The startup costs for a business in Australia: what to consider
Your startup costs are what you need to spend to get your Business up and running.They vary depending on the type of business you have, but there are some basic things all businesses need to consider.
Our checklist will take you through the main expenses you may need to factor in before your Business can start generating income.
Why understanding startup costs matters
You need to know how much it costs to set up your Business so you can plan, seek finance if you need it and set yourself up for success. It’ll also help you figure out how to price your product or service to be able to calculate your profit margins.
What are the costs associated with starting a business?
There are a number of initial costs to keep in mind when starting a business, but remember all businesses are different. Research your particular area to check there’s nothing extra you need to tick all the required boxes.
Keep in mind that it’s not just about startup costs. Factor in ongoing costs and whether you can make your Business profitable. Make sure you have a robust business plan to cover every eventuality.
Registration and business structure fees
Whether you’re registering as a sole trader or setting up a company, you’ll have fees for your Business name, your Australian Securities and Investments Commission (ASIC) registration and Australian Business Number.
The Government’s Business Registration Service will help you get started. You’ll also need to pay for a domain name for your website.
Licensing and permits
Depending on your industry, you may need specific licences for things like food handling and selling alcohol. You might also need council permits. These can often involve certificates or compliance costs.
Equipment and technology
Think computers, software, printers, vehicles and so on. Many websites offer startup cost calculators which can help you work out how much these one-off or ongoing items will cost.
Office space and utilities
If you’re setting up an office, factor in rent, furniture, deposit and connection fees for electricity, water, internet, and phone services.
Marketing and advertising
Marketing is key to getting noticed, so think about the costs of website development, branding and promotional campaigns and budget accordingly.
Insurance and legal Fees
Legal paperwork, advice, setting up contracts and insurance can all add up.
Inventory and supplies
If you're selling a product, initial stock and supplies are essential costs. Even service-based businesses may need materials or physical resources to get started.
Staffing and wages
Hiring employees or contractors incurs not just wages, but additional costs like training, benefits, and superannuation. These often count as ongoing costs.
Ongoing operational costs
These include rent, utilities, insurance, loan repayments, software subscriptions, marketing and, yes, wages again.
Startup costs checklist
Let’s look at some budgeting tips below, plus a few common missteps to avoid.
Planning and budgeting effectively
1
Use templates and calculators
2
Include 6-12 months of running costs
· It’s smart to budget enough to cover that tricky initial period when you might not be making any income.
3
Don’t forget your contingency
Always build in a buffer of around 10-20% for unexpected costs.
Common mistakes to avoid
- Underestimating ongoing expenses. Remember it’s not just about your company startup costs, make sure you budget for ongoing expenses.
- Not checking with a professional. A second pair of eyes, like an accountant, can help spot anything you might have missed.
1
Underestimating ongoing expenses
Remember it’s not just about your company startup costs, make sure you budget for ongoing expenses.
2
Not checking with a professional
A second pair of eyes, like an accountant, can help spot anything you might have missed.
How Amex can help new businesses get started
American Express Business Cards include benefits like cashflow management solutions, integration with business accounting software, rewards on eligible business spend and travel perks.
Flexible funding and managing cash flow
When thinking about ongoing expenses, managing cashflow is key. Whether it’s a month where you need to budget for a larger business purchase or one with fewer expenses, our Business Charge Cards offer flexible spending power1, also known as no pre-set spending limit. This means that the amount you can spend is dynamic and can adapt based on your transaction patterns, your Business’ credit rating, and other factors. The way you use your Card can help your spending power grow, particularly in the first few months. To help maximise your spending power, make regular transactions and don’t miss any payments.
Depending on the Card you choose, you can also extend your cashflow days and get up to 51 days or up to 55 days to pay for your purchases2.
Rewards for business spending
With an American Express Business Card, you can earn rewards points on your eligible Business expenses, including travel, utilities, insurance, inventory and more.
