How to Start a Business in Australia
There are over 2.4 million actively trading businesses in Australia. And the number is rising by 2% year on year making Australia a country that values business and being self-employed.
Entrepreneurs across the country have found success from starting restaurants, retail stores, bars, cafes and more. If you aspire to achieve the self-employed dream, then you may want to join the ranks of these successful business owners.
To help you get going, let’s see how to start a business and what it takes to succeed.
Develop a business concept
One of the most important things to have in mind is a clear concept for your new business. In a hospitality-based business, this can include the service style of your restaurant, the type of food you serve, and the atmosphere. In retail it can be the type of store you want to open, the stock you will offer, the price point of your items and the branding.
Business structure
With the concept for your potential business created, it’s now time to turn your attention to the business structure side. Starting any kind of business is risky in today's economy due to the high competition. But forming an understanding of the problems you will face and working out a solid plan on how you’ll handle them before you start your business will drastically increase your chances of success.
Before commencing the works on your business, you’ll need to thoroughly work out what structure will suit your potential business’s style. Australian business structures make a significant impact on legal and operational risk, asset protection, tax, legal costs and potential clientele.
The common forms of business structure in Australia are:
Sole Trader
As a sole trader, you will be solely responsible for the liabilities of your business. This business structure has risks as it has no separate legal existence from its owner.
Partnership
A partnership is a relationship between two or more people bound by a contract. Profits, losses, risks and assets are legally shared between the relevant parties according to the terms of the contract.
Trust
A trust is where a business is transferred to a third party who has legal control and has a duty to run that business to benefit someone else.
Company
A Company is a legal entity that is separate from its shareholders. A company director has additional legal and reporting obligations.
When starting your business and choosing the right business structure, one of the first things to take into consideration is which one of the choices will have the best long term benefits. Additionally, because there are a number of advantages and disadvantages for each type of structure, it is recommended to consult a business advisor, accountant or solicitor for advice before making any decisions.
Write a business plan
When looking to start a business, it’s crucial that you have a plan. Consider a business plan as your roadmap to success.
Without this map, you will potentially be lost in a dark, overpopulated industry with no idea where your business is going. With stats that show nearly 60% of hospitality businesses do not make it past the first year, making sure you are well-prepared is crucial when starting out.
Additionally planning before you commit to anything serious like signing a lease on a venue is certainly recommended. Before making any kind of commitment, make sure you thoroughly research the market, view the competition, find the ideal location, develop a unique concept, and ensure you can fund it properly.
While business plans generally follow a fairly standard format, different types of businesses like hospitality-based businesses need to cover specific topics that retail business plans don’t. It’s important you know the difference between these industries and understand exactly what your business plan needs to include.
A strong hospitality business plan should include most of the components below:
- Cover Page with branding
- Executive summary
- Business concept
- Sample menu
- Market analysis
- Target market
- Company & management
- Design
- Location
- Marketing strategy
- Outside Help
- Financials
This step may seem tedious and overwhelming when first looking to open your business, but being prepared is key. Learn more about writing a business plan.
Raise funds
Now with your business plan written you will have a better idea of how much it costs to start a business. While startup costs vary, you should be prepared to spend several thousands of dollars before opening your doors.
On top of this, you will need to have money in reserve since it may take some time to generate enough revenue to sustain your business.
As a business owner, you can acquire capital and start-up funds from these sources:
- Savings
- Family and friends
- Co-owners
- Private investors or Venture capital
- Small business traditional loans
- Small business grants
- Crowdfunding platforms
- Equipment financing
Choose the right location
Location is everything. Choosing the perfect location for your future business can be the defining difference between success and failure.
If you pick an area that is already serviced by businesses similar to yours you could go bust. Or if the area is too hard to get to, then you may miss out on the foot traffic your potential business needs to thrive.
When on the hunt for the perfect business location, keep these things in mind.
- Demographics
- Visibility and accessibility
- Competition
- Size and space
- Affordability
- Leasing vs buying
Look for areas where the competition is more scarce and make sure it will attract the right customer base. Or maybe your business model could benefit from being around numerous other similar style businesses, so look for that.
It’s best to enter your search for the perfect venue with the assumption that most people will be unwilling to accept inconvenience. If the potential space has limited parking spaces or is tricky to access, then you risk potential customers giving up and going elsewhere.
The affordability of a venue is another big factor when it comes to selecting your location. Forecasting exactly what you can afford, and what your budget will allow, is very important. Ideally, you want to source a location with leasing or mortgage costs that are well within your budget. This will give you a better chance at succeeding rather than operating with an additional financial burden.
Invest in equipment and inventory
No matter if you are working solo from your garage or leading a large team in a retail store, you will need many supplies to get started. This will be a significant investment, but you will want to minimise costs as much as possible. Buying used equipment or office supplies may be a wise move.
For starters, many businesses will need the following:
- Furniture
- Shelves and retail displays
- Uniforms
- Kitchen equipment in hospitality businesses
- Storage supplies
Hire the right employees
When choosing potential employees for your business, always remember they will be the face of your brand and will need to be able to represent you in the best way possible.
Before you begin the hiring process it’s important to invest time in identifying the exact skills you are looking for in prospective employees and the roles you want to fill. You will need to understand the type of values, character traits and skills that will fit your business style.
Advertise your business
With your team established, and your venue ready to go, the next step is to get the word out about your opening. This is where you want to create hype around your new business so it entices customers to come along and give it a try.
Social Media: Never underestimate the power of social media. Before opening, create a business page on Facebook, Instagram and any other social platforms that are relevant to your business style. Populate the pages with imagery of your food or stock, go behind the scenes of the fit-out, and include any information customers need to know. This can include location, opening hours, opening dates and any promotions you may have.
Create a website: Have an easy to navigate website that communicates all the necessary information about your business like menus or stock, opening hours and contact information.
Create a Google business page: 46% of Google searches are for local businesses, which means most people rely on google listings to find what they are after. Additionally “near me” searches have increased more than 500% so without your google business listing you could be missing out on these searches.
For more ideas and advertising methods to try when opening your new business, read our guide to innovative marketing methods.
Have the right tech to run and manage your business effectively
Lastly, you will need a Point of Sale system to manage your new business efficiently. Depending on your business style and needs, you will have specific requirements from a POS system.
If you are a hospitality business offering delivery and takeaway services you are going to need an online ordering platform, like Epos Now Order and Pay. If you are a retail store and looking to have an e-commerce platform as well, you will need a POS system that can integrate directly to save time and seamlessly manage inventory.
Set up your new business for success with Epos Now
- Build your very own digital menu and offer online ordering with Epos Now Order & Pay.
- Integrate with popular e-commerce platforms like BigCommerce and be omnichannel ready.
- Integrate with over 100+ leading business tools that allow you to streamline marketing, improve customer loyalty, and simplified accounting processes.
- Manage your data from anywhere with 24/7 cloud access