracts or asking others for funding.
Step 5: Select Your Business Model and/or Location
A business model is essentially a guide to how your business aims to make a profit. It is often included in a business plan to offer insight into market research, budgeting efforts, and many more factors key to success.
The model you choose for a business also encompasses how it operates and where its services are available. There are multiple different models to choose from, but you should always consider what is the easiest method of connecting with your target audience and to generate revenue.
The 5 most common types of business models used in Australia include:
1. Brick and Mortar
The main method of interacting with potential customers is through a physical storefront. While you can enjoy reduced overhead and more publicity with this model, it does also come with additional expenses and the need to hire more staff.
2. e-Commerce Website
Sales for this model are primarily conducted through an online store, making it accessible to potential customers outside of the local radius. The prevalence of social media platforms and the internet in today’s society makes an e-commerce website a fairly successful online business model.
3. Subscription
This type of model relies on customers providing ongoing payments to the business to access their products or services. By turning away from the usual one-time purchase structure, a business ensures a recurring source of revenue.
4. Franchise
Rather than a business being restricted to one physical location or model, a franchising approach ensures wider access for customers. It does so by the franchiser creating a blueprint of a successful venture and offering a copy to potential franchisees.
This model is typically used for businesses already proven to be successful and have the brand recognition that comes with it. Each new store is run by a franchisee, but the original franchiser claims a portion of their success in profits.
5. Hybrid
Get the best of both worlds by combining two or more business models into one structure. The models used must be complementary, such as a subscription service integrated into an online business idea that also offers online sales of products.
There are more business models to explore and choose from. Be sure to identify which model will work best for distributing your business’s products and/or services, as well as which will connect best to your target audience.
Step 5: Propose Your Business Name
Before you go ahead and register your business, you first need to come up with a name.
The name of your business is the foundation for your brand and public identity. Not only will it need to be attention-grabbing, it also needs to advertise what your business has to offer.
Spend time thinking of what values or unique selling points you want your business to advertise. You may also want to create a business name that distinguishes you from competitors in the industry.
When you come up with a business name, you will also need to ensure it is available for use in Australia. Another company may already be using your desired name, which means heading back to the drawing board for new inspiration.
Once you have a name, however, you can go ahead with officially registering your business.
Step 7: Register Your New Business
Every business in Australia must be suitably registered to be legitimate in the eyes of the government. No matter what business structure or model you choose, it must be submitted to the Business Registration Service.
This process only takes a few minutes to perform, but you can also take the time to apply for relevant business insurance. Some types of businesses require certain legal cover in order to operate above board. So, be sure to check if your business structure requires a particular insurance product when registering.
Once you have begun the process of registering your business, you can also begin applying for an Australian Business Number if required.
Apply for ABN
The Australian Business Number (ABN), also known as an Australian Company Number, is an identifying code used by the government, public and other businesses. It is an 11-digit code that is different to your tax file number.
ABNs are typically used for:
- Verifying your business to other organisations when ordering on invoicing
- Claiming energy grants or goods and services tax (GST) credits
- Getting an Australian domain (.au) name
- Avoiding pay-as-you-go (PAYG) tax on any business payments
Generally, your business will require an ABN if it fits the following criteria:
- Is a Corporations Act company
- Is an enterprise being started or expanded into Australia
- Your business is creating products/equipment associated with Australia’s indirect tax zone
Always check your business is entitled to an ABN before applying. Otherwise, you may face prosecution or more serious charges.
Step 8: Hire Staff & Decorate Business if Needed
Most businesses cannot operate without a reliable set of employees to carry out tasks and connect to customers. Once your business is clear to be up and running, it is time to seek out staff.
