1. Decide on a business – what are you selling? What services are you providing? Although this is an operational issue, it is the starting point of this entire process.
Make sure you map this out carefully. Prepare a business plan either yourself (ask us for a template if you need one), or engage a professional to assist you.
Make sure the business idea is a feasible one, before you proceed to the next step.

After this step, this brilliant business idea that you have will start to cost money, so ensure you have the funds set aside to execute.

2. Decide on a structure – very commonly overlooked, and the default structure is to operate as a sole trader. It is important that you meet with an accountant in the planning stages, to ensure that you are in the right structure, right from the start.

Yes, there will be costs involved, but our advice is not to skimp on these costs, as it will cost you later on as the business grows, and not just in monetary terms either!

The structures available for you to choose from are:
a) Sole trader
b) Partnership
c) Company (Pty Ltd)
d) Trust – Fixed, unit, discretionary

Each structure has its’ own advantages and disadvantages – contact us for a detailed structure overview summary.

3. Decide on a business name / entity name – often confused by new business owners.
To arrange for a business name, you must register it with ASIC. You must set up an ASIC Connect account, and apply from there.
http://www.asic.gov.au/for-business/registering-a-business-name/

But before you can register the business name, you must have an ABN (Australian Business Number). And to get an ABN, you need to have the structure set up already. Confused?
https://abr.gov.au/for-business%2c-super-funds---charities/applying-for-an-abn/apply-for-an-abn/

It all has to happen at once, which sometimes confuses many people.

Also, your company name (eg. ABC Pty Ltd) can have multiple business names attached to it. Eg. ABC Pty Ltd trading as SPC Goods, and VPA Services and also MKL Babyware. So this one company has three business names, and can trade 3 separate businesses should it choose to.

4. Ensure you have all the correct registrations – Again, where possible, engage an accountant to assist in the process. It really does help if you have the foundations right. We have seen clients come to us, when they realise that they are knee-deep in paperwork, only to realise that they did not even register for GST from the beginning, and was charging GST to their customers.

a) GST registration – recommended for a number of reasons. If you believe you will be earning over $75,000, best to register from the start. Also shows your customers that you are not earning less than $75,000.

b) ABN registration – required to operate a business

c) Tax File Number – also required for tax purposes

d) PAYG Withholding Tax registration – required if you are employing staff, or employing yourself (for the latter, only if you are operating as a company or trust)

e) Fuel Tax Credits – For those that operate heavy machinery

5. Set up all your insurances – Ensure you have adequate insurances in place. This includes:

a) Public liability – protects you and your business against the financial risk of  being found liable to a third party for death, injury, loss or damage of property, or pure economic loss;

b) Professional indemnity – protects you from legal action as a result of your advice;

c) Product liability – important if you are selling tangible goods

d) Workers Compensation insurance – required if you employ staff, and pay wages of more than $7500 per year

e) Income protection insurance / life insurance/TPD – see your financial planner for this. Very important that you are protected if you are the main income earner in your family

6. Open up a separate business account – this is important, so that your personal transactions are kept separate from the business transactions.

If you are charging GST, we would recommend also setting up a separate GST account, so that when you receive payment for the GST on your invoices, the 10% is transferred into this separate account. When it comes time to paying the GST to the ATO, you will have the funds ready. It can be a lifesaver, when cashflow is tight.


7. Setup of an accounting software or record keeping system – Have a chat with your accountant about this, and what options there are available to you. Again, this is best to be set up from the start, as it will save you a lot of heartache later on.

Typical software available include Xero (our favourite), MYOB, Intuit, Sasuu, etc.

Otherwise, an excel spreadsheet cashbook may be sufficient also, to keep costs down.

8. Staffing issues – If you decide to employ staff right from the beginning, ensure that you:

a) Have a Tax File Number Declaration Form completed for each staff (available at most newsagency, or from your accountant)

b) Ensure you are giving them a payslip for each pay (this is a legal requirement)

c) Ensure you are paying super into their nominated super fund (currently at 9.5%)

d) Ensure you have adequate workers compensation insurance cover