If you’re looking for a source of income that doesn’t require the typical nine-to-five job, an online business could be your ticket.
In Australia, there are plenty of opportunities to start an online business. However, there are also a few things that you need to think about before getting started. In this article, we will go over the steps that you need to take to get your business off the ground. Some suggestions for a business idea are provided at the end.
How to start an online business in Australia
An online business is a business that is conducted primarily over the internet. This can include businesses that sell products or services online, as well as businesses that operate entirely online.
Online businesses have a number of advantages over traditional brick-and-mortar businesses, including lower overhead costs, a wider potential customer base, and the ability to reach customers anywhere in the world.
However, there can be some challenges that come with running an online business, such as managing inventory and shipping logistics.
If travelling is a motivation for starting an online business, you’re going to want to start one that you can do 100% online, from the middle of the desert if that’s where you find yourself parked for the night.
Let’s talk about how to start an online business
Step 1. find your niche
The first step to starting any business is finding your niche.
Traditional advice on choosing a niche is that it should be focused on a product or service that you’re passionate about. However, we don’t agree.
Why?
Because, if you turn your passion into your business, your source of enjoyment and relaxation will soon turn into a source of obligation.
We recommend keeping your passion as a passion, and think about a business in terms of it being a way to provide you with money so you’ll have the means to spend more time (by choice) doing the things you’re passionate about. A business should provide you with time freedom.
To decide on a niche, you could start by asking the question ‘Who do I want to help?’ In other words, ‘Who do I want my customer to be?’
When you focus on what your audience wants rather than what you want to give them, you’re more likely to find success.
Don’t jump into designing logos and branding
Before you start brainstorming ideas for your business or choosing the colours of your business cards (which you won’t need if you’re running an online business!), you need to do some research.
You need to get the foundations of the business right before you put the decorations on the top.
Step 2. Do your research
Before you rush to start your e commerce business, sell your online services, or tell your Instagram followers to shop online at your new website… you need to do some research. There are a lot of moving parts when it comes to setting up an online business, so you’ll need to make sure you have a solid understanding of everything from web design and hosting to marketing and sales.
Should you write a business plan?
Maybe not! Here’s why.
Business plans are typically long documents that you’ll invest many hours into preparing, and then likely put away and never look at again.
Rather than writing a business plan, start to design a business model.
What is a business model?
A business model is a diagram that illustrates how the business will make money. It is a plan that outlines how a business will generate revenue and make a profit. You can design your model using a tool called the Business Model Canvas.
The canvas is a visual representation of your business. It includes all of the parts of your business, and how they will work together to increase your chances of success. The canvas has 9 blocks, which you’ll need to define to get an overall picture of how your business is going to work.
1. Customer segments
You will need to define your target market (i.e. who you want to help) and figure out who your customers are and what they need help accomplishing.
2. Value proposition
What are you offering your customers that is of value? What makes your product or service unique? In other words, what value are you going to provide to help your customers accomplish their goals?
3. Channels
How are you going to reach your target market? What marketing and sales channels will you use? For an online business, you should focus on digital channels such as a website or online store. Learn about setting up your own website.
4. Revenue streams
How will you generate revenue? What are the sources of income for your business? Will you have multiple streams of income, or focus on just one?
5. Customer relationships
How will you interact with your customers? How will you build customer loyalty and keep them coming back? To achieve time freedom, consider having an automated or hands-off relationship with your customers.
6. Key resources
What resources do you need to run your business? This could include things like people, technology, or money. At a minimum, you’ll need a laptop or desktop computer and internet connection. If you’re starting out, ‘you’ are the key resource for the business.
7. Key activities
What are the most important activities that need to be carried out in order for your business to be successful? Things like creating content for your website, setting up email campaigns etc. are going to be on your list.
8. Costs
What are the costs associated with running your business? This could include things like marketing expenses, labour costs, and rent or mortgage payments. Try to keep your costs to an absolute minimum at the start. You want the business to make you money, not cost you money. The internet is full of free tools, so always search for alternatives to paid products. The things which you can’t find alternatives will typically be related to getting your website online (e.g. domain name registration, hosting fees).
