How To Setup A Business In Under 30 Steps
Whether you are a sole trader or setting up a small to medium business, this guide will walk you through how to set up a business in Australia step by step.
You will be taken through all the main steps needed to get your business off the ground including any links to important reference materials
This step by step guide will assume you already have a business idea and have determined its viability. If not, we recommend saving this guide and coming back to it once you have settled on the type of business you want to start.
Note: Skip any steps not relevant to your business.
Business Planning Phase
The first steps of how to set up a small business are all about the planning and overall business goals. The steps below will guide you through the beginning of your journey as a sole trader or business owner.
1.Picking Your Business Structure
What structure will I need for my business?
The first thing you will need to understand is which business structure is relevant to you.
There are a few different structures in Australia and they are all different, so it is important you choose the correct one before moving forward.
A sole trader is the most basic business structure. The ATO definition of this structure is a small business where you are the only owner and also control the business itself.
You will need an ABN to operate as a sole trader which is free to obtain and we will link our ABN guide below.
As a sole trader, you take full legal responsibility for the business and any debts it may incur. You can employ people as a sole trader but you are NOT able to employ your self. Essentially you are the business.
Sole Trader References
The second structure in this guide is a “Company”. Unlike a sole trader, a company is much more complex and the company itself is its own legal entity. This means you will have a higher cost associated with the set up of a company and also increased reporting requirements.
A company is run by its directors and owned by its shareholders so unlike a sole trader you may own a company but not manage it.
Similar to a sole trader, a company can employ people, but the main difference is you can also be one of those employees.
You will need to apply for an ACN (Australian company number) in order to set up a company along with a TFN as the company being its own legal entity will need its own tax file number.
If your thinking about setting up a company, our advice is to seek professional advice from a accountant. If you’re comfortable doing the paperwork yourself, we will include the ACN application below.
Next on the list is a partnership. A partnership is essentially two or more sole traders who operate a business together and share legal responsibility. This is a great way of structuring your business so that all owners are ensured their share of any profits. This is also good to keep everyone liable for their share in any debts.
The partnership itself will need to apply for an ABN the same as a sole trader. You will also need to apply for a separate TFN for the partnership which is free to do and we will include the link below.
2.Creating Your Mission Statement
What is your main purpose?
The nest step in ” how to set up a business ” is your mission statement.
This is a short but precise statement that will state your purpose and the overall goal of the business. All businesses have a mission statement regardless if you are a sole trader or large company you should have one too.
This should immediately tell its reader exactly what you are all about.
If you get stuck you should check out the great article below from Blu Leadz who list 18 amazing examples form some of the most successful companies in the world.
Mission Statement References
3.Create A Business plan
How will I get to my goal?
Creating a business plan is crucial to your success no matter the industry or type of business you are setting up.
A good business plan will be split into 3 main types (there may be more for larger businesses). The first is your strategic plan, then your operational plan, and finally your financial plan.
A strategic plan is the higher-level direction of the business. This is where you will put your mission statement and expand from there. Understanding how to set up a business will all stem from your strategic plan as it will give you an outline of where you are heading.
A strategic plan is usually long term 5-10 Years and keeps your ultimate goal and mission statement as is a guiding factor.
Strategic Plan References
An operation business plan more short term based. The best way to think about it is, the strategic plan is where you’re going, and the operational is how you are going to get there.
This type of plan should have smaller more frequent goals and should also be reviewed and adjusted regularly.
When setting up a business plan you should start from the top-down, with your operational plan being a lot more detailed and outlining how each business component will contribute to the main goal. If you are a sole-trader then this plan will outline how you yourself will be contributing.
Operational Plan References
One of the most important things to understand when learning how to set up a business is how to create and stick to a good financial plan.
A financial plan will keep you on track and ensure you do not run out of money and have to close your business down.
A good plan can also make sure you are re-investing into the businesses growth and sustainability so that you are around for a time.
Creating this plan will also outline if your business idea is viable and give you the confidence that you will be able to fund it with your current resources. We recommend using a bookkeeping platform like Fresh books to ensure you stick to your plan.
Financial Plan References
4.Survey The Market
Will your plan work?
Now that you have created a plan, you will need to prove it has the potential to work. This is when you would survey the potential market and find out what they think of your product or service.
This is very different general market research which should be a component of your small business plans as discussed above.
When you survey the market you are taking an MVP (minimum viable product) and going out in the market place to get peoples thoughts. A great example of this would be a free taste test followed by a short survey, or simply offering the product for free in exchange for a more detailed analysis.
Doing this will also help your business make and last-minute tweaks if necessary.
