How much it costs to start a business in Australia depends on three choices more than anything else: whether you sell a service or a product, whether you need premises, and whether you hire from day one. A home-based service business can start lean. A café or shop needs many times more. The way to get your number is to list one-off costs, monthly costs and a cash buffer, separately.
The short answer
- Split your budget into one-off set-up costs, monthly running costs and a cash buffer to cover the months before revenue is steady.
- Some registrations are free (an ABN) and some carry government fees that change every year, so check ASIC and your state for current figures.
- For an ordinary business, GST registration generally becomes compulsory at current or projected GST turnover of $75,000. Special rules apply, including not-for-profits and taxi or ride-sourcing activity. Budget employee super at the applicable rate and check the current Payday Super deadlines and exceptions with the ATO.
- Most founders overspend on fit-out, stock and tools before they have proven demand, and underspend on the cash buffer.
I started WP Creative on 22 January 2016 with an $18,000 loan and took no salary for nine months. That is why I separate the launch bill from the cash needed to keep operating. A forecast needs to show when money arrives, not just when a sale is agreed.
How much does it cost to start a business in Australia?
The cost to start a business in Australia ranges from very little for a home-based service business to a large investment for a café, shop or anything with premises, staff and stock. Your number is the sum of one-off set-up costs, monthly running costs for the first few months, and a cash buffer. Work it out from your own model, not from an average.
| Business type | Main one-off costs | Main monthly costs | Relative start-up cost |
|---|---|---|---|
| Professional services (consultant, designer, coach) | Registration, insurance, laptop and software, website, branding | Software, marketing, insurance | Lowest |
| Trades and home services | Licences, tools, vehicle, insurance, website and local listings | Vehicle, fuel, insurance, materials | Low to medium |
| Online store | Website and store set-up, product photography, initial stock, packaging | Stock, fulfilment, platform fees, advertising | Medium |
| Café or retail shop | Lease, bond, fit-out, equipment, licences, point of sale, opening stock | Rent, wages, stock, utilities | Highest |
What one-off costs do you need to budget for?
The one-off costs of starting a business are registrations and licences, legal and accounting set-up, equipment and tools, any premises fit-out, your website and brand, and launch marketing. Registrations are often the smallest line. Fit-out, equipment and stock are usually the largest, which is why they are where founders most often overspend.
Your one-off cost checklist:
- Registrations. An ABN is free. Business name and company registration carry ASIC fees, which are indexed each year. Industry licences and permits vary by state and council. I explain the order of steps in my guide to registering a business name and ABN.
- Structure and advice. Sole trader, partnership or company. An hour with an accountant here can save far more later.
- Insurance. Public liability, professional indemnity and any cover your industry or landlord requires.
- Equipment and tools. Laptop, software, tools, vehicle or kitchen equipment, depending on your model.
- Premises. Bond, fit-out, signage and council approvals if you lease a space.
- Opening stock for product businesses.
- Digital foundations. Domain, business email, website and a Google Business Profile. Here is why a small business needs a website from day one.
- Brand and launch. Logo, messaging, photography and a first marketing test.
For the website line, my guide to website design cost in Australia explains what drives the price.
What monthly costs should you plan for?
The monthly costs of a small business are rent and utilities, wages and super, insurance, software subscriptions, marketing, stock replacement, accounting, tax obligations such as GST and PAYG, and website hosting and maintenance. Plan for several months of these before revenue covers them, because sales usually take longer to arrive than founders expect. Three to six months is a common starting range, not a rule: your own runway calculation below sets the real number.
| Cost | What sets it | Note |
|---|---|---|
| GST | Registration is compulsory once your current or projected GST turnover reaches 75,000 dollars | ATO: registering for GST |
| Super for employees | The super guarantee rate, 12% of qualifying earnings. Under Payday Super, from 1 July 2026, it must reach the fund within 7 business days of each payday | ATO: about Payday Super. Budget super as a payday cost, not a quarterly one |
| Wages | Award rates set by the Fair Work Commission for your industry | Check the award before you hire |
| Rent and utilities | Your premises, or none if you work from home | The biggest variable cost for shops and cafés |
| Software and subscriptions | Accounting, email, CRM, design and productivity tools | Easy to accumulate, review quarterly |
| Marketing | Your channels: search, social, email, ads | Start with small tests |
| Website hosting and care | Hosting plan and maintenance | Keeps the site fast, secure and working |
Where do founders overspend when starting a business?
Founders overspend on things that feel like progress but do not prove demand: premium fit-out, large opening stock, expensive tools, custom software before the process is settled, and paid ads before the offer is clear. Spend first on what gets you a paying customer. Upgrade everything else once revenue shows what is worth upgrading.
