9 Things to Consider When Starting a Business
Starting a business in Australia is filled with reward and risk, opportunity and responsibility.
Whether you're motivated by flexibility, financial independence or a passion to build something of your own, turning an idea into a sustainable business requires thorough planning and compliance with regulatory requirements.
This guide will walk you through the 9 key things to consider before you launch your business. Backed by empirical data and practical insights, it’s your roadmap to laying a solid foundation for your venture.
The 9 Essentials of Starting a Business in Australia
Before launching a business, you must understand your readiness, define your structure and name, develop a clear plan, register properly, set up finances, market to customers, understand employment responsibilities and take legal precautions to protect your venture. Each step is essential to long-term success.
1. Before You Start: Check If You're Ready
Starting a business is more than just having a good idea, it’s a long term commitment to yourself, as well as your customers, suppliers and your employees.
Before registering anything, evaluate whether you’re ready for the realities of running a business. You’ll need the right mix of skills, time and support. Many entrepreneurs underestimate how business ownership affects their personal life. From long hours to financial risk, the impact is real and ongoing.
Decide early if your activity is a hobby or a business. If you earn income and intend to make a profit, you're likely running a business. Once you decide on the right structure, you will need to register with the appropriate authorities.
Young people are leading the way in new business creation, nearly two-thirds of new small businesses are founded by Millennials and Gen Z (Small Business Commissioner The Basics of Starting a Business).
2. Define Your Business Structure and Name
Choosing the right business structure is one of the most critical legal decisions you’ll make. It affects how you pay tax, your personal liability and your capacity to raise capital.
Here are the four main structures:
Sole Trader
➕ Simple, low-cost, full control
➖ Personally liable, harder to raise funds
Partnership
➕ Shared responsibility, more resources
➖ Liability is shared, potential disputes
Company
➕ Limited liability, better for growth
➖ Higher cost and regulatory complexity
Trust
➕ Asset protection, estate planning
➖ Complex, requires professional advice
97.2% of Australian businesses are small businesses with fewer than 20 employees; of these, 62.5% are self-employed (ASBFEO Number of Small Businesses in Australia 2024).
Once you've chosen your structure, choose a unique business name. Review the Australian Business Register and check domain name availability to confirm if your preferred name is available. If you want to protect your brand, apply for a trademark.
3. Plan Your Business
Without a business plan, you’re flying blind. Planning helps you define your product, identify your target market, research competitors and forecast finances.
Your business plan should include:
Market analysis: What is the demand for your product or service?
Competitor research: Who are you up against?
Financial plan: Start-up costs, cash flow and profit forecasts.
Risk management: Identify business risks and create strategies to mitigate them.
Developing a robust plan not only clarifies your goals but also increases your chance of securing funding and long-term success.
4. Register Your Business and Meet The Requirements
Registering your business is straightforward but essential. Here's what the registration process involves:
Australian Business Number: Required for tax and other dealings.
Business Name: Must be registered unless trading under your own name.
Company Registration: If applicable, register with ASIC and obtain a Director ID.
Tax File Number (TFN): Sole traders use their personal TFN; companies need a separate one.
GST Registration: Required if your turnover is expected to exceed $75,000.
Licences and Permits: These vary by industry and location, use the Australian Business Licence and Information Service to check requirements.
Domain Name: Essential for your digital presence. Check availability and register early.
Registration fees are minimal, $44 for one year or $102 for three years for a business name (Small Business Commissioner: The Basics of Starting a Business).
Two foundational documents you should understand from the outset are a company constitution and a shareholders’ agreement. These documents play different roles but together they form the legal and operational backbone of your business. At Empirical, we can draft both kinds of documents for you for a fixed-fee.
Company Constitution
A company constitution is a legally binding internal document that governs how a company operates. It regulates the powers and responsibilities of directors and shareholders, outlines procedures for meetings, share transfers, dividend distribution and defines rules for appointing or removing directors.
Importantly, a constitution acts as a contract between the company and its members, the company and its directors and between members themselves. This makes it a central document in managing the company’s internal relationships and governance expectations.
Under the Corporations Act 2001 (Cth) (Corporations Act), companies can choose to:
Adopt the replaceable rules in Part 2B.4 of the Corporations Act;
Create a custom constitution; or
Use a combination of both.
While replaceable rules offer a default set of governance procedures, a tailored constitution provides significantly more flexibility and control. For example, it allows a company to:
Create different classes of shares with tailored voting or dividend rights;
Define specific rules on how directors are appointed or removed;
Enable modern practices like virtual meetings or written board resolutions; and
Provide object clauses limiting or guiding the scope of business activity.
A constitution can be adopted at registration or later by special resolution, which requires at least 75% shareholder approval and, in some cases, lodgment with ASIC. Public companies must lodge their constitutions with ASIC upon registration, while proprietary companies must retain and produce a copy if requested.
For small businesses, especially closely held proprietary companies, a constitution can help ensure clarity and prevent internal disputes.
