What follows is just a general note on the subject of starting your own home business in Australia. You must always carefully consider whether or not such a general note suits you and your circumstances. Specific professional assistance may be best and what is required for your particular circumstances. This note is intended as a general overview to give you a bit of an insight into the journey ahead.
Multiple formals steps must be taken before you start your own business and you will have to liaise with multiple organisations to get this right.
First step is to decide what form of business are you going to run. You may need professional advice from either a lawyer or an accountant before you make this decision. Are you going to become a sole trader or are you going to register a company? A partnership or a trust? They all have very distinct advantages and disadvantages. Have a look at this link to help you decide: business structure.
Once you have decided on your business structure, your next step is to visit the Australia Tax Office’s website as you need an Australian Business Number (“ABN”). If you are going the sole trader route and you already have an ABN, you can possibly just go ahead and register an additional trading name on the ASIC website under your existing ABN if this is the right thing for you in your circumstances.
In Australia, if you want to start a business and trade under a name other than your own name, you have to register a business name with ASIC, the Australian Securities & Investments Commission. That is a clear and simple rule that you need to comply with and fortunately it is pretty easy to do online. Check out their website. It is full of handy guidelines and instructions that are not only highly recommended but essential to you getting through this phase. Click on all those links it gives you and watch and read as much as you can.
According to the ASIC website “a business name is a name or title under which a person or entity conducts a business”. One of the big challenges of course is to find a name that no one else has registered as yet. This is referred to as “business name availability”. ASIC has a handy tool on its website where you can instantly search their records and see if your name is available. Don’t get too excited if your name is available. You need to do some other checks on other websites before you go ahead and register that business name if you want to register a matching domain name and/or subdomain on a website hosting site like Yola or Shopify or an online community of sellers like Etsy. You also need to check that there are no registered trademarks that could cause you trouble. The ASIC website has more tips on this subject. These domains and subdomains don’t have to match perfectly but it is just so much better if they do. Once you can get business names and domain names that you are happy with you can go and register everything quickly.
Next step is opening up a bank account. The bank will also want your ABN and proof of registration of your new business name. Once that is all set up you will be ready to go with your business name, domain name and bank account.
Your next step is thinking about how you are going to deal with your bookkeeping. Because you now have an ABN and you are running a business, you are obliged to lodge an annual tax return with the ATO even if you don’t earn enough to pay tax. In order to prepare your return, you need to keep adequate bookkeeping records for your business. Once again, it is probably a good idea to get some professional advice for this. Some people manage with the pen and pencil method, others with an Excel spreadsheet or two, while others prefer to use bookkeeping software such as MYOB or Xero even though it will cost them something in the form of a subscription. The advantages of software are significant as they not only provide you with fancy reports with the press of a button (once you know how to use it!), produce professional looking invoices, have magical bank feeds that allow your bank transactions to appear in your software and make the reconciliation of your bank statements a much more pleasant experience and almost, dare I say, fun! Your books live in the cloud so you don’t have to worry about all your precious business records being destroyed by some or other misfortune in your home. The numerous automated bookkeeping tasks that the software can do will save you so much time and frustration that it is worth paying for it.
Remember, this note is not intended to be professional or otherwise advice specifically for you. It is just a bit of general fluff and stuff regarding that exciting time when you start building your own business. Your bank may possibly also offer you advice along these lines together with offering you actual services to achieve these tasks. It may be worth your while having a chat with them and ascertaining their fees.
Good luck and have fun!