Market Survey References
5.Find a Mentor & Support Group
Who can share you journey?
Finding a mentor who can guide you and help with the first steps of your launch can be game-changing. when looking for a mentor you want to connect with someone who has taken the exact steps you are planning.
A mentor in your specific industry would be great, but ultimately someone who has been successful in any industry will have immense knowledge and be able to add value.
Join A Group
Joining a group of other sole traders or company owners is also a very important step. Understanding how to set up a business is one thing, however, once you are launched you will need a support group to bounce ideas and share your challenges with.
Luckily, these days this is a very easy step as Facebook and other social platforms have made it really easy to find and join groups all around the world.
Mentor & References
Congrats!! Your planning phase is complete.
The next phase when learning how to setup a business is your infrastructure and collateral.
6.Business Logo And Tagline
What will people see?
Your logo and tagline are going to form the starting point for your branding and collateral. When setting up your business infrastructure having your logo complete will save you a lot of time and make everything else flow that much easier.
A logo should be simple, easily recognizable and give its viewer a taste of what to expect from your brand. We recommend hiring a graphic designer on Fivver to draft up some variations for you.
A tag line should be a short yet effective sentence that tells people exactly what your do. A fantastic example of this is BMW, their tagline is “designed for driving pleasure”.
Business Logo References
7.Register A Domain Name
Where will you be found ?
Whether a sole trader or large company your domain name is now one of the most important things you need to think about when setting up a business. Your Domain name will be your online address and be one of the first things that people see or hear about.
When setting this up we advise using a local hosting company that you will also be used for your website hosting (we will link one below).
The shorter the better when it comes to domain names, and remember .com is the best choice if you have an international customer base. If your customers are in Australia then .com,au is fine.
Please note: If you are going to hire a website developer to build your site, or if you are familiar with WordPress then the below Sitegrounds link is the one for you.
If you have little knowledge about web site design then you may wish to use a platform like Weebly which is much more beginner-friendly.
Thinking of building the site yourself? Check out our guide: How to create a website for under $300
Domain Name References
8.Setup Your Hosted Email
Does your email look professional?
A hosted email is the next step in our ” How to set up a business ” guide. This is when your email will have your domain name instead of Gmail or live. As an example firstname.lastname@example.org.
This is a small step but actually very important and can have a huge impact on your customer’s perception.
The simplest way to do this is to purchase one through the same hosting company you set up your domain with. The cost of this is only a few dollars a month and well worth every penny.
Siteground provides this free with all hosting packages
Hosted Email References
9.Change Your Voicemail
What impression do you want to leave?
This is a really simple one, especially for sole traders. Ensure your voicemail states your business name and appropriate details. The last thing you want is a potential customer to be turned off or confused because or an un-professional VM.
10.Get A Po Box
Do you want people to know your private address?
While your business may not have a physical location, there will be times that you will need to provide an address to others. In this case, you want to avoid giving out your personal address. Even if you are a sole trader with no employees, get your self a Po Box, their cheap and can protect your privacy.
Po Box References
11.Secure Your Social Media Accounts
Will your name be taken?
Securing the right social media accounts is also another important step when setting up a business. You want to ensure your account name matches your domain name as closely as possible.
Ensure you have set up the correct platforms relevant to your customer base, and also ensure the accounts are all businesses versions.
If your a sole trader you may already have a personal account that your want to use, do NOT do this. Keep your accounts separate and relevant to your industry and customer base.
We also recommend suggesting your self a social media management tool like Promo Republic, this will allow you to manage all your accounts in one place and save you a heap of time.
Another important part of how to set up a business is to ensure all your legal requirements are met. This will protect you and more importantly your customers.
12.Obtain Relevant Licenses
Are you allowed to operate?
As a sole trader or larger business owner, it is your responsibility to ensure any legal requirements are met for your customers, your staff and your self.
We recommend getting advice from your state and local government bodies to ensure you have everything in place. You should also understand any licences that are industry-specific such as trade qualifications and accreditations.
Below we have linked the Australian government business website which can guide you through any relevant licencing requirements
Business Licence References
13.Insuring Your Business
What if something happens?
To ensure you are not left with a huge financial burden in case the worst happens, you should definitely get insurance coverage for your business. In some industries, you will not even be allowed to operate until you have adequate cover.
Setting up a business insurance policy can be complex and hard to understand, we advice you find a professional insurance advisor to assist you and your business.
14.Protecting Your IP
Can someone steal your brand?
If you are trying to build a brand then your IP is going to be extremely important to you and require protection from others looking to rip it off. Your IP stands for intellectual property and includes things such as product design, brand name, logo etc.
