A guide to setting up a small business

Guide to setting up a small business

A guide to setting up a small business

A guide to setting up a small business

Starting a small business is an exciting adventure that requires careful planning and organisation.

There are several essential steps to take, from registering for an Australian Business Number (ABN) to setting up financial systems and securing insurance.

We’ll walk you through the process, ensuring you have a solid foundation for your entrepreneurial journey.

Registering your business and getting an ABN

The first step is to decide which structure is right for you, with options including setting up a company or partnership, or being a sole trader.

The right choice will depend on the type of business you operate, its size, how you wish to pay tax, and how you want to protect your assets.

An accountant can help you decide on the right option for you.

Then, you need to apply for an ABN. This is a unique 11-digit number that identifies your business.

You will need to include this number on tax invoices and other documents.

Tax time essentials

It’s vital to understand your tax obligations as a small business owner.

You will need to register for Goods and Services Tax (GST) if your business earns more than $75,000 a year.

This is a broad-based 10 per cent consumption tax. If your business collects GST, you may need to pass this money back to the government, offset by any GST you pay.

You may also need to pay income tax and payroll tax, and your accountant can help you set up systems for this.

You must also understand the Australian Taxation Office’s (ATO) rules and keep accurate records of your income, expenses and tax deductions.

Writing a business plan

A well-thought-out business plan serves as a roadmap for success. It outlines your goals, target markets, products and services, marketing strategies and financial projections.

Start by conducting market research to understand your industry, competitors and potential customers. Identify your unique selling proposition (USP) and create a marketing plan to reach your target audience.

A business plan helps you stay focused and is an important requirement if you want bank finance or external funding.

Setting up financial systems

Effective financial management is crucial for the success of any small business.

You will likely need to open a business bank account to separate personal and business finances. Accounting software such as MYOB, QuickBooks or Xero may be a useful software to help track income and expenses and generate financial reports.

Implement a bookkeeping system to maintain accurate records, including invoices, receipts and payroll information.

This will simplify tax reporting and enable you to monitor the financial health of your business.

Published On: August 4th, 2023Categories: Business Insurance

Does your business have the right cover?

Starting a small business in Australia requires careful planning and adherence to legal requirements. For any business insurance needs, speak first to a qualified practicing insurance broker to understand the products that are right for you and your business. Our experts will work with you to ensure your business has the right cover, should the unexpected happen.
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