Shareholders’ Agreement
While a company’s constitution governs the operation of the company, a shareholders’ agreement is a private contract between shareholders. It defines how they will act in relation to their ownership of the company and how they will respond to various business events.
Unlike constitutions which can be changed by a 75% majority vote, a shareholders’ agreement typically requires unanimous consent to amend, offering greater protection to minority shareholders. This is particularly important in preventing the majority from altering shareholding rights in ways that could be oppressive or damaging to minority interests.
A well-drafted shareholders’ agreement addresses:
Board composition and director appointment procedures;
Decision-making protocols, including what decisions require:
Unanimous approval (for example, issuing shares, selling the business),
Special majority (for example, taking on debt over a certain threshold),
Simple majority (for example, declaring dividends);
Funding commitments, particularly in start-ups where shareholders contribute early capital;
Profit distribution policies;
Share issue and transfer restrictions, ensuring control over who joins the ownership structure;
Valuation methodologies in cases of share sale or exit; and
Dispute resolution mechanisms, reducing the risk of costly litigation.
A shareholders’ agreement complements, not replaces, a company constitution. It’s not lodged with regulators but is a confidential contract between all company shareholders and can be more easily tailored to suit the private agreements between founders or investors. However, where the constitution and shareholders’ agreement address similar issues, it’s common practice to state that the shareholders’ agreement will prevail in case of conflict.
For any business, especially one with multiple shareholders, having both a constitution and a shareholders’ agreement is best practice.
The constitution ensures the company complies with the Corporations Act and ASIC requirements. It defines how the company operates and is used in interactions with regulators and third parties.
The shareholders’ agreement is used to safeguard shareholder interests, manage risk and provide clarity on issues not well covered in a standard constitution.
Together, these documents help prevent internal conflict, protect business continuity and ensure governance expectations are clear.
5. Organise Your Finances
Financial setup is often underestimated. Accurate budgeting, funding and compliance can make or break your business in the first year.
Start with a start-up cost plan that includes:
Business registration fees;
Equipment and supplies;
Premises and utilities;
Initial inventory;
Insurance (for example, public liability, professional indemnity); and
Professional advice.
Setting up a business bank account, choosing an accounting method and implementing bookkeeping systems are essential. Forecasting cash flow helps avoid liquidity problems.
The vast majority (92%) of small businesses have a turnover of less than $2 million (ASBFEO Number of Small Businesses in Australia 2024). It’s best practice for small businesses to keep a close eye on their finances through cash flow forecasting and expense analysis.
6. Get Customers and Market Your Business
Start by identifying your target market, segmenting customer types and crafting a marketing plan. Include:
Online presence: Create a secure, mobile-friendly website.
Social media: Select platforms based on where your audience spends time.
Advertising: Consider both digital and traditional advertising based on your product.
Compliance: Adhere to advertising and privacy laws.
A strong digital footprint helps build credibility. Launch with a basic website and expand as your business grows.
7. Hire Staff or Contractors
Even if you're starting solo, you may need help eventually. Understand the difference between hiring employees, contractors and apprentices.
For employees:
Know obligations for superannuation, leave and fair pay;
Draft employment contracts; and
Keep records for compliance.
For contractors:
Ensure correct classification to avoid sham contracting; and
Use clear, written agreements.
Most early stage businesses have lean staffing structures. Only 8.7% of small businesses employ 5-19 people, while 26% employ 1-4 (ASBFEO Number of Small Businesses in Australia 2024).
8. Protect Your Business
Legal protection often takes a back seat but it's critical.
Make sure you:
Understand your obligations under the Australian Consumer Law;
Protect intellectual property through trademarks and copyright;
Get appropriate insurance (public liability, cyber, professional indemnity);
Implement workplace safety standards; and
Create internal policies for data handling, customer service and complaints.
Failing to protect your business early on can expose you to costly disputes or penalties later.
9. Get Professional Help
Starting a business requires long-term financial, legal and strategic planning. Getting expert advice can help avoid costly mistakes.
You might need to consult:
Accountants for tax and budgeting;
Lawyers for contracts, structure and intellectual property; or
Business advisors for market positioning and growth strategies.
Professional advice is especially important if you’re considering a complex structure like a trust or planning for high growth or succession.
Key Takeaways
Starting a business in Australia is achievable but success depends on more than just a great idea. From choosing the right structure to managing finances, planning for growth and complying with the law, every step matters.
Small businesses make up 97.2% of all Australian businesses and over 62% are self-employed (ASBFEO Number of Small Businesses in Australia 2024), proving there’s plenty of opportunity. Those who plan well and operate legally and efficiently will thrive.
Empirical Legal is a corporate advisory and technology law firm for startups, scaleups and SMEs.
We combine legal, technology, and business experience and expertise to deliver practical, actionable advice and solutions.
We have guided plenty of entrepreneurs through the process of getting their business off the ground. Whether it be reviewing key commercial documents for your business or considering the path forward, the Empirical team can help.
Reach out to Empirical Legal today.