When setting up a business in Australia, speed, cost and caution are paramount for any business owner. Several inquiries into the how and when are made and an effective set-up plan is adopted. One of the overriding considerations in business ventures pertains to finance, particularly the cost of doing things. Therefore business owners must know the costs they will incur when setting up a business.
Having conducted your market research and inquired into the productivity, customer base, target market, competitor landscape, access, or barriers to entry of the line of business you would like to pursue, you should then plan for the following costs:
Start-Up Costs
1. Business Name Registration Costs
The first step is the acquisition of the Australian Business Number (ABN) without which you cannot conduct business legally in Australia. The generation of the ABN number is usually free.
The next thing to do is to register a business name. Charges for registering a business name depend on the type of entity you are registering; whether it is a company, sole proprietorship, or partnership. For example, registration of a proprietary limited company (Pty Ltd) with the Australian Securities and Investment Commission will require $479, whereas a business name for a sole proprietorship venture is below $ 50.
Additional costs include trademarking your business name. Trademarking helps avoid any third parties from conducting business in your organization’s name. This will require you to conduct a name availability search to see whether your proposed name is registered by another entity. If not, then proceed to trademark your business name or logo.
2. Registration of a domain name
The costs of designing a website can go from a few hundred dollars to a couple of thousand dollars. Free websites are simple to create and manage lesser volumes when it comes to sales and analytics. However, if your business will need a more complex website, the more expensive it will be.
Several website hosts generate personalized domain names, which you can register and use.
3. Office Space Costs
The expenses of securing office spaces are dependent on the type of business you are running, the location you would want to set it up and the size you desire. Many businesses typically obtain a lease or purchase a location to build on. A deposit is required.
In some instances, the business may require to obtain several permits and licenses from specialized agencies or the local government before the business rents space. These licenses can include Environment Assessments, building plan approvals from the local government among others.
4. Equipment and Inventory Costs
Obtaining the needed equipment may be one of the highest expenses when it comes to setting up a business. Every business requires some essential machinery, tool, or gadget to run. Equipment could range from sewing machines, sports equipment, cutlery, smelting tools, and so on. Really, the list is inexhaustible.
5. Software and Technology
The type of business will dictate the software needed to help in its administrative or operative functions. Technology such as; the point of sale terminal tech, inventory management software tools, customer information repositories, bookkeeping tools may be acquired by the business.
The costs of each of the software to be purchased are subjective and are dependent on the provider who will take into consideration factors such as the size of the business, the volume of transactions, and the business needs. The initial purchase of the necessary technology may be quite expensive.
Recurring Costs
6. Running Expenses
These are the daily operational costs of running a business. They may consist of utility bills from telephone bills, electricity bills to water bills and strata fees.
7. Insurance Costs
It is always prudent to take out an insurance cover for your business to protect from any harm or damage that may ensue. Most business insurance covers require a monthly premium deposit. However, depending on the nature, size, and line of business you have ventured into, quarterly payment arrangements can be agreed upon.
8. Marketing and Advertising Costs
This can be done before you officially launch or after the launch. It also continues, during the lifespan of the company. Marketing is crucial to any business enterprise, it is how the business can get customers, consumers, or clients.
A marketing budget should be set aside for this purpose. The costs in marketing may include flyer or brochure printing costs, signboards or billboard costs, social media advertising, and Google ads.
The costs may steepen if you hire a professional marketing team to do this for you.
9. Manpower Costs
The right personnel is capable of propelling the business forward and making it not only profitable but also distinguishable. A majority of businesses tend to pay their employees every month. You should always consider this cost especially at the start-up of the company when the company is yet to have an influx of customers.
If you are planning to outsource some of the services this will also increase your running costs.
Compliance Costs.
10. Taxes
Payment of taxes is mandatory, failure to which several sanctions are provided by law. As a business owner, you should first identify the type of tax you are legally required to pay and register for the same. Thereafter, you are mandated to file returns with the tax agency and keep a comprehensive book of accounts.
Additionally, to meet your tax obligations, you may need to set up various tax management strategies. Such tasks may necessitate professional help from qualified and competent accountants. find out more about this local accounting firm in Chatswood.
11. Consultancy services
Consultancy is necessary during the setup and throughout the lifespan of your company. It helps you identify the right structure for your business, develop strategies to ensure continuous cash flow, identify the best ways to protect your assets, and help in the fulfillment of the necessary compliance regulations.
Conclusion
The process of setting up a business may be tedious and daunting to many. However, you do not have to walk alone. With the right guidance and support from your Chatswood accountant, you are sure to be on your way to success.
Feel free to contact us for any further inquiries or consultancy services on setting up your business in Australia.
