Breaking Down the Costs of Starting a Business in Australia: What You Need to Know for 2025

Starting a business is an exciting journey, but it comes with significant financial commitments. From legal registration to technology setup, the costs of launching your business can add up quickly. A clear understanding of these expenses is crucial to making informed decisions and avoiding surprises.

At Ashmans Accounting, we specialise in helping new businesses get off the ground with tailored financial advice and strategic planning. We collaborate with you to develop a customised plan that aligns with your goals, ensuring you have the right budget for each stage of your business journey. Whether you’re just starting or planning for long-term growth, our team of experts is here to keep your finances on track, so you can focus on building a successful business.

Legal and Registration Costs in Australia

Starting a business in Australia involves several legal and registration steps associated with costs. Understanding these upfront is crucial to budgeting effectively.

1. Business Name Registration and Australian Business Number (ABN)

• Every business in Australia must register for an ABN, which is free. However, to operate under a name different from yours, you must register your business name with the Australian Securities and Investments Commission (ASIC). Registering a business name costs $44 for one year or $102 for three years.

2. Company Incorporation

• If you choose to set up a Pty Ltd (private company), the registration fee with ASIC is around $400 - $500 as of 2024. This provides your company with limited liability status, protecting your assets in case of business failure. Additional costs may apply for legal advice when choosing the right structure (e.g., sole trader, partnership, or company).

3. Legal Advice and Documentation

• Hiring a lawyer to draft foundational documents like your company constitution, shareholder agreements, or partnership agreements may cost anywhere between $1,000 to $5,000, depending on the complexity and size of your business. Legal fees for ongoing advice can also vary, but ensuring your business complies with Australian law from the start is crucial.

By understanding these legal and registration costs, Australian entrepreneurs can better prepare for the initial investment to launch their business. For more detailed information on setting up a company, ASIC provides a helpful guide on registration processes and fees.

Licenses and Permits

When starting a business in Australia, obtaining the necessary licenses and permits is an important step to ensure you’re operating legally. The costs of licenses vary depending on the type of business you’re running and the state or territory you’re located in. Here are some key considerations:

1. Industry-Specific Licenses

• Certain industries in Australia require specific licenses to operate. For example, businesses in sectors like hospitality (alcohol licenses), construction, healthcare, or retail may need special permits. Depending on the business activity and local regulations, the costs can range from a few hundred dollars to several thousand. It’s important to check your industry’s requirements on Business.gov.au to understand the licenses you’ll need.

2. Local Council Permits

• Many businesses also need approval from their local council to operate legally. Common permits include outdoor signage, food safety compliance (for cafes or restaurants), and zoning approval. The fees for these permits vary widely based on location and business type, typically ranging from $100 to $500. 3.

Environmental and Safety Permits

• For businesses that may impact the environment or need to meet safety standards, such as manufacturing or agriculture, there are additional environmental permits or safety regulations you must comply with. These are regulated by the state or territory governments, and the fees depend on the nature of your operations.

Before launching your business, you must identify which licenses and permits apply to you. Failing to obtain the proper approvals can lead to hefty fines or restrictions on your business operations. 

Office Space and Utilities in Australia

One of the primary costs when starting a business is setting up your office space. Whether you decide to work from home or rent a dedicated office, it’s important to factor in both the rental costs and utilities.

1. Leasing an Office

• Office rental rates in Australia vary depending on the city and location. In major cities like Sydney or Melbourne, commercial office space can cost anywhere from $400 to $1,000 per square meter annually, while regional areas may offer more affordable options.

• In addition to rent, consider costs such as bonds (typically a few months of rent upfront) and fit-out expenses (e.g., furniture and design).

2. Utilities

• Utilities are ongoing business expenses, including electricity, internet, water, and phone services. Depending on the size of your office and the services you need, you can expect to pay around $300 to $500 per month for utilities.

• Consider energy-efficient options to reduce long-term costs, especially in states with higher utility rates.

By weighing the options between leasing, working from home, or using coworking spaces, you can select the best option for your business and budget.

Technology and Equipment

Every modern business requires a solid foundation of technology and equipment to operate efficiently. The costs here will vary depending on the type of business you’re starting, but here are some key categories to consider.

1. Hardware

• Essential equipment such as computers, printers, phones, and other office tools are fundamental to most businesses. Depending on your needs, the initial setup can cost anywhere from $2,000 to $10,000, especially if your business requires specialised hardware.

2. Software and Subscriptions

• Many businesses use software tools to manage their operations, from accounting to customer relationship management (CRM). Subscriptions to accounting software like Xero or MYOB typically cost around $50 to $100 per month.

• You may also need licenses for other tools like Microsoft Office or design software, which can cost between $100 to $300 annually.

3. Ongoing Maintenance

• Don’t forget to budget for ongoing maintenance and upgrades for hardware and software. This includes IT support or replacing outdated technology as your business grows. Setting aside $500 to $1,500 annually for maintenance is a good starting point.

Investing in the right technology from the beginning can streamline your operations and boost productivity, making it a crucial component of your overall budget.

How Ashman’s Accounting Helps You Set Up and Keep Your Business Financially on Track

Starting a business can feel overwhelming, especially when juggling multiple tasks, from setting up operations to managing finances. That’s where Ashmans Accounting comes in. 

Our business startup services focus on creating a solid foundation by helping you develop a clear strategic and operational plan. This plan acts as your business’s road map, ensuring every financial decision aligns with your short-, medium-, and long-term goals.

We start by collaborating with you to answer key questions:

• Is your business idea commercially viable?

• What kind of market exists for your product or service?

• Have you identified your target market and competitors?

• How much startup capital will you need to get off the ground?

‍Ashmans Accounting goes beyond just offering bookkeeping and tax preparation—we offer tailored financial advisory services that help keep your finances on track as your business grows. Our team is dedicated to providing ongoing support, from tracking your financial performance to identifying areas for improvement through real-time reporting and benchmarking. We’re with you every step of the way to ensure that your business remains financially healthy and compliant with Australian regulations.