Starting a business checklist for Australia: key steps

Published Friday 20 March 2026

Table of contents

• Assess if you're ready to start a business
• Define your unique selling point
• Create a comprehensive business plan
• Choose the right business structure
• Set up a dedicated business bank account
• Arrange appropriate business insurance
• Set up your accounting and bookkeeping system
• Confirm your business will be profitable
• Secure your web domain and consider trademarks
• Plan for employees if you need them
• Build your support network
• Taking the first step with confidence
• FAQs on starting a business checklist

Key takeaways

• Validate your business idea by talking to potential customers, researching competitors, and testing a minimum version of your product or service with real customers before investing significant time and money.
• Choose the right business structure early (sole trader, partnership, company, or trust) as it determines your tax obligations, personal liability, and paperwork requirements, which can save time and money later.
• Set up a dedicated business bank account and cloud-based accounting software from day one to keep personal and business finances separate, making bookkeeping simpler and tax time easier.
• Complete essential legal registrations including your Australian Business Number (ABN), appropriate business licenses and permits for your industry, and tax registrations like GST if your turnover exceeds $75,000 annually.

Assess if you're ready to start a business

Business readiness means having the financial stability, time, and skills to launch successfully. Before committing, honestly evaluate whether now is the right time.

Consider these questions:

• do you have enough savings to cover personal expenses while the business gets established?
• can you commit the time needed without burning out?
• do you have the core skills required, or know where to get help?
• is your support network prepared for the demands of business ownership?
• are you comfortable with the financial risk involved?

If you need more time, that's okay. Use it to build savings, develop skills, or test your idea on a smaller scale.

Test and validate your business idea

Validating your business idea means confirming that people will actually pay for what you're offering before you invest significant time and money. Businesses that complete this step are more likely to succeed.

Follow these steps to validate your idea:

1. Talk to potential customers about their problems and whether your solution fits.
2. Research competitors to understand what already exists and where gaps remain.
3. Test a minimum version of your product or service with real customers.
4. Check if people will pay your intended price point.
5. Look for evidence of demand through search trends and market research.

If validating your idea reveals problems, adjust it before moving forward. Pivoting now saves you money compared to changing direction after setup.

Find a business mentor or advisor

A business mentor provides honest feedback and guidance based on experience you don't yet have. Having someone to challenge your assumptions can help you make better decisions.

You can find mentors in several places:

• small business associations and development centres
• industry networking events and professional groups
• accountants and bookkeepers who work with businesses like yours
• online mentoring platforms and business communities

Define your unique selling point

A unique selling point (USP) is what makes your business different from competitors. Defining yours early helps you focus your marketing and communicate your value clearly.

When defining your USP, make sure it meets these criteria:

• summarise your key difference in one or two sentences
• be memorable enough to use in every pitch
• answer why customers should choose you over alternatives

Create a comprehensive business plan

A business plan is a document that outlines your business strategy, goals, and how you'll achieve them. It helps you think through your idea and shows investors and lenders you're serious.

Include these key elements in your business plan:

• your products or services and target market
• how you'll make money and your financial projections
• your marketing and operations strategy
• what makes you different from competitors

Learn more in our guide to creating a business plan.

Choose the right business structure

Your business structure determines how you pay tax, your personal liability, and how much paperwork you'll need to manage. Choosing the right one from the start saves time and money later.

The main business structures in Australia are:

• Sole trader: Simplest to set up, but you're personally liable for business debts
• Partnership: Share ownership with others, but partners share liability too
• Company: Separate legal entity with limited liability, but more complex and costly to run
• Trust: Can offer tax and asset protection benefits, but requires professional setup

Talk to an accountant before deciding. The right structure depends on your situation, industry, and growth plans.

Understand your legal obligations and registrations

Beyond choosing a structure, you'll need to meet various legal requirements before operating. These vary by industry and location, so check what applies to your business.

Here are the common registrations and obligations you may need:

• Australian Business Number (ABN): Required for most businesses
• Business name registration: Needed if trading under a name different from your own
• Licences and permits: Some industries require specific licences to operate legally
• Industry regulations: Check requirements for your sector, such as food safety or building codes
• Local council permits: May be needed for signage, home-based businesses, or specific activities

The Australian Business Licence and Information Service helps you identify which licences and permits apply to your business based on your industry and location.

Register for taxes and understand your obligations

Registering for tax ensures you meet your legal obligations from day one. The registrations you need depend on your business structure and expected turnover.

These are the key tax registrations in Australia:

• Australian Business Number (ABN): Required for most businesses and free to register
• Goods and Services Tax (GST): Required if your turnover is $75,000 or more per year
• Pay As You Go (PAYG) withholding: Required if you have employees
• Taxable payments annual report: Required in some industries like building and construction

Register through the Australian Business Register or ask your accountant to handle registrations when setting up your business structure.

Set up a dedicated business bank account

A dedicated business bank account keeps your personal and business finances separate. This makes bookkeeping simpler, tax time easier, and protects your personal assets.

A separate business account offers several benefits:

• clearer records for tax deductions and BAS reporting
• easier to track business cash flow
• more professional when receiving customer payments
• required if you're operating as a company

When choosing an account, compare transaction fees, integration with accounting software, and whether you need a linked business credit card.

Arrange appropriate business insurance

Business insurance protects you from financial losses if something goes wrong. Even small businesses need cover, and some types may be legally required depending on your industry.