When you set up a business you can actually protect these things by registering them in the country or countries you operate in. The same applies for a product you have created, you can patent your product to ensure that no one can cop it.
We have included a link below that will go into this in more depth.
15.Learn Your Obligations
Do you know what your rights are?
As a sole trader or employer, you will be dealing with customers on a regular basis and is important you understand their rights in these dealings. It is also important you understand your own rights should there be a conflict needing resolution.
The ACCC is the main regulatory body in this matter and can provide any information required based on your industry.
There are also government departments under the consumer affairs umbrella that can help educate you on any obligations.
Consumer Obligation References
16.Publish Your Terms & Conditions
How is your customer informed?
Ensuring your business has clear terms and conditions is crucial. Your terms should be easy to understand and also easy to access and read. Even if you have not set up your website yet you should have a published document you can send to a potential customer that outlines everything in layman’s terms.
Your document will be relevant to the industry to operate in and must comply with the ACCC guide lines.
Terms & Conditions References
Business Tools & Software
Leveraging technology to help keep your business running both efficiently and effectively is very important, below we outline some of the best tools and platforms that will help keep your business running.
17.Setup Bookkeeping Software
How are you going to track your finances?
One of the first pieces of software you should get when setting up your business is for your accounting. As a sole trader, your finances may be a lot easier to manage than a company owner, however, it’s vital that you are able to keep track and monitor the financial health of your business at times.
Setting up this software will also allow you to create professional invoices and take payments by credit card which is a must these days.
Below we have linked one of our favourite tools for the Fresh Books. We have also included Zoho One, the best value Business platform.
Bookkeeping Software References
18.Setting Up A CRM
How will your keep track of your customers?
A CRM (customer relationship manager) is a tool used to record and keep track of your customers. It is very important that you are able to view all the customer data and relevant information in a quick and effective way and a great CRM platform will help with this.
There are many good CRM systems on the market, we recommend Zoho One as the best value business platform we have ever reviewed. Zoho provides a CRM, Accounting platform, Email platform and many more apps for one monthly price.
19.Set Up A Email Marketing Platform
How will you stay connected?
A big part of how to set up a business is to build an audience around your brand or products. One of the most effective ways to do this is to build an email list which you should start doing straight away.
Email marketing is one of the most profitable forms of marketing and consistently outperforms most other methods.
Keeping your customers informed of new products and services is another reason building your email list important. Below we have linked the platforms we use personally
If you have gone ahead and set up Zoho One as discussed in the previous section then your all set as Zoho has the functionality built-in.
Email Marketing References
How is your grammer?
This is an important, yet overlooked step for a sole trader, employee, or company owner. Regardless of your role within the business your communication needs to be excellent to both customer and stakeholders alike.
Think about an email you received in the past with spelling mistakes and poor grammar, would you buy from that person?
The Grammarly platform is the best tool for this hands down, It will help correct your writing in real-time and the best part, Its free to use albeit the paid version is far superior.
The next steps are all about your business footprint online.
21.Set Up Your Web Hosting
Are your ready to build a site?
In the previous section of how to set up a business, you had purchased your domain name with a local web host company. Now you need to select and purchase your hosting package from that same company.
Your website domain is the address people will find you, the hosting package is the space that the website itself will be stored and accessed by your customers. Once this has been set up you can start to build your website or hire a developer to do it for you.
If you setup your site using Weebly then it already includes hosting.
Website Host References
22.Set Up Google My Business
Does Google know who you are?
When setting up a business the first place you want to ensure you are listed in Google. you can do this by creating a Google my business directory listing which is completely free and a powerful way to showcase your details to your local customer base.
If you have searched for a restaurant name in google to find their contact details you may have seen a small listing on the right hand or top of the page that provided contact details, opening hours and reviews. This information is the Google my business listing, of the business.
23.Create Your Launch Content
How will you showcase your launch?
Now you are ready to prepare your launch as a sole trader or business owner. This is also an important part of setting up a business as it will be the first impression many potential customers will have of your products and services.
You will now need to start creating your launch content such as social posts, media kits, packages and product descriptions and any incentive you may wish to run.
We recommend using a graphic design tool such as Canva, this tool will be able to assist you in creating any type of content needed to successfully showcase your business in the marketplace.
If you would rather pay someone to do this for you then you can use the Fivver marketplace.
That concludes our guide on how to set up a business. Bookmark this page as we will regularly update the guide or better yet, join The Broke Business email list to get tools, resources and advice directly to your inbox.