How to Start a Business – 2021

Starting a business can be both rewarding and challenging. Not only is it an exciting step towards independence and business success, it is also one of many you need to get right for the sake of your business.

If you are looking to start a business and want to start off on the right foot, keep reading to learn the steps you need to take to increase your chances of success.

1. Decide on your business structure
   

   The first step to starting your business is to settle on a business structure. It is important to choose the right business structure to suit your goals and needs. Each of these business structures has different characteristics and it is important to know which one you want to adopt for legal reasons. In Australia, you can choose from the following business structures:

   • • Sole trader: A sole trader is legally responsible for all aspects of their business and is relatively simple to set up and operate. In Australia, sole traders do not need to register for an ABN (especially if they are at a hobby stage), however, there are benefits to registering for one.

     • Partnership: A partnership is made up of two or more people who distribute income and losses between themselves.

     • Trust: A trusted business structure involves a trustee holding your business for the benefit of others (the beneficiaries). A trustee can be a person or a company and is responsible for the income and losses in a trust.

     • Company: A company is a separate legal entity, meaning it has its own rights and can incur debt, sue and be sued.

       Bear in mind that you can change your business structure as it evolves – however, some may be more complicated to transition into than others.

2. Decide on a company name

   After choosing a business structure, the next step is to pick a company name. Having a business name will help your customers search and recognise your business. In Australia, you will need to register your business name with the Australian Securities and Investments Commission (ASIC) unless you are a sole trader using your own name as a business name.
   
   After registering your business name, it may also be helpful to trademark it – along with any other intellectual property your business may have – to protect its originality and prevent it from being misused by others. You can speak with a trademark lawyer to help you apply for the trademarks you need to keep your business unique and protected.

3. Choose your location

   The final step to starting your business – after taking care of all the initial paperwork – is to choose your location. It is important to spend some time considering your location as this will be the starting point of your business. Depending on whether or not you have the resources to do so, you may choose to rent out a business office space or purchase your own property for the purposes of running a business. You may also choose to work from home – in which you may be able to make expense claims with the Australian Taxation Office (ATO).

After choosing your location, you will also need to register your business address with ASIC. ASIC will use this address to send you all official communications and will list your address as the primary contact method for your business.

Starting Your Business on the Right Foot

It is important to take the correct steps to ensure your business starts off on the right foot towards success. If you are planning on starting your business, be sure to first decide on a business structure, pick a company name, and settle on a business address before proceeding with any other business ventures.