Starting or opening a business in Australia can be tricky and challenging, especially when you don’t know where to begin. Starting and running a business isn’t easy, but that shouldn’t stop you from chasing your dreams and becoming wealthy.
Well, as they say, “Knowledge is power,” and with the right tips, you should be able to start up a business in Australia without stress. Hence, this guide will provide tips to help you start and run your business in Australia in 2022.
Tips for opening a business in Australia 2022
Tip #1: Determine the structure of your business
Structuring your business is the very first step to take when starting a business. This step is important because without adequate knowledge of the type of business you want to start, moving forward with any business would be difficult.
In Australia, there are four common entities (business structures) for people who want to start up a business. The four most common business structures are:
- Sole trader
- Company
- Trust
- Partnership
Before choosing a business structure, ensure that you go through the different structures available before deciding which structure suits or meets the need of your business the most.
To help you make the best decision for your business, you can consider key factors like the licenses required, possible personal liability, taxes, and the amount of control you’ll have over the business once opened.
Tip #2: Register your business
Before any business is recognized as an Australian business, the business must have a registered Australian Business Number (ABN). The ABN is a unique 11-digit number that’s used to identify your business.
When registering a business name, choose one that identifies your company to your customers and makes it easy for them to differentiate you from your competitors. If you want to register your business, then you can do so from the Business Registration Service.
Tip #3: Apply for a Tax File Number (TFN)
Regardless of the type of business you want to run or the type of business structure you want your business to have, having a Tax File Number (TFN) is a must. The TFN is a unique number issued by the Australian Taxation Office (ATO) to organizations and individuals.
There are different types of TFNs, and the type your business will need depends on your business structure, number of employees, and the fringe benefits your employees enjoy. This is another reason why you should be careful about your choice of business structure.
After acquiring the TFN for your business, the next thing you should understand is the different types of taxes that can apply to your business. Some of the ways your business can be taxed in Australia include:
- Income tax for business
- Pay-as-you-go (PAYG) withholding
- Goods and services tax (GST)
- Capital gains tax (CGT)
- Pay-as-you-go (PAYG) installments
- Payroll tax
Tip #4: Set up record-keeping and accounting systems
When you want to start a business in Australia, the Australian Taxation Office (ATO) requires that an income tax return be filed each year to report your business income and claim deductions. In addition, you might also have to file annual returns or reports if you are registered for other types of taxes. Many businesses and companies in Australia are required to submit declarations of their business activity.
The ATO also requires that you keep most records for five years so that you may be able to present them to the ATO whenever it’s needed. If you are not certain about storing them on paper for that long, then you can store them electronically. When making your records, write in English language or a language that can be easily converted to English.
Tip #5: Manage your business insurance
When starting a business in Australia, it’s important that you are aware of the types of insurance that are compulsory for many companies in the country. Some of the compulsory insurance types include:
Worker’s compensation insurance: This insurance type is obligatory for any company with one or more employees.
Public liability insurance: This insurance is used to protect your business from third-party injury or death, and it’s mandatory for certain types of companies
Third-party personal injury insurance: This insurance type is compulsory for companies or businesses that own vehicles. It is often a part of your vehicle registration fee.
