Key elements of starting a business

Once you have explored and researched your business idea, it is crucial to consider the practical elements of starting a business, which include legal and regulatory requirements, resources, business location and start-up costs.

You will need to consider these elements, your circumstances and business goals to help you make an informed decision about your commitment and ability to start a business.

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Legal and regulatory requirements

You must consider and comply with various legal and regulatory requirements when starting a business.

You will need to research these requirements to understand which are relevant to your business before starting. This will help to ensure that you are well prepared to comply once your business is operational.

There are several business registrations that your business may need to apply for, including Australian business number (ABN), Australian company number (ACN), business name and tax registrations.

For more information, see:

Different types of business structures have specific legal and regulatory requirements that you must know and comply with. Choose the one suitable for your long-term business plans.

There may be specific licences, permits, and restrictions on your business operations, depending on its type, location and size.

You may need a commercial registration or permit if your business will need dedicated business vehicles.

Businesses operating in Queensland have a legal duty to meet the general environmental protection obligations to prevent harm, nuisances and contamination.

Consider the environmental impact your business may have before you start operating. This will help you identify strategies to minimise and remove these impacts before they cause harm.

Read more about:

You must understand and implement relevant work health and safety requirements for your business. There may be specific codes of practice for your industry.

Safety requirements and codes of practice help keep you and your staff safe at work.

Learn more about:

Financial records must be:

  • secure
  • private
  • backed up
  • easily reported on if needed.

There may also be requirements relating to your specific business or industry.

You can use the ATO's record keeping evaluation tool to help you work out what records your business will need to keep.

Read more about financial record keeping.

You must understand your obligations and the rights of your customers when operating a business that sells products and services.

The Office of Fair Trading can help you understand your obligations under Australian consumer law.

Learn more about legal and ethical selling.

Resourcing

Having the right resources will help to ensure that your business idea is feasible in practice.

There are some key resourcing considerations—primarily people, finance and materials.

Before starting your business, you must consider whether you and your team have the right capabilities and skills to operate the business. Without the right people, your business can struggle to succeed.

Most businesses rely on suppliers to provide them with goods and services.

Finding suitable suppliers and negotiating a reasonable price is key to early business success.

Brand resources include websites, social media, signs, logos and uniforms. Consider what brand resources you will need to start your business and which can be purchased at a later date. This can help with cash flow in the initial stages of business operations.

Read more about branding for businesses.

Choosing a business premises and location

Choosing a business premises and location will be one of the key decisions you make when starting your business.

There are various options to consider including:

The type and size of your business and the finances you have available will affect your decision.

Learn more about finding the right business location.

Financial considerations

You should consider the financial elements of your business operation when starting out. These include start-up costs, pricing for your products and services, income and profit.

It is best practice to complete a financial forecast (including costs, revenue and profit) during the start-up phase of your business.

Read about preparing a business plan.

Underestimating your start-up costs can lead to early problems or business failure. Make sure you know about common start-up costs.

Financial benchmarking measures the actual or projected performance of your business against other similar businesses. You can use financial benchmarking to estimate the start-up costs of your business.

Pricing your products and services competitively can be a balancing act. If you price your products and services too high early on, your business may not make any profit. If you price too low, you could risk not covering your costs.

As a business owner you will need to:

  • calculate key profit figures
  • understand what your break-even point is
  • develop a cash-flow statement and use it to estimate how long your business can survive without making a profit.

Read more about break-even and profit.

There will be different ways to fund your business. In the start-up phase, it is important to consider the following:

  • the types of finances available to you
  • whether the finances will be sufficient
  • your eligibility funding.

You should separate your personal and business finances. There are various types of business bank accounts that you could use depending on your needs and circumstances.

Your business might need different kinds of insurance, including workers' compensation, accident and liability, and property insurance. Insurance is a core part of your risk management processes as a small business.

If you don't feel confident in dealing with financial matters, engage the help of an accountant, bookkeeper or financial adviser.

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