Before starting your new business, you will need to adequately allocate funds for business establishment costs, which will vary greatly depending on your company’s location and activity.
Starting any new business venture requires money, yet the necessary amount varies enormously depending on the scale of your new business, what you plan to sell and the industry in which you will operate. There are however many fixed costs applicable to all new businesses.
Business Registration Costs
One of your very first expenses, and one for which there is no getting around, is the registration of your business. While it is free to apply for an ABN, there are costs for registering a business name with ASIC and registering a website domain name.
Remember that when starting a business, you can expense the purchase of all business-related equipment rather than supplying them at your own cost. That involves everything from stationery and paper supplies to computers, printers, phones and various business insurances. Many home-based business operators like to use a post box to receive incoming business mail, or you may need to lease business premises and connect utilities to those new premises.
If your business is going to produce a product rather than a service, such as some form of manufacturing, then you will need to allocate funds for the purchase of your raw materials. When sourcing materials, try to negotiate discounted rates for trade or repeat orders to save yourself money over the longer term. As well as the materials, consider what machinery or equipment you may need when producing your goods, and whether you intend to purchase or hire these.
Will the business just be yourself or will you need to take on staff? Hiring staff can be a significant cost, and you will also need to factor in ongoing wages, superannuation contributions, cover while they are on leave and potentially payroll tax.
Intellectual Property Protection
An often-forgotten element of starting a business is protecting your intellectual property rights. Trademarking your products or services will stop competitors taking your ideas and developing their own versions. You may also want to consider trademarking your business name, website and logo to differentiate your business from other players in the marketplace.
While this tends to more be an ongoing operating expense than a startup cost, you may need to consult a solicitor, accountant or business advisor before your business starts trading. Using the services of an accountant will also be a regular ongoing expense to budget for when managing the company’s tax affairs.
It can be all too easy to overlook expenses involved in the set-up of a new business, which can prove to be a costly mistake. Ensure all your bases are covered so that your business can launch on the best footing. Intuit also has a handy checklist on how to start a business in Australia, which you may find useful.