How much does it cost to start a business in Australia?
Taking your business from a great idea to a living, breathing entity is a serious challenge. It doesnt just require a ton of hard work, but a significant amount of money. Understanding the initial costs of starting a business is vitally important, otherwise you could be blindsided by unexpected expenses that torpedo your company before its even had a chance to grow. Read on to find out. Initial costs of starting a business in Australia  First off, lets look at the mandatory costs associated with registering a business in Australia. Although theres no fee for obtaining an ABN (Australian Business Number) or to lodge a TFN application, you will need to pay a fee to register as a company and to obtain a business name. You can register as a company for a fee of $506 (for a proprietary limited company), while obtaining a business name costs $37 for 1 year or $87 for 3 years. Common business start-up costs and expenses  Beyond the mandatory business start-up costs, there are a broad range of expenses that you will need to plan for. Some of the most common small business start-up cost examples include:  Salaries  Wages for your staff is probably the most important expense to consider. Minimum wage in Australia is currently $19.84 per hour, or $753.80 per week (38 hours), however depending on what sort of roles youre hiring for, youll probably need to pay considerably more to attract the level of talent you need to take your business to the next level. Rent  Another significant cost to start-up a business that you need to consider is rent. The amount you can expect to pay will depend on where youre renting, as well the size of premises that you need. According to commercialrealestate.com.au, average office rentals in Australia range from $1025 per square metre per annum in Sydney CBD to $380 per square metre per annum on the Gold Coast. Professional fees  You also need to think about the critical business functions that you may need to outsource, and the fees that go along with that. Paying legal and accountancy fees isnt cheap, but its vital for businesses in the early stages to get the compliance and regulatory side right from the start, which could lead to a significant expenditure in professional fees. Insurance  Even if your businesss risk protection needs are relatively low, its vital to pay for insurance. Some of the most useful types of insurance for Australian businesses include professional indemnity insurance, public liability insurance, and product liability insurance. The amount youll need to pay will depend on several factors, including your history of claims, the type of business youre running, and the provider you choose to go with. These small business start-up cost examples cover items like vehicle rentals (especially important for businesses where logistics play a key role), office supplies (paper, printers, stationary, desks, computers, etc. ), and marketing fees. Dealing with the cost to start up a business  We know this may seem like a significant capital expenditure just to get your business off the ground, but dont be too discouraged  there are many ways to navigate the initial costs of starting a business. First off, its important to remember that there are many different funding options for new business ventures in Australia, including bank loans, crowdfunding, government grants, venture capital, and equity financing. Explore the different options and see if any of them are right for you. Clearly, its also important to ensure a steady cash flow right from the jump. Thats why an automated payment collection service like GoCardless could be an ideal early investment. Making use of Direct Debit, you can collect payments automatically on due dates. That means no more waiting around for your clients to pay you, wondering if youve got enough capital to see you through to the end of the month  just a simple, stress-free payments process that keeps your cash flow healthy. GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.