From Dream to Reality: The Costs and Process of Starting a Small Business in Australia

Numbers Attuned
Jan 30
2 min read

Starting a small business in Australia is an exciting journey, but it requires careful planning, financial investment, and adherence to legal requirements. Whether you’re launching a café, an online store, or a consultancy firm, understanding the process and associated costs can help set you up for success. Below, we outline the key steps and expenses involved in getting your business off the ground.

Step 1: Choosing a Business Structure

The first step in starting a business in Australia is deciding on a structure. The four main types include:

Sole Trader – Simple to set up, low cost, but personal liability for debts.
Partnership – Shared responsibility between two or more individuals.
Company – A separate legal entity offering limited liability but higher costs.
Trust – Used for asset protection and tax benefits, but complex to manage.

Step 2: Registering Your Business

Once you’ve chosen a structure, you need to register your business, which involves:

Australian Business Number (ABN) – Free to obtain via the Australian Business Register (ABR).
Business Name Registration – $42 for one year or $98 for three years through ASIC.
Company Registration (if applicable) – Approximately $576 for a proprietary company.
Domain Name Registration – Typically $10-$50 per year for a .com.au domain.

Step 3: Legal and Compliance Requirements

Depending on your industry, you may need:

Licenses and Permits – Costs vary based on location and industry (use the Australian Business Licence and Information Service to check requirements).
Insurance – Public liability insurance ($500-$2,000 annually) and workers’ compensation (if hiring employees).
GST Registration – Required if turnover exceeds $75,000 per year.

Step 4: Setting Up Finances

Proper financial management is crucial. Key costs include:

Business Bank Account – Many banks offer accounts with fees ranging from $0 to $10 per month.
Accounting Software – Xero, MYOB, or QuickBooks ($20-$50 per month).
Bookkeeping or Accountant Fees – Can range from $500 to $3,000 annually.

Step 5: Marketing and Branding

To attract customers, you’ll need an online and offline presence. Costs include:

Logo Design and Branding – $100-$3,000 depending on the designer.
Website Development – $500-$5,000 for a professionally built site.
Social Media Advertising – Varies but can start from $100 per campaign.
Business Cards and Promotional Materials – $100-$500.

Step 6: Operational Costs

Ongoing costs include:

Rent (if applicable) – Small office or retail spaces can cost anywhere from $1,000 to $5,000 per month.
Utilities and Internet – $100-$500 per month.
Stock and Equipment – Varies depending on business type.
Staff Wages – Minimum wage in Australia is currently $23.23 per hour (as of 2023).

Total Estimated Cost to Start a Business

The cost of starting a small business in Australia varies depending on the industry and scale, but a rough estimate is:

Sole Trader: $1,000 - $5,000
Small Retail or Service Business: $5,000 - $50,000
Larger Business with Employees: $50,000+

Final Thoughts

Starting a business in Australia requires financial commitment, strategic planning, and adherence to regulations. By understanding the costs and processes involved, entrepreneurs can avoid surprises and focus on building a successful venture. With the right approach, your business dream can become a profitable reality.