How Much Does It Cost to Start a Business in Australia?

Starting a Business in Australia: What Will It Actually Cost You?

The dream of running your own business is one thing. The spreadsheet behind it is another. Before you hand in your resignation or order business cards, it pays to map every cost — because most new business owners underestimate their startup spend by 30–50%.

This guide walks through the real cost categories for launching a small business in Australia, from government registration fees to your first month of operating expenses.

Government and Legal Costs

The good news: the bare minimum is surprisingly cheap in Australia.

• ABN registration: Free via the Australian Business Register. Takes about 20 minutes.
• Business name registration (ASIC): $44 for 1 year, $102 for 3 years.
• Company registration (Pty Ltd): $576 via ASIC if you want a separate legal entity. Sole trader structure costs nothing beyond your ABN.
• GST registration: Free, but mandatory once your projected annual turnover hits $75,000. Use the GST Calculator to model the impact on your pricing.
• Licences and permits: Varies wildly by industry and state. Food businesses, tradespeople, and health practitioners all face different requirements. Budget $200–$1,500 and check your state government's business licence finder.
• Legal fees: A basic partnership agreement or contractor template from a lawyer starts around $500–$1,500. Many sole traders skip this initially — it's a calculated risk.

Setup and Equipment Costs

This is where spend diverges dramatically depending on your business type.

• Home-based service business: $500–$3,000 (laptop, software, printer, dedicated phone line)
• Retail or food business: $20,000–$100,000+ (fit-out, point-of-sale, stock, signage)
• Trade or construction: $5,000–$50,000 (tools, vehicle, safety gear)
• Online business: $1,000–$10,000 (website, ecommerce platform, inventory if product-based)

A useful benchmark: most ASIC research suggests the median small business launch costs somewhere between $3,000 and $15,000 all-in before the first dollar of revenue arrives.

Technology and Software

Monthly subscriptions add up fast. Common line items include:

• Accounting software (Xero, MYOB, QuickBooks): $30–$80/month
• Website hosting: $10–$50/month
• Email and productivity suite: $12–$25/user/month
• Point-of-sale or booking system: $30–$150/month
• Payment processing (Square, Stripe): 1.4–1.7% per transaction

Budget at least $200–$400/month in SaaS costs once you're operational.

Insurance

Insurance is non-negotiable for most businesses. Key types and rough annual costs:

• Public liability (essential): $500–$1,500/year
• Professional indemnity (for advice-based businesses): $600–$2,000/year
• Workers' compensation: Mandatory if you employ staff — cost depends on payroll and industry
• Business interruption and property: $400–$2,000/year depending on assets

Marketing and Branding

You can launch lean, but you need some investment in being findable:

• Logo and brand design: $300–$3,000 (freelancer vs agency)
• Website build: $500 (DIY template) to $8,000+ (custom)
• Google Ads or Facebook Ads launch budget: $500–$2,000 for initial testing
• Printed materials (cards, flyers): $100–$500

Working Capital — The Hidden Killer

Many businesses fail not because the idea was bad but because they ran out of cash waiting for revenue to arrive. You need a buffer for:

• Rent and utilities (if applicable): 3 months prepaid
• Your own living costs while revenue is growing
• Inventory or supplies ahead of your first sales
• Tax obligations (GST, PAYG instalments)

A rule of thumb: set aside 3–6 months of operating costs as working capital before you launch. Use the Budget Planner to calculate what that number looks like for your specific situation.

Viability Check Before You Spend

Before committing capital, run a business viability check. The Business Viability Calculator lets you input your revenue assumptions and cost structure to see whether you have a realistic path to profit — and how long it will take to recoup your startup investment.

Smart founders also keep a copy of a solid small business guide on their desk. The numbers change, but the principles don't.

Total Startup Cost Summary

The variance is enormous because business type drives everything. A freelance graphic designer and a cafe owner live in completely different financial universes. Know your category before you commit.