- With the American Express® Platinum Business Card and the American Express® Business Gold Plus Card, you can earn Membership Rewards® Points3 to use for travel with Amex Travel Online4 or to transfer to major airline and hotel partner programs5. You can also use your points to pay for online purchases with Pay with Points6 or to pay off eligible transactions using Cover Charges with Points7.
- With the American Express® Qantas Business Rewards Card, you can earn Qantas Points on your Business spend8 to use for eligible flights, accommodation or car hire.
- And with the American Express® Velocity Business Card, you can earn Velocity Points on your spend9 to redeem for eligible upgrades, hotels or car hire.
Employee Cards and expense tracking
Take out Employee Cards10 to help you manage your team’s expenses and keep control of your cashflow. You will also earn rewards points on eligible spend made on Employee Cards. Depending on the Business Card you choose, an Employee Card annual fee may apply.
Business support resources
Don’t forget to check our Business Insights to get inspiration and tips that may help you run and grow your Business.
Choose the Business Card that best suits you
Rewards
Premium
Qantas Frequent Flyer
Velocity Frequent Flyer
1. Flexible Spending Power: Unless we tell you otherwise, your American Express Charge Card comes with flexible spending power, also known as no pre-set spending limit. This means that the amount you can spend is dynamic and can adapt based on your transaction patterns, your Business’ credit rating, and other factors. The way you use your Card can help your spending power grow, particularly in the first few months. To help maximise your spending power, make regular transactions and don’t miss any payments.
2. Extend your cash flow: Depending on your method of payment, when you make a purchase, when your statement is issued and whether or not you are carrying forward a balance on your account from your previous statement period. If you pay by direct debit, your payment will be processed 10 days after your statement is issued.
3. Membership Rewards Program: Subject to the Terms and Conditions of the Membership Rewards program available here. Merchants classified as "government" include the Australian Taxation Office, the Australian Postal Corporation (Australia Post), Federal/State and Local Government bodies. Industry specific earn rate may apply when you use a payment account, payment aggregator, services of a third party or online retailers that sell goods for another merchant. For example a payment made to Local Government bodies processed through a payment aggregator may earn rates at the government earn rate. There may be tax implications associated with participation in the Membership Rewards program. You are advised to check with your accountant or tax adviser for further information.
4. American Express Travel Online: To earn or redeem Membership Rewards points, Cards must be enrolled to the American Express Membership Rewards program, and your Card Account must be in good standing. To redeem Membership Rewards points with American Express Travel Online, you need to have available limit on your Card for the full transaction amount of the booking. You will then receive a statement credit within 3 business days for your points redemption. If the credit isn’t on the same statement as the transaction, it should appear on your next statement. Please pay all amounts due each month. You will earn Membership Rewards points on the full dollar amount charged to your Card. All bookings are subject to the terms and conditions of our Membership Rewards Program.
5. Transfer Points to Partners: To redeem points at any Partner Program you must be a member of the applicable Program. Enrolment in such Programs is solely your responsibility and fees may apply. The minimum requirement and transfer rate varies. Subject to the Membership Rewards Terms and Conditions.
6. Pay with Points: You may use Points to make purchases at certain retailers listed on our website. You need to indicate at the time of purchase that you wish to Pay with Points. Individual retailers provide specific delivery and refund polices. Refund policies for Pay with Points retail Partners are subject to the Terms and Conditions of the retail Partner. The retailers’ conditions and refund policies may be amended by the retailers from time to time.