9. Revenue
The exciting bit!! What are the sources of money coming into your business?
There are a few things to keep in mind when you’re designing your model. It should be:
- Flexible and adaptable. As your business grows and changes, so too should your model.
- Aligned with your overall business strategy.
- Realistic and achievable. Don’t bite off more than you can chew!
To learn more about designing a model for your business, check out resources on the Strategyzer website, and get yourself a copy of the following book:
Test and validate your business model
Once you’ve sketched out a business model, you need to test and validated the assumptions you’ve documented. In the beginning, how you think your business will work is just a collection of hypotheses (i.e. guesses) and you’ll need some data to test out whether they will work in the real world.
We highly recommend the following book to design experiments to test the assumptions in your model:
Sources of funding
How are you going to fund your business dreams?
You can start an online business with less than $100.
If you can’t afford to throw $100 at your online business dreams, it might be worth revisiting the idea sometime in the future.
Personal savings
The most common way to finance the start-up of a business is to use personal savings. This option can be a great way to reduce the amount of money that you need to borrow from outside sources. However, it is important to note that using personal savings can be risky, as you may not have enough money saved up to cover all of your expenses.
Credit cards
We don’t recommend this. Using a credit card can be risky, as you may end up paying more in interest and fees than you originally planned.
It is important to make sure that you understand the terms and conditions of your credit card agreement. Be sure to read the fine print so that you know what you are agreeing to.
Another thing to keep in mind when using a credit card to finance your business is that you will need to make sure that you can afford to pay back your debt. Credit card interest rates can be high, so it is important to make sure that you can afford to make monthly payments on your debt.
Business loans
You are unlikely to gain a loan from a bank to fund a business. In fact, We’d venture to say that your chances are zero.
You might stand a chance by asking one of the 3F’s (as they are known in entrepreneurship): family, friends, and fools.
But try to get your idea off the ground with just your computer, internet connection, and your smarts (+lots of YouTube videos!)
Business registration
You should register a business name. The Business Names Registration Act requires all businesses operating in Australia to have a registered business name.
To learn exactly how to do this, visit the Australian Securities and Investments Commission ASIC: https://asic.gov.au/for-business/registering-a-business-name/
You can also contact your state or territory’s business advice service. In most cases, you can register a business name online.
When registering your business name, you will need to provide some basic information, including the following:
- The name of your business
- The type of business you are operating
- The address of your business
- The contact details of your business
You will also need to pay a fee to register your business name. If you’re just testing out your idea for an online business, you can hold off on doing this until you’ve tested the assumptions in your business model. Start by trading under your own name to reduce costs.
The fee is different in each state and territory, so be sure to check with your local business registry for more information.
Once you have registered your business name, you will need to display it prominently at your place of business. You will also need to use it on all of your marketing materials, such as letterheads, business cards and website.
Register your Australian Business Number (ABN)
An Australian Business Number (ABN) is a unique 11 digit number that is used to identify businesses in Australia. It is free to register an ABN.
You will need to register for an ABN if you plan on starting a business in Australia. You can register for an ABN online at abn.business.gov.au.
Do you need to pay goods and services tax (GST)?
If you’re earning less than $75,000 (highly likely if you’re just starting out) you are generally exempt from having to register for GST.
Contact the Australian Taxation Office (ATO) to check. If you do need to register for GST, you can do it online at www.ato.gov.au
Register a domain name
To register a domain name, you will need to contact a domain name registrar. A domain name registrar is a company that is responsible for registering domain names. Some of the most popular domain name registrars include GoDaddy, or Crazydomains.
But, if you’re going to be using a platform like Squarespace, they will often include a free domain name for 1 year when you sign up. So don’t dive in and register your domain until you’ve decided what platform you are going to run your online business on.
Major platforms include:
- Squarespace
- Wix
- Shopify
- WordPress (note, there are two options – WordPress.org (free, but you will