Common Mistakes New Business Owners Make (And What They Cost)

Most first-time founders trip on the same handful of errors. Here's what to watch for, with real dollar impacts:

Underestimating Time to First Revenue

The typical assumption: "I'll have paying customers within a month." The reality for most service businesses: 3-6 months. For product businesses with manufacturing lead times or regulatory approvals, it can stretch to 12 months. If you budgeted for one month of personal living expenses, you're now scrambling for a part-time job or emergency loan by month two. Cost of this mistake: potentially $10,000-$30,000 in unplanned bridging finance or lost focus.

Mixing Personal and Business Finances

Opening a separate business bank account costs nothing with most banks if you maintain a minimum balance. Yet countless sole traders run everything through their personal account "just to start with." Come tax time, you're spending 15 hours reconstructing records and your accountant bills an extra $500-$1,200 for the mess. Worse: if you're audited, the ATO will not be sympathetic. Set up that business account on day one.

Buying Instead of Renting or Borrowing

A tradie spending $8,000 on a specialist tool they'll use twice a month for the first year is burning capital. Hire it for $120/day when needed, or negotiate a rental-to-own arrangement. Same logic applies to office space (coworking beats a lease for most early-stage businesses), vehicles (novated lease or car subscription vs outright purchase), and even some software (monthly vs annual upfront payment). Preserve cash in year one. You can buy the assets once revenue is proven.

Skipping the Accountant Setup Session

A 90-minute session with a small business accountant in your first month costs $300-$600. They'll configure your accounting software correctly, explain GST, set up PAYG instalments if needed, advise on structure (sole trader vs company for your situation), and flag deductions you didn't know existed. The ROI is typically 5-10x in the first year through tax savings and avoided mistakes. DIY is admirable, but this is one area where expert setup pays immediately.

Overbuilding the Website

A $15,000 custom website with all the bells and whistles before you've made your first sale is a red flag. For most businesses, a $500 Squarespace or WordPress template gets you 90% of the way there. Launch it, test your messaging with real customers, then invest in custom design once you know what converts. The exception: if your website is the product (SaaS, ecommerce with complex functionality), then build properly from the start. But a tradie, consultant, or local retailer rarely needs more than a clean 5-page site with contact details and social proof.

State-by-State Variations That Affect Startup Costs

Business registration is federally consistent, but several state-level costs and requirements vary significantly:

Payroll Tax Thresholds

If you're planning to hire staff immediately, payroll tax becomes relevant faster in some states than others. As of 2025-26:

• NSW: Threshold is $1,200,000 in annual wages (4.85% on wages above that)
• VIC: $700,000 threshold, but with a regional exemption up to $3 million
• QLD: $1,300,000 for most employers, $6.5 million for regional
• WA: $1,000,000 threshold
• SA: $1,500,000 threshold
• TAS: $1,250,000 threshold (but only 4% rate)

For most startups this won't bite in year one, but if you're launching with a team of five or planning aggressive hiring, the state you incorporate in matters.

Workers Compensation Premiums

Mandatory insurance for any business with employees, but premiums vary by state insurer and industry classification. A cafe owner in Victoria paying WorkSafe VIC will see different rates than the same business in NSW using icare. The delta can be 20-40% on the same payroll. For a business with $150,000 in annual wages in a hospitality setting, that's a $1,200-$3,000 difference in year-one costs. Get a quote in your specific state before budgeting.

Commercial Lease Stamp Duty and Costs

If you're signing a retail or office lease, stamp duty and upfront lease costs differ:

• NSW: Retail and office leases under 3 years are usually exempt from duty
• VIC: Duty applies on some commercial leases depending on term and structure
• QLD: Lease duty was abolished in 2013
• WA: Duty applies based on average annual rent and term

Bond and advance rent norms also vary. Most Australian commercial leases require one to three months' rent upfront, plus a bond equivalent to three months. For a small retail space at $2,500/month, that's $10,000-$15,000 due on signing. Some landlords in competitive markets (particularly post-2023 in Brisbane and Perth) have relaxed terms, but budget conservatively.

