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Starting a business

What is an ABN?

When starting your own business, you have a lot to consider: your product or service, your audience, whether or not you need a physical store, and so on. On top of it all, there’s a whole bunch of granular information to track, like licensing, tax information, and any permits you may need.

One core piece of the small business puzzle is the Australian business number, commonly referred to as an ABN. This number holds a lot of power and can make your life easier, but not everyone needs an ABN. So, let’s take a look at who needs one, why you might want one, and how to apply for one.

What is an Australian business number?

Similar to a tax file number, an ABN is a unique 11-digit number that makes it easier for businesses to interact with the Australian government. It’s free to register, and it’s very secure. Your ABN details will be stored in the Australian Business Register.

But, what does your ABN do exactly? Well, several things.

  • It represents your business entity when invoicing
  • It can be used to represent your business when ordering
  • It allows you to secure an Australian domain name

Think of an ABN as a universal business name tag. This unique 11-digit identifier is yours, and lets other businesses know who you are.


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Who needs an ABN?

Not all people working in Australia will have to have an ABN. If you’re a contractor, you likely don’t need an ABN nor will you qualify for one. But, if you’re starting or taking over a business in Australia, you’ll need to apply for an ABN. The same goes for enterprises and sole traders operating inside Australia.

Businesses outside of Australia that deal with suppliers in the indirect tax zone of Australia will also need to register for an ABN. The indirect tax zone covers Australia, but not the offshore areas or outside territories. So, if you’re operating a business outside of Australia but often secure supplies for business use from suppliers in the indirect tax zone, you will likely need an ABN.

Any business that is based out of another country but operates a location within Australia will also be required to fill out an ABN application.

But, for employees working in Australia, no ABN is required. Only the business owner needs to get an ABN.

The perks of an ABN

Other than being able to flash your cool 11-digit ABN, you’ll have additional perks to take advantage of when you have an Australian Business Number.

After you register for an ABN, you will be able to register a business name and sign up for the goods and services tax (GST). You can also avoid pay-as-you-go (PAYG) tax on payments you receive, and claim GST credits for GST-qualified purchases.

And, you will be able to get an AUSkey, which allows you to transact with government agencies online, be endorsed as a deductible gift recipient or an income tax-exempt charity, and claim energy grant credits.

As previously mentioned, ABN registration also allows you to get an Australian domain name, which ends in .com.au. This can be a great way to promote your business and show that you’re a legitimate entity.

How to get an ABN

An ABN offers numerous perks and is a necessity for many businesses and enterprises. That being the case, you’re likely wondering how you can get yourself an ABN. Fortunately, it’s fairly straightforward.

Before going into the ABN application process, be sure you have an Australian Company Number (ACN). While you can begin the process and then get your ACN, it’s faster to get it beforehand. If you’re just starting your business, elect to get your ACN during your business registration.

Once you have your ACN and you’re ready to get your ABN, you’ll need to follow these steps:

  1. You can apply for an ABN online via the Australian Taxation Office (ATO) website, or you can have a registered tax agent handle it for you. You will need to declare your business structure (e.g., sole trader or company), and have your tax file number handy. You’ll also need your Australian company number (ACN) going into the process.
  2. Collect important tax documents. You’ll want your tax file number (TFN), proof of each business location you own, and information about your employees.
  3. Start and complete the online form and wait for it to be reviewed by an ATO agent.
  4. If they deny your application, be sure to contact the ATO and discuss why you were denied and how you can remedy the situation.
  5. If your application is successful you will receive your ABN immediately. A confirmation letter will also be posted to you within 14 days.

If you prefer to do the entire process offline, you can apply via mail. This requires you request a form from the ATO and wait for it to arrive. Once you have it, complete the process and mail the form off or drop it at an ATO office.

If you opt to have a tax agent complete your ABN application, you’ll only be involved if they need additional information. Otherwise, the process should be very hands-off for you.

Next steps for your business

With your ABN you’ll be able to create an official site, send invoices with ease, and present your business in a new, professional light. Now that you’re set up, the next step would be to promote your business.

Marketing your business is a big undertaking, but there are some steps you can take to get the ball rolling. First, set up social media pages for your company. Then, put into motion social media marketing best practices. And consider starting a blog to create quality content that helps your audience. Be sure to brush up on search engine optimisation (SEO) basics to increase the chances of your content being found.

Further your business by cultivating a professional network on LinkedIn . Look for people in your immediate area and within your industry. Then, connect. Send them a friendly message to talk shop — avoid being promotional. This can be a great way to gain insight into your industry, meet friendly businesspeople, and potentially tap into new audiences through cross-promotional efforts down the road.

There are a number of low-cost marketing ideas for small businesses . Be sure to do some digging and see what tactics and channels fit your business and budget. While you likely won’t gain a massive audience overnight, in time, your marketing efforts will pay off and result in steady traffic to your site and an increase in business.

An ABN is a sign that your business is truly legitimate and that you’re an absolute professional. So, getting your ABN presents a great opportunity to promote your business as exactly that: a business. This is a great time to use your new ABN status and position your business within your niche.

Your 11-digit success

If your business fits the bill and requires an ABN, know that it will largely serve as a benefit to your business. The process for obtaining it is quick, and the perks it brings are priceless.

With your ABN, you can create a site, build your brand, and truly establish your business as the professional entity it is. And if you’re denied an ABN, dust yourself off and give it another go. With or without your eleven-digit code name, you’ll always be you, and your business will always be uniquely yours.


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