starting a business 101

Have you got an idea for a business but unsure about the technical things you need to set up? I (Glen James) have got you covered! Save this blog to come back to later or forward this to a friend who’s been thinking about starting a business.

at minimum, what do you need to start a business?

First up you need a business idea! After that, legally you’ll need an Australian Business Number (ABN), and you might consider paying to register a business name. You may also want a separate bank account and a way to invoice your clients (we’ll get into some options for this soon).

at what point should you set up an ABN?

When you want to start your own business or register a company to trade in Australia. Note: when you apply you’ll need your tax file number (TFN). You can apply for your ABN here

are there any ongoing fees for an ABN?

No.

does an ABN expire?

No – but if you stop trading it may be cancelled.

by setting up an ABN does this mean that you need to forevermore submit a quarterly Business Activity Statement (BAS)?

No – a quarterly BAS is only required for Goods and Services Tax (GST) registered entities. You must register for GST if you turnover more than $75,000.

at what point should you be seeking advice from an accountant?

I’d recommend seeing an accountant in the first year of tax returns.

should you start as a sole trader or company?

There’s nothing wrong with starting small and building over time, so you could start as a sole trader and transition to a company structure with the guidance of your accountant if it suits your situation.

do you have to come up with a cool business name for an ABN and/or can you have multiple businesses attached to the one?

You can use your own name or register a business name (which you register and pay for here). You can add a registered business name later if you haven’t decided on your business name just yet. And yes, you can have multiple businesses associated with one ABN.

If you do register a business name, it links back to your ABN. Then across things like your website and invoices you’ll want to include mention of your trading name in your disclaimers/small print – here’s the one we use on the this is money website:

SYMO interactive Pty Ltd trading as this is money…

Once you have your ABN set up, and your business name registered, you’ll be able to see this information on the ABN Lookup website – it’s all public information. So if you searched for ‘this is money’ on this site, you’ll see all the details relating to my podcast business.

what happens if you change names or structure?

If you change names – it’s OK. If you change structure you’ll need a new ABN.

what costs do you need to keep in mind if you are planning on starting small?

Annual accounting fees and tax. For tax I’d recommend putting 20-25% of your income in your first year of business into a separate bank account so you’re prepared for tax time.

what invoicing programs/platforms exist that won’t eat into your profits?

If you’re keeping costs down you can just create a Word or Google Docs template and email it to your clients as a PDF! If you’re prepared to invest into a formal accounting system you have options like Xero, Quickbooks, MYOB, Bonsai, Parpera – plenty out there to choose from.

should you set up a separate bank account for the business?

Knowing that your ABN is linked to your TFN, if you’re a sole trader you can just use your personal bank account. Keep in mind, however, that it might be a whole lot easier to manage your income and expenses in a separate bank account.

If you’ve transitioned to a company structure you’ll need a separate bank account.

I hope this is helpful! Focus on starting small and building over time. The main thing is to have a strong business idea and work through these technical things slowly.

If you’re keen to plug into podcast episodes about business stuff I’ll be sharing them on the this is business feed - subscribe to stay up to date!

Good luck,
Glen