Setting up a new business require a lot of hard work, effort and time. Of course starting anything is hard, how much more when you’re aiming to start a company.
Most people end up failing because of lack of determination, patience and not planning well. It is very easy to throw in the towel in the initial phases of starting a business, but if your venture survives, the rewards are well worth all the challenges you will face on the journey to success.
Here is a comprehensive guide on how to set up a brand new business step by step:
1. Build an idea.
All the big companies you see out there started with an idea. Is there something that you are very passionate about or is there something that you very knowledgeable about? Whatever the interest is, it is possible to turn it into a successful business with hard work and determination. Think about your idea and what makes it unique.
2. Determine the legal structure of your business.
Before registering, you will need to decide what type of company or business it is. How many owners does it have or are you the only owner? Does anyone else have interest in your concept? These are all sorts of things that will affect how you set up the structure.
For example, if you own the entire entity by yourself and plan to be accountable for all legal obligations and debts, you can go for a sole proprietorship type. There is also another type of entity known as partnership, where two or more people are held liable as the owners of the company.
On the other hand, if you want to distinguish yourself from the company’s liability, there are many types of corporations that you can go for. They usually make the company a separate legal entity apart from the owners which mean the company can assume liability, own property, enter into contracts or pay taxes. There is also one common structure that is associated with many small businesses, the Limited Liability Corporation or LLC. This type of entity has features of a corporation but allows for tax benefits of a partnership.
Nevertheless, it is up to you to figure out which type of business is best for your future objectives as well as current needs. You can visit the Australian Taxation Office site for information on different structures. Or make an appointment with your accountant who should be able to tell you the best way to set up your business, and will assist in setting it up for you – the right way – the first time.
If you need a hand, there are plenty of fantastic businesses out there that will assist you. We highly recommend Lawpath – tell them we sent you!
3. Register for ABN (Australian Business Number).
This procedure is mandatory under the Australian law. And depending on an entity’s location and circumstances, it must adhere to various taxation requirements. The ABN also allows you to easily identify your company to government agencies as well as other companies. To apply for the number, go to the Australian Business Register site and fill in your details. It is free and completing the form can take about 20 to 30 minutes.
The online form will require you to provide:
- Your details
- Business information
- Associate details
- Activities of the business
- Reasons for the application
More information in connection with ABN, can be found on the ATO site.
4. Choose and register your company name.
This is the name under which the company will run. To ascertain whether the name you have chosen is available, head to ASIC’s (Australian Securities & Investments Commission) website for name availability check. Once you find a name, you will need to register the name so as to secure it. This is also done at ASIC’s site and all you have to do is create an account with the commission and then complete the application online. This should take about 20 minutes and it will cost you $79 for 3 years or $34 AUD of one year.
5. Set-up a Bank Account.
You will also need a bank account to set up your business if it is a separate entity to you. And even if you are a sole trader, it is good to have a separate account for the company’s finances. This is not mandatory if you are in a partnership or sole proprietorship, but it is strongly recommended, because you have to keep clear and verifiable accounts for taxation and auditing purposes.
A very basic bank account is pretty straight forward to set up with your local bank. You will just need all the details from your accountant.
6. Buy your domain name (website address).
It doesn’t matter whether the business will be online or a brick and mortar store, but you will need a website, which means securing a domain name. When selecting a domain name, go for a name that is easy to remember, represents the company and is three syllables or less. To register the domain name, head to the .au Domain Administration Ltd site for links to resellers and registers, and to confirm current options and fees. This is where you can also use the domain name to create email and social media accounts.
7. Purchase an insurance policy.
Employee compensation insurance is a mandatory requirement for employers in Australia. The premium rate will depend on the nature of the company’s main product or service. Also purchasing a good insurance for your business before you open it is something that you should consider. Dealing with unforeseen incidents like customer lawsuits, theft or property damage can be very expensive, and you need to be assured that your company is protected.
8. Register for GST.
Business.gov.au states that “As a business owner, it’s your responsibility to register for GST if your turnover exceeds the $75,000 threshold or is likely to exceed it. The ATO advises that if you’ve just started a new business and expect it to earn $75,000 or more in its first year of operation, you should register for GST.”
A GST or Goods and services tax “is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.”
9. Grow your business.
Launching your is just your first job as an entrepreneur. For your company to stay afloat and make profit, you will need to grow the business. And one of the best ways to achieve growth is by collaborating with existing brands. You can also reach out to established bloggers or other related businesses and ask for promotion in exchange for a free service or product sample.