How Much Does It Cost to Start a Business in AustraliaFebruary 20, 2018
Starting a business in Australia can have variable costs. Depending on the business structure you choose and the type of business you are starting, costs vary from $400 to thousands of Australian dollars.
If you are taking over an existing business entity or buying a franchise costs tend to vary greatly per entity. Reasons such as the type of business/franchise, and the size of will determine costs – equitably, the bigger the business, the more expensive it will be.
Table of Contents
- Costs of Registering a Business in Australia
- The Most Common Expenses Every Startup Should Consider
- Additional Costs You Should Consider
- Cost of Buying a Franchise in Australia
Costs of Registering a Business in Australia
To start a business in Australia there are a few mandatory things you should do before anything else – have an ABN (Australian Business Number) and a business name. Without them, you can’t legally run a business.
Mandatory for: Sole Traders & Companies
In order to start a business in Australia, you will have to register and obtain an ABN (Australian Business Number). It’s mandatory for both companies and sole traders. Obtaining an ABN is free.
Business Name Cost
Mandatory for: Sole Traders & Companies
The second thing every startup in Australia needs to obtain is a business name. You can register a business name for one year (which will cost you $35) or for three years (the cost of which is $82).
Registering a Company Fee
Mandatory for: Companies
Unlike sole traders, companies are required to register as such. The starting fee for registering a company is $479 and depending on the business structure the costs can go up to a couple of thousands.
The Most Common Expenses Every Startup Should Consider
As a startup, you will have to consider other costs as well. There are ongoing costs that you will have to plan for. Quite some time will pass from starting your company to finding your first customer and you have to plan and prepare for the expenses.
The most common costs you will face are:
Running a business means working with people and of course, that means payment. The average annual salary in Australia varies from $69,477 to $89,846 depending on the region you’re working in. It’s best to plan the salaries of your employees and how many people you will need.
If you will be the only employee, it’s most likely that you will have to hire someone else to do the job for you, then you would have to plan what you will outsource, as you can’t do everything by yourself. You can see the full-time wages in Australia by region and industry here.
As a business, you will need equipment to work with. For different businesses, the amount of money needed to acquire this equipment will differ. You should research the cost of the equipment and properly plan how much it will cost. Equipment is considered every machine you need in order for your business to operate. It could be a professional coffee machine, a carpet cleaning machine or a powerful computer. This will most likely take up 30% to 40% of your budget.
Depending on the type of business that you are going to operate, you may or may not need to rent a physical space. If you are interested in renting an office space, prices in Australia start from $300, For retail locations (restaurants, beauty shops and others) prices are higher, because of the higher income of the business.
Today a website is mandatory for every business. While a simple representative website will set you back a couple of hundred bucks, a retail online shop can cost upwards of $2000 to make and operate.
Additional Costs You Should Consider*
While the above ones are only basic costs, you will have to plan for additional expenditures.
*All of the expenses vary from business to business, depending on yours, different fees and charges may apply.
Every new business needs to get the word out there. This is a tough job to do, yet an important one. The way you are going to do the marketing of your company depends on the type of business you have. Check out the best advertising techniques in 2018.
It doesn’t matter if you’re going to run your business from home, or you run a retail company, you will have office supplies that you should be able to cover. Paper, printers, ink, folders and everything else that your office may need.
Every business needs an insurance. While every niché needs different types of insurance, you will have to consult with a professional which type will be best for you.
Every successful business has a good accountant. The accountant is a vital part of the money management of every company. You’ll also know that your taxes are paid properly and on time.
Vehicle Renting or Buying
Depending on the type of business, you may require a vehicle. Cleaning companies, restaurants and other businesses where logistics play a role demand a vehicle that will allow you to do your work freely.
Other costs may include phones, fax machines, security system, computer software and franchise fees if you’re a franchise owner. You can find a list of more equipment of capital costs here.
Cost of Buying a Franchise in Australia
Buying a franchise can spare you the hardships of starting a business from on your own. You will work with a stable business model and skip the fails and errors, which accompany every new entity.
Depending on the business you chose your upfront investment will vary. The average upfront cost is around $25,000, according to Franchising Australia surveys. Other franchisors choose to offer lower upfront investment and work with commissions in order to give more people a chance to start a business.
The money you invest include rights to provide services under a certain trade name and training. Some franchisors, like us – Fantastic Services, provide help for buying vehicles and equipment and even generate leads. The latter is probably the most important aspect, as the biggest problem for a new business is finding customers, but not a lot of franchises do that.
If you decide to partner with us you won’t have to deal with marketing, scheduling and customer support, as we are responsible for this. You can focus on growing your business and providing the best services out there.