In order to effectively hire staff, you need to consider or implement the following:
- What skills your business need for successful operations
- What work basis of employees do you need, such as full-time, part-time, contracting or casual
- How the employee hierarchy is to be structured
- What roles need to be filled and their priority in hiring
- What legal obligations do you need to fulfill for pay, superannuation, leave, and other employee entitlements
- How the employee contract is to be set up
While finding, hiring and training your new employees, you can also take the time to decorate your business as needed. While those choosing an e-commerce platform model only need to focus on website design, those with a brick-and-mortar store will need to buy equipment, furniture, technology, and other effects to make a welcoming space.
The interior design of your business is another crucial factor in marketing your brand. Thus, take the time to make a space that will welcome your target audience and draw in loyal customers.
Step 9: Set Up Official Communications
No matter if you are implementing a physical and/or online business idea, you will need a reliable point of contact. By setting up official communication channels, you are creating avenues for customer conversions, showcasing your reliability, and also designing a new marketing tool.
It is recommended that all businesses have a professional phone number. With this number, you can create a more legitimate image for the public than using your personal mobile number. It can also encourage the public to reach out for answers on your products, which, if sufficient customer service is offered, can convert them to paying customers.
Depending on what telecommunication provider you choose, you can also gain access to a range of business phone plans. These plans can come with their own benefits, including unique call features to aid in business operations. Over time, these benefits can help optimise customer retention rates and revenue acquisition.
Step 10: Develop a Marketing Plan
Look to the long-term development of your business by designing a marketing plan. While the initial documents such as a business plan can help map out the initial goals and actions of your company, the marketing strategy aims to encourage growth.
This plan aims to create campaign or one-off ideas to expand your business’s success. It organises marketing ideas into one convenient document that can be referred to by multiple teams or investors.
Most marketing plans incorporate the following:
- Each campaign’s mission directive and goals
- Buyer personas to match your target audience’s needs
- Campaign or marketing budgets
- Deliverables
- Industry tactics
- Competitor research and/or insights
Step 11: Open Your Business
In the end, the final step to starting a business is opening up shop. Mark the moment with a grand opening to draw in initial customers and generate interest.
A successful business opening may require you to:
- Take the time to research what will incentivise your target audience to connect with your business
- Advertise the event ahead of time on various channels, including social media platforms, public fliers or word of mouth
- Run a contest or giveaway to excite customers
- Collaborate with local businesses to display products or services in their spaces
- Distribute branded goods ahead of opening to ensure your logo and name is known
- Involve the local community
Making an event of the opening day will hopefully generate the interest required to get your business off to a good start. However, many potential customers may have questions before they engage with your business. They may not have the time to connect in person, either, so be sure to provide a point of contact to build those connections.
Establish Your Small Business in the Market With Professional Phone Numbers
Legitimacy, publicity and customer satisfaction can all be met with the presence of a professional phone number in your business. So, get your business off on the right foot by providing them with a 1300 or 1800 phone number from Teleca.
No matter if you are launching an e-commerce site or a local cafe, the best chance your small business has to succeed is by getting its name out there. So, draw customers in by providing them with a reliable point of contact.
Additionally, the unique call features that come with Teleca’s phone plans ensure that your business will be running smoother than ever. Call routing, voicemail and Interactive Voice Response (IVR) options will guarantee this.
Interested in learning more?
FAQs
How Much Money Do You Need to Start a Small Business in Australia?
The amount of money required to get a small business up and running in Australia varies greatly. Initial and ongoing costs depend on varying factors such as the scale of the business, its required equipment, insurance, and many more.
Take the time to research the industry market ahead of time and your desired business structure to begin calculating costs.
What Do You Do if You Are Not a Citizen or Permanent Resident When Opening a Small Business?
Anyone who is not an Australian citizen or permanent resident will require a visa when opening a small business.
There may also be alternate legal and tax obligations to fulfil as a foreigner. Always be sure to check with the Australian government’s legislature to determine what guidelines your business will need to follow.
Do You Need a Licence to Sell Online in Australia?
Most businesses in Australia will require an Australian Business Number and Tax File Number to operate, including selling products online. However, you can check if further licences are required for online sales through the Australian Business Licence and Information Service (ABLIS).
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