Ways to keep start-up costs down without cutting corners:
- Choose a model that needs little upfront. Services before products, online before premises, if your idea allows it.
- Start part-time. Many good businesses were built alongside other work, or with a very lean team.
- Use what you already have. Equipment, skills and contacts from your current work.
- Outsource as needed. Bookkeeping, design and marketing on a per-job basis until the workload justifies a hire.
- Strike a deal. Space or services in exchange for work, or a former employer as your first client.
- Test before you scale. A small first run of stock, a simple offer, a modest ad test.
- Negotiate. Leases, suppliers and software all have more room than the first quote suggests.
- Save before you start. A buffer of your own money buys time to get it right.
The cheapest website is not the right place to save. For most new businesses it is the first thing a customer checks. A simple, fast, credible site beats an expensive one that launches late. My notes on small business website design cover what a first site needs.
How much cash buffer do you need?
You need enough cash buffer to cover your monthly running costs, including your own living costs, until revenue does. Three to six months with little or no profit is a common planning range, but it is a starting point, not a safe number. Longer sales cycles, seasonal trade or slow-paying customers need a bigger buffer, and your accountant can stress-test the figure against your own plan.
Work it out in three steps:
Separate cash received from revenue booked. Put deposits, stock purchases, tax, loan repayments and customer payment terms on their actual dates. Avoid counting the same wages or living costs twice across the business and personal forecast. A profitable plan can still run short of cash when payment arrives after the bills.
- Add up your monthly running costs from the table above.
- Add what you need to live on if the business is your only income.
- Multiply by the number of months until you expect revenue to cover both, then add a margin for delays.
A worked example, with illustrative numbers. Say a home-based consultant’s business costs 2,500 dollars a month to run, and they need 4,500 dollars a month to live on. That’s 7,000 dollars a month. If revenue covers everything from month six, the buffer is 6 × 7,000, or 42,000 dollars, plus a margin. Now run the downside: if the first big client signs three months late, it becomes 9 × 7,000, or 63,000 dollars. The gap between those two numbers is the real risk. Plan for it, or plan what you’ll cut if it happens. (Illustrative figures only, October 2026. Not a quote, and not tax or financial advice.)
Going without a salary for nine months was part of how I managed the start of WP Creative. It is not a plan I would prescribe to everyone. Put personal living costs and business cash needs in the forecast so neither disappears behind an optimistic revenue line.
What to do next
- Write down your business model, whether you need premises, and when you will first hire.
- List one-off costs, then monthly costs, using the checklists above.
- Check current registration fees with ASIC and licence requirements with your state and council.
- Stress-test the cash forecast against slower sales, late payment and unavoidable commitments. Let those scenarios set the buffer and the actions you would take if it runs low.
- Cut anything from the list that does not help you win a first paying customer.
If your website is on that list and you want a straight answer on what you need, book a free call.
Frequently asked questions
What is the cheapest business to start in Australia?
The cheapest businesses to start in Australia are home-based services that need little equipment, such as consulting, design, tutoring, bookkeeping, virtual assistance or cleaning. Your main costs are registration, insurance, a laptop, software and a simple website. Product businesses and anything needing premises cost far more because of stock, fit-out and rent.
Do I need an ABN to start a business?
You need an ABN to run a business in Australia in most cases, and applying for one through the Australian Business Register is free. You will also need a registered business name if you trade under a name other than your own. Use business.gov.au to check registrations for your industry and state.
When do I need to register for GST?
You need to register for GST within 21 days once your current GST turnover (this month plus the previous 11) or your projected GST turnover (this month plus the next 11) reaches 75,000 dollars, or if you provide taxi or ride-sourcing services, regardless of turnover. A new business with a strong first contract can cross the projected threshold on day one. The ATO’s GST registration page has the full rule. You can register earlier voluntarily, which lets you claim GST credits on start-up purchases. Ask your accountant whether early registration suits your business.
Should I set up a sole trader or a company?
A sole trader structure is cheaper and simpler to set up and run, while a company costs more in registration, annual fees and accounting but is a separate legal entity, which generally limits your personal liability for business debts and can suit higher profits. That protection has limits: directors can still be personally liable in some cases, such as insolvent trading or unpaid super and PAYG withholding, and lenders and landlords often ask for a personal guarantee. Many businesses start as sole traders and move to a company later. Get advice from an accountant before deciding.
How much should a new business spend on marketing?
A new business should spend on marketing in small, measurable tests until it finds a channel that brings customers profitably, then scale that channel. Start with low-cost foundations: a fast website, a Google Business Profile, reviews and referrals. Spend on paid ads only once your offer is clear and your site converts.
