How to Start a Sole Trader Business from Scratch in Australia

Starting a sole trader business in Australia is a straightforward process, but there are several important steps you need to follow to ensure your business is set up correctly. Here’s a detailed guide to help you get started:

1. Get a Tax File Number (TFN)

• Description: A TFN is a unique identifier issued by the Australian Taxation Office (ATO). It’s essential for lodging tax returns and dealing with the ATO.

• How to Obtain: Apply for a TFN online through the ATO website if you don't already have one.
  

2. Apply for an Australian Business Number (ABN)

• Description: An ABN is an 11-digit number that identifies your business to the government and community. It’s required for tax and business purposes.

• How to Obtain: Apply for an ABN online via the Australian Business Register (ABR) website. The process is free and takes about 15 minutes.
  

3. Register a Business Name

• Description: Registering a business name allows you to operate your business under a name other than your own personal name.

• How to Obtain: Register your business name through the Australian Securities and Investments Commission (ASIC) Connect portal. Check availability and pay the registration fee.
  

4. Open a Business Bank Account

• Description: Separating your personal and business finances is crucial for accounting and tax purposes.

• How to Obtain: Visit a bank with your ABN, business name registration, and personal identification to open a business bank account.
  

5. Get Business Insurance

• Description: Insurance protects your business from various risks, including public liability, professional indemnity, and product liability.

• How to Obtain: Consult with an insurance broker to determine the necessary types of coverage for your business. Shop around for the best rates and coverage options.
  

6. Register for Goods and Services Tax (GST)

• Description: If your business expects to have an annual turnover of $75,000 or more, you must register for GST.

• How to Obtain: Register for GST through the ATO website when applying for your ABN or separately if needed.
  

7. Understand Your Legal Obligations

• Description: Familiarize yourself with the legal requirements for running a business in Australia, including tax obligations, record-keeping, and licences.

• How to Do: Visit the ATO and business.gov.au websites for comprehensive information on your obligations as a sole trader.
  

8. Set Up Record-Keeping and Accounting Systems

• Description: Proper record-keeping is essential for managing your finances and meeting your tax obligations.

• How to Do: Use accounting software like Xero, QuickBooks, or MYOB to track income, expenses, and taxes. Maintain digital and physical copies of all receipts and invoices. Zoho is free and can be used easily via their app.
  

9. Develop a Business Plan

• Description: A business plan outlines your business goals, strategies, and financial projections.

• How to Do: Write a detailed plan including your business objectives, target market, competitive analysis, marketing plan, and financial forecast. Use templates available on business.gov.au.
  

10. Create a Website and Register a Domain

• Description: A professional website helps establish your online presence and credibility.

• How to Do: Use Wix to create a website tailored to your business needs. Register your domain and set up a professional email address through WebRegistry or another provider to ensure a cohesive and professional online presence.
  

11. Market Your Business

• Description: Effective marketing helps you reach your target audience and grow your business.

• How to Do: Create a marketing strategy that includes online and offline tactics such as email marketing, and local advertising. Set up a professional website and consider registering on Google My Business.
  

While this may not be the most exciting part of starting a business, following these steps will help you lay a strong foundation for your business.

Lizzie Buscaino - Intuitive and Strategic Business Coach