Embarking on a new business venture is both terrifying and exciting. While you definitely would have the freedom of being your own boss and master, and working on something that you are passionate about, you do now have a checklist of items that you need to tick-off before you can kick off.
To help you out, we have listed 5 steps that you need to do when you’re starting out to become an entrepreneur in Australia.
1. Check your Business Idea’s Feasibility
Before starting your business in Perth, Melbourne, Sydney or anywhere in Australia, you need to first do some groundwork on whether there is a market for the product or services that you intent to provide with your capable hands. On top that, it’s a good idea to know who the existing players are in that field and performing a self-analysis to ensure that you have what it takes to compete with them. If you had done this step, great! Proceed on.
2. Sort out your Visa
If you are a student or going to study in Australia, and you would like to start your business right now, first of all, kudos to you! We admire the entrepreneurial fire that you have. However, we’d like to season your enthusiasm with a dash of realism. Firstly, an international student on student visa in Australia can run his/her own business, provided if you’re not working more than 40 hours in 2 weeks (no limit during term breaks!). Besides that, if you’re serious of studying in Australia, then realistically speaking, you would need to spend 6 – 10 hours on classes, tutorials, assignments, among others.
So, unless you’re a genius, you would probably find it hard to balance these out. However, for those of you whom are 100% in on getting a business up in Australia, there are 2 types of visa that you would have to consider i.e. the Business Investment Visa and the Business Innovation Visa. Each of these visa have their own terms and conditions so we suggest that you take the time review them (or consult Kitson Migration Services!), but as the name indicates, the Business Investment visa are for investors seeking to invest with funds of atleast AU$1.5 million while the Business Innovation Visa are for business owners and entrepreneurs.
3. Choose your Business Structure
This depends on the type of business that you are planning to register and run in Australia. Some business structures work for certain types of business, but others, not so much. The common form of business entities in Australia are:
This structure is suitable for people whom are looking to start small. Most sole props are run by a one person, handling all matters. This structure is suits people whom are looking to work alone. As a side note, income and expense coming from your sole prop business is deductible as personal income tax income.
The most complex business structure in Australia (and the world), a corporation is a separate entity brought to life by regulation and laws, and thus are much more subjected to it. Adopting this structure has its pro and cons – being that you have more privileges running as corporation, but are subject to taxes and laws.
Partnerships are great in-between strategy, compared to the both ideas mentioned above. There are 2 forms of partnerships:
- General Partnerships
In this form, owners are partners in everything and they share responsibility for the partnerships’s debts, decision making, and other obligations
- Limited Partnerships
A limited partnership can have 2 types of partners. General partners are the front-runners, they run the business and assume all the liability that the partnership faces.
Limited partners are investors seeking a return on the partnership, they have no role and no control thus no responsibility over the company.
- General Partnerships
4. Permits, Licenses, Documents and Australian Business Number.
In order to run legally in Australia, you and your business would need to have several documents in place. Here are the common ones:
- Certificate of Incorporation
- Operating Agreement
- Business Plan
- Insurance Policy
- Non-disclosure Agreements
- Contract Agreement
- Advertising Permit
- Sales Tax License
- Health Permit
- Fire Permit
- Country Permit
You would also have to obtain an Australian Business Number, which is 11-digit unique identifying number that is issued to resident and non-resident entities that conducts any business in Australia. You will have to register with the Australian Government to obtain this number, which will be used for tax purposes and displayed in sales-related documents.
We hope you’re not feeling overwhelmed yet. Fret not, contact us for any legal queries you might have and we’ll hook you up with the right sources.
5. Source for Funding
Lastly, but arguably the most important step in this list, cash flow will be your primary concern when you’re starting out. Not even the best business plan helps when you can’t pay the bills to keep you on your feet. Luckily, there are options for you! Depending on where in Australia you are starting out, there are state-funded as well as government-sponsored grant and assistance that you can apply for. Here’s where having a solid business plan with realistic financial projections help.
One more tip – set up your shop or office at any one of Australia’ many co-working spaces. You be able to drive your costs down significantly and build your network of business peers and partners.
Setting up your own business in Australia may not be the easiest task to do but the long-term rewards are worth it. We wish you all the best!