Starting a business: a practical checklist

A business can be registered quickly, but that does not prove the idea will earn enough to cover its costs. Work through these steps in order, and ask a qualified professional about the parts that depend on your circumstances.

1. Test the customer and the offer

• Describe the customer and the problem you solve in one or two sentences.
• Speak to potential customers. Ask what they use now, what frustrates them and what they would pay for a better option.
• Test a small offer or paid trial before committing to large stock, premises or equipment.
• Record what would make you change the idea. A useful test can tell you to stop as well as to proceed.

The business plan template turns those observations into a working plan.

2. Choose a structure and name

Your structure affects who owns the business, legal responsibility, tax and records. Read sole trader vs company and discuss your situation with an accountant or lawyer. Check whether the name you want can be registered and whether it conflicts with someone else’s brand.

3. Check registrations and obligations

Work out whether you need an ABN, a business name, a company registration or a director ID. They do not apply in the same way to every structure. Our guides explain getting an ABN and applying for a director ID. Check GST registration and any other tax registrations with the official services or your tax agent. Licences and permits depend on your activity and location, so use the official business.gov.au guide for the current requirements.

4. Plan cash before the first sale

• List one-off costs: setup, equipment, deposits, fit-out, launch stock and professional fees.
• List ongoing costs: wages, rent, utilities, insurance, software and supplier payments.
• Estimate when customers will actually pay. Sales and cash receipts are not the same date.
• Test a slower start and an unexpected expense.

Use the start-up cost calculator for a first estimate, then make a cash-flow forecast with payment dates.

5. Set up the operating basics

Choose a business banking arrangement, a record-keeping system and a way to invoice and reconcile payments. Check the insurance you may need for your industry and premises. If you will employ people, confirm employment, payroll and super obligations before the first hire with current official guidance and an appropriate adviser.

6. Review the first results

After the first month, compare expected sales, direct costs and cash receipts with what happened. Which assumption was wrong? Update price, delivery, marketing or the cash plan while changes are still manageable.

Important things to know

• Registrations, tax and licence requirements vary with your structure, location and activity. Confirm them with official services and qualified advisers.
• A business plan and forecast are working documents, not promises of sales or funding.
• Keep personal and business records organised from the start, even while the operation is small.