7. Cover Charges with Points: For each successful transaction with covered with points, points will be debited from your Membership Rewards account and a credit placed on your Card in line with the points chosen to be used for the Eligible Charge. A minimum of 1,000 Membership Rewards points is required to cover any eligible transaction with points. Any credit to your Card account cannot exceed the amount of the relevant Eligible Charges. A credit will appear on your statement identified as “Membership Rewards Credit”. Points will be debited immediately and the credit will take up to 3 business days to appear online. Credits processed after the Card account’s statement closing date will appear in the following statement. You are still responsible for payment of the amount due on your Card account by the due date. Any charges covered by points is not redeemable for cash via Credit balance refund. American Express will select and display each eligible charge that can be covered with points (“Eligible Charge”) and the points rate required to cover the Eligible Charge. Each Eligible Charge must: (a) appear within the Online Statement of the Summary of Accounts page; (b) be redeemed within 2 months of the charge appearing on your Card account; (c) not currently or have previously been disputed; and (d) not be a fee. Eligible Charges, including the points rate required to pay for the Eligible Charge, may be changed at any time without notice. Eligible transactions can be covered by points via your online account or American Express mobile app. Covering charges with points is available only to Basic Cardmembers enrolled in the Australian Membership Rewards program and is subject to the full Membership Rewards Terms and Conditions. Authorised agents, authorised account managers, additional Cardmembers and Authorised Additional Cardmembers are not eligible. All Linked Card accounts must be in good standing. For more information on Cover Charges with Points click here.
8. A business must be a Qantas Business Rewards Member to earn Qantas Points for business. Membership and the earning of Qantas Points as a business are subject to the Qantas Business Rewards Terms and Conditions. Points are earned in accordance with and subject to the American Express Qantas Business Rewards Card Points Terms and Conditions. Your business will earn 1.25 Qantas Points per $1 of everyday spend, which does not include annual fees, late payment fee and fees and charges for foreign currencies. Your business will earn 0.5 Qantas Points per $1 spent at participating merchants classified as 'utilities' including gas, water and electricity providers; 'government' including the Australian Taxation Office, the Australian Postal Corporation, federal/state and local government bodies; and 'insurance' excluding insurances offered by American Express. Industry specific earn rate may apply when you use a payment account, payment aggregator, services of a third party or online retailers that sell goods for another merchant. For example a payment made to Local Government bodies processed through a payment aggregator may earn rates at the government earn rate. Your business will earn 2 Qantas Points per $1 spent on the following Qantas Products and Services purchased on the Qantas merchant account (i.e. directly from Qantas): Qantas passenger flights (with a QF flight number), Qantas Holidays, Qantas Branded non-airfare products, and Qantas Frequent Flyer and Qantas Club membership joining and annual fees. Excludes Jetstar. For the full list of exclusions, please refer to the American Express Qantas Business Rewards Card Points Terms and Conditions. Once you have earned a total of 500,000 Qantas Points on your Card Account in a calendar year, your earn rate of 1.25 Qantas Points per $1 spent will change to 0.75 Qantas Points per $1 spent on everyday business purchases. All other earn rates (Qantas products, services and government, utilities and insurances spend) will remain unchanged. The points threshold is based on eligible Qantas Points earned during a calendar year and will be reset on 1 January each year. Qantas Points earned by all Card Members on a Card Account contribute to the 500,000 points threshold each calendar year. Bonus points earned from Acquisition bonus offers and marketing campaigns are excluded from the threshold.
9. Velocity Points are earned in accordance with and subject to the American Express Velocity Cards Points Terms and Conditions, and exclusions apply. Eligible purchases do not include Card fees and charges, for example annual fees, interest, late payment, cash advances, balance transfers, traveller’s cheques and foreign currency conversion. These do not earn Velocity Points. For the full list of exclusions, please refer to the American Express Velocity Card Points Terms and Conditions available here. The earn rate of 2 Velocity Points per $1 spent on Virgin Australia only applies to purchases made in Australia. You will earn up to 0.5 Velocity Points per $1 spent at participating Merchants classified as "government" including the Australian Taxation Office, the Australian Postal Corporation, Federal/State and Local government bodies. Industry specific earn rate may apply when you use a payment Account, payment aggregator, services of a third party or online retailers that sell goods for another merchant. For example, a payment made to Local Government bodies processed through payment aggregator may earn rates at the government earn rate. There may be tax implications associated with participation in the Rewards program. You are advised to check with your accountant or tax advisor for further information.
10. Employee Cards: Employee Card Members must be over 18 years of age. The Business and the Primary Card Member are jointly and severally liable for all Employee Card spending. Each employee is entitled to only one (1) Employee Card.