Food and Trade Licensing Costs

A mobile food van needs council approval. In Melbourne (via City of Melbourne), expect around $500-$1,000 in permit fees annually. In Brisbane (Brisbane City Council), a similar operation might pay $800-$1,400 depending on zone and frequency. A plumber in NSW needs to register with Fair Trading (around $165 for initial licence), but a plumber in Queensland goes through the QBCC with a different fee structure (contractor licence around $495 initially, plus annual renewal). Always check your local state regulator and council — these are not nationally standardised.

Industry-Specific Startup Realities

The table earlier gives broad ranges, but here's what certain industries actually look like on the ground in 2025:

Hospitality (Cafe or Small Restaurant)

All-in to open the doors: $80,000-$150,000 for most metro cafes. That breaks down as roughly $30,000-$50,000 for commercial kitchen equipment (grinder, espresso machine, fridges, oven), $20,000-$40,000 for fit-out (benches, seating, signage, flooring), $10,000-$20,000 for initial stock and smallwares, $5,000-$10,000 for licensing and insurance, and $15,000-$30,000 in working capital to cover wages and costs for the first 6-8 weeks. Rent is typically 3 months upfront. A QSR or licensed venue pushes these numbers much higher.

Online Retail (Ecommerce)

Minimum viable: $3,000-$8,000 if you're dropshipping or holding minimal inventory. That covers Shopify or WooCommerce ($50-$150/month), a logo and basic branding ($300-$800), initial ad spend to test the market ($1,000-$2,000), business registration, and a small stock of samples. Scale that to $20,000-$50,000 if you're importing your own products with a first manufacturing run, freight, warehousing, and photography.

Consulting or Professional Services

Leanest of all: $2,000-$5,000. You need a laptop (if you don't have one already), professional indemnity insurance ($600-$1,500), a website ($500-$2,000), business cards and LinkedIn optimisation ($200), accounting software, and 2-3 months of personal runway. If you're coming out of corporate with savings, this is very achievable. The constraint isn't capital, it's lead generation.

Trade Services (Plumbing, Electrical, Building)

For a solo operator with existing qualifications: $10,000-$25,000. Licensing fees ($165-$700 depending on state and trade), public liability and tools insurance ($1,200-$2,500/year), a ute or van (lease from $400/month or buy second-hand for $8,000-$15,000), tools and safety equipment ($2,000-$8,000 unless you already own them), and basic branding. If you're employing a subbie or apprentice immediately, add another $5,000-$10,000 buffer for wages and workers comp.

When You Should Delay Your Launch (And Save More)

Not every business should start the moment you have the minimum capital. Here are scenarios where waiting 3-6 months to build a bigger buffer is the smarter move:

You're Relying on One Big Client or Contract

If 80% of your projected year-one revenue is from a single client who's given you a verbal yes but no signed contract, do not quit your job yet. Keep working, keep saving, and don't commit to overheads until that contract is signed and the first invoice is paid. Handshake deals evaporate.

Your Industry Has Severe Seasonality

Launching a lawncare business in May (start of Australian winter) means 4-6 months of slow revenue while your costs run in full. Better to launch in September and hit the ground during peak season with cash flow from day one. Same logic for tax agents (don't launch in January), wedding services (avoid launching post-March), and tourism-adjacent businesses (launch before summer, not after).

You Have Dependents and No Emergency Fund

If you're supporting a family and you have less than three months of household expenses saved outside your business capital, the risk is too high. A failed business is recoverable. Defaulting on your mortgage or pulling kids out of school is not. Keep the day job part-time, or delay until you've built that separate safety net.

Interest Rates Are Spiking and You Need Debt

As of mid-2025, small business loan rates are sitting around 7-11% depending on lender and security. If your business model only works with $50,000 in borrowed capital and rates are near a peak, consider whether waiting 6-12 months for a potential rate drop (or saving more to reduce your borrowing need) makes the business viable where it isn't today. Run the numbers with your accountant. Sometimes patience is worth $3,000-$5,000/year in interest saved.