Starting and running your small business

Starting a business is a big decision, and needs careful research and planning well before you start trading. To begin with, you need to figure out what type of business you’re going to be operating and then design a structure to suit that business type. You’ll need to think about the premises from which you’re going to run your business, as well as the most appropriate billing, paying and record-keeping systems for it. It’s essential you find out sooner rather than later what your tax and superannuation obligations are going to be and whether or not you need to register your business.

Do your research Some quick and simple research can save you time, money and stress. Find tips on business benchmarks, a checklist for people starting a new business and a guide for contractors. You may want to talk to a financial planner, business advisor or seek advice from one of the many government support services. It is also a good idea to develop a business plan.

Are you operating a business? One of the first steps is to work out if you are operating a business, or if your activity is actually a hobby – this affects what income you need to declare, and the deductions and losses you can claim.

Choosing your business structure When you start a business, it’s very important to choose the business structure that best suits your needs.

Registering your business You may need to register for a range of obligations, such as goods and services tax. You can register for many of these using a single registration form.

Setting up your invoicing, payments and records systems Invoicing customers, paying creditors and keeping records are essential parts of running your business.

Setting up a home-based business Many small businesses are operated as home-based businesses. A home-based business is one where you operate the business either:

  • at home – you carry out most of the work at your home (for example, a dressmaker who does all the work at home and has clients coming to their home for fittings)
  • from home – the business does not own or rent any premises other than your home (for example, a tiler who does most of their work on clients’ premises. but does not have any other business premises).

State Government Sites

Gov: Small Business Tool Kit

SA: Small Business

QLD: Business Planning Kit

VIC: Starting a business

TAS: Business

NT: Business Tools

WA: Business starter info

Running your business

Running a business inevitably involves some paperwork and you must make sure you comply with your tax obligations. By understanding the very basics, you can make this relatively pain free. Managing invoices, payments and paperwork When you operate a business, you have transactions where money flows into your business (receipts) and out of your business (payments). These transactions are supported by documents recording the details of the transactions, such as tax invoices, wages records, cheque butts and credit card statements. These documents contain the information you need to record, such as the date of each transaction, total payment or amount received or the amount of GST. Managing your cash flow Cash flow is what keeps your business going. A good way to help make sure you have enough cash available at the right time to meet your tax, super and other obligations is to do a cash flow budget. We also have some tips to help you manage your cash flow better. Goods and services tax (GST) You must register for GST if you are carrying on a business or enterprise and any of the following apply:

  • Your current or projected annual GST turnover is $75,000 or more ($150,000 or more for non-profit organisations).
  • You provide taxi travel.
  • You want to claim fuel tax credits.
  • You want to claim wine producer rebates.

If your annual GST turnover is below $75,000, you can choose not to register for GST. Lodging activity statements Businesses use an activity statement to report and pay a number of tax obligations, including GST, pay as you go (PAYG) instalments, PAYG withholding and fringe benefits tax. Activity statements are also used by individuals who need to pay quarterly PAYG instalments. Making payments to the ATO There are lots of easy options for making payments to us. If you are having trouble paying, it is very important that you talk to us and let us know what is happening.