Starting a Small Business in Australia: A Comprehensive Guide

Want to learn how to start a business in Australia? 

Well, it's no easy feat, but we're here to give you the tips and tricks for turning your business idea into reality in the Land Down Under.  There are over 2.5 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 [1]. 

Entrepreneurs across the country have found success by 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 with starting your own business, let's learn how to start a business and what it takes to succeed. 

Develop a business concept 

Developing a clear and compelling business concept is crucial for the success of any venture. It serves as the foundation upon which you build your business and helps distinguish you from competitors. Let's delve deeper into developing a business concept, using examples from both a hospitality-based business (like a restaurant) and a retail business.

Hospitality-based businesses

• Service style: Define the service style of your restaurant. Is it a casual dining place, a fine dining establishment, or perhaps a fast-casual spot? Consider factors such as table service, order-at-counter, or a buffet-style setting.
• Cuisine and menu: Specify the type of food you'll serve. Is it a specific cuisine, fusion, or perhaps a focus on local and sustainable ingredients? Develop a menu that reflects your concept, highlighting signature dishes that set you apart.
• Atmosphere and ambiance: Consider the ambience you want to create. Is it a cozy, intimate setting or a vibrant, energetic atmosphere? The decor, lighting, and overall vibe should align with your target audience and the type of dining experience you aim to provide.
• Unique Selling Proposition (USP): Identify your restaurant's unique selling points. This could be a particular chef's expertise, a signature dish, a focus on locally sourced ingredients, or a commitment to a specific culinary theme.
• Customer experience: Outline the overall customer experience you want to offer. This includes factors like customer service, wait times, and any additional experiences (live music, themed nights) that enhance the dining experience.
• Business income strategies: Consider various strategies for generating business income, such as special promotions, loyalty programs, and catering services. Diversifying revenue streams can contribute to a more stable business income.
• Compliance with services tax: Ensure compliance with goods and services tax regulations. Understand the implications of service tax on your restaurant's transactions and incorporate these considerations into your financial planning.

Retail-based businesses

• Store type and layout: Determine the type of retail store you want to open. Is it a boutique, department store, specialty shop, or an online-only store? Consider the store layout and design to create an inviting and efficient shopping environment.
• Product selection and stock: Clearly define the products you will offer. Are you focusing on a niche market, offering unique or locally-made items? Consider the quality, variety, and exclusivity of your stock.
• Price point and positioning: Establish the pricing strategy for your products. Are you positioning your store as a high-end luxury brand, a mid-range provider, or a budget-friendly option? Ensure that your pricing aligns with your target market.
• Branding and image: Develop a strong brand identity. This includes your store's name, logo, colour scheme, and overall brand personality. Consistency in branding helps build recognition and trust among customers.
• Customer service approach: Outline your approach to customer service. Consider how your staff will engage with customers, handle inquiries, and resolve issues. Exceptional customer service can set your retail business apart from competitors.
• Online presence and business income: In the digital age, establish your online presence. Whether through ecommerce or a social media strategy, ensure that your retail business is accessible to a wider audience beyond the physical store. This can contribute to increased business income.
• Adherence to service tax requirements: Adhere to service tax requirements applicable to retail transactions. Stay informed about any changes in service tax regulations that may impact your business operations and financial planning.

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. However, 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 work 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. Any debts your business gathers are your own.
• Partnership: This company structure 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 own 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. You can do this by considering the nature of your business, the scale of operations, and your future plans. Each business venture structure has different implications for tax obligations, liability, management, and continuity. So do some research and decide which is best for you.

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. They'll be able to give you that sound legal or tax advice you need.

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 could get 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 and business name
• Executive summary
• Business concept
• Sample menu
• Market analysis
• Target market
• Company and management
• Design
• Location 
• Marketing plan
• Outside help
• Financial projections

This step may seem tedious and overwhelming when first looking to open your business, but being prepared is key and it'll already put you ahead of most businesses without a plan! Learn more about writing a business plan in our complete guide.

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 and business finances 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 startup funds from these sources:

• Savings
• Family and friends
• Co-owners
• Private investors or Venture capital 
• Small business traditional loans
• Epos Now Capital
• 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

No matter the nature of your business, having the right POS system is paramount for efficient management.

• Hospitality POS for streamlined services: If you're in the hospitality sector, especially if you offer delivery and takeaway services, consider leveraging a specialised Hospitality POS system. This ensures not only smooth in-house operations but also facilitates online ordering. Platforms like Epos Now Order and Pay can be integral, allowing customers to place orders online.
• Retail POS for integrated inventory management: On the other hand, if you're running a retail store with an eye on expanding into ecommerce, a Retail POS system is your go-to. Look for a solution that seamlessly integrates with your ecommerce platform, saving you valuable time and ensuring a unified approach to inventory management. This integration not only enhances your operational efficiency but also contributes to a cohesive customer experience.

Whether you're in the bustling hospitality scene or the dynamic retail space, the right POS system can be a game-changer. It goes beyond just payment processing. It becomes the central nervous system of your operations, allowing for efficient tracking of sales, inventory, and customer interactions.

Setting sail for Aussie business success!

So there you have it. Our complete guide to starting a SMB in Australia. It may not be easy. but armed with the right know-how, you're on track for success. From a standout concept to smart structures and savvy location choices, each step is crucial.

Craft a solid business plan, secure funds wisely, and embrace modern tech like a robust Point of Sale system. Your journey doesn't end on opening day—stay adaptable, customer-focused, and true to your concept.

Australia offers vast opportunities! May your business thrive Down Under. Here's to charting a course for prosperous Aussie entrepreneurship!

Liked this blog? Check out our additional resources for small business owners, including our how to run a small business guide and our how much money you need to start a business blog.