Here are the common types of business insurance to consider:

• Public liability: Covers claims if someone is injured or their property is damaged because of your business
• Professional indemnity: Protects you if a client claims your advice or service caused them a loss
• Business contents: Covers your equipment, stock, and tools
• Workers compensation: Required if you have employees

Talk to an insurance broker to find the right cover for your business type and risk level.

Set up your accounting and bookkeeping system

Setting up your accounting and bookkeeping system from day one keeps your finances organised and makes tax time straightforward. Good accounting software is one of the most important tools for any new business.

Cloud-based accounting software like Xero can streamline your financial management. It helps you:

• track income and expenses automatically
• send invoices and get paid faster
• reconcile bank transactions with minimal effort
• stay on top of GST and tax obligations
• access your finances from anywhere

Choose software that connects to your bank and grows with your business. Getting your accounting right from the start saves hours of cleanup later.

Confirm your business will be profitable

Testing whether your business can be profitable before you launch helps you avoid investing in an idea that won't work financially. Run the numbers early so you can adjust your pricing, costs, or business model.

Follow these steps to assess profitability:

1. Estimate your startup costs and ongoing expenses.
2. Forecast your expected revenue based on realistic sales projections.
3. Calculate your break-even point.
4. Build in a buffer for unexpected costs.

Use accounting software to run profit and loss forecasts. An accountant can review your projections and spot gaps you might have missed.

Need help budgeting? See our guide to startup business costs.

Secure your web domain and consider trademarks

You'll need a website, so check for suitable domain names and register them early. Think about trademarks too, especially if you're building a brand. Talk to your lawyer about protecting your intellectual property.

Build your business website

Your business website establishes your online presence and gives customers a way to find and contact you. A simple site is enough to start.

Website builders like Squarespace, WordPress, and Wix make it easy to create a professional site, even for beginners. Make sure your basic business website includes these elements:

• what you offer and who it's for
• how customers can contact you or make a purchase
• your business location or service area
• basic information about your business and credentials

You can always improve your site as your business grows. Focus on getting online first.

Establish your social media presence

Your social media presence helps customers find you and builds trust before they buy. Focus on where your customers spend time rather than trying to be everywhere.

Consider these factors when choosing the right platforms:

• Instagram and Facebook: Good for visual businesses and consumer products
• LinkedIn: Better for B2B services and professional networking
• TikTok: Useful for reaching younger audiences with engaging content

Start with one or two platforms and post consistently. Research what your competitors use and where your target customers are most active. You can expand to other platforms as your business grows.

Plan for employees if you need them

If you're planning to hire employees, you'll need to understand your obligations as an employer before you start recruiting. For example, the Australian Taxation Office (ATO) notes that providing perks to employees may attract fringe benefits tax (FBT) on top of other standard requirements. Many businesses begin as solo operations and hire as they grow, which is perfectly fine.

As an employer in Australia, you'll need to meet these obligations:

• registering for Pay As You Go (PAYG) withholding to deduct tax from wages
• paying superannuation (currently 11.5% of ordinary earnings)
• meeting Fair Work requirements for pay rates and conditions
• taking out workers compensation insurance

If you plan to hire later, focus on building your business first. When you're ready, see our guide to hiring employees.

Build your support network

A strong support network gives you access to expertise and guidance when you need it. Having trusted people to call on makes a real difference when running a business.

These are the key people to have in your network:

• Accountant or bookkeeper: For tax advice, compliance, and financial guidance
• Lawyer: For contracts, intellectual property, and legal questions
• Business mentor: For honest feedback and strategic advice
• Industry peers: For sharing experiences and learning from others
• Financial advisor: For personal financial planning alongside business growth

Start with the essentials and build from there. Start with an accountant and mentor, then build your network as your business grows and your needs become clearer.

Taking the first step with confidence

Starting a business is a significant step, but following this checklist helps you cover the critical legal and financial requirements. Complete the steps at your own pace. Focus on validating your idea, choosing your structure, and getting your financial foundations in place first.

With the right preparation and tools to simplify your financial management, you can spend less time on admin and more time growing your business. Get one month free and see how Xero can help you start with confidence.

FAQs on starting a business checklist

Here are answers to some common questions about starting a business.

How long does it take to start a business in Australia?

Basic registrations like an ABN can be completed in minutes, while full business setup typically takes 1–3 months. The timeline depends on your business structure, with sole trader registration being fastest and company registration requiring more steps.

Can I start a business while working full-time?

Yes, many people start their business as a side venture while still employed. This reduces financial pressure and lets you test your idea before committing fully. Check your employment contract for any restrictions on outside business activities, and be realistic about the time you can commit.

How much money do I need to start a business?

Service-based businesses can start with $1,000–2,000 for registration, insurance, and basic setup. Product-based businesses typically need more for inventory. Budget for both one-off setup costs and 3–6 months of operating expenses.

Do I need an accountant when starting a business?

While optional, an accountant is highly recommended for new businesses. Professional bodies like Chartered Accountants Australia and New Zealand represent a vast network of experts, with more than 140,000 members globally. They can help you choose the right structure, set up your accounting correctly, and ensure your tax compliance. Many offer startup packages at reduced rates.

What's the most important thing to do before starting a business?

Validate your business idea. Before spending money on registration and setup, make sure there's genuine demand for what you're offering. Talk to potential customers, research your market, and test your concept on a small scale. Completing this crucial step significantly increases your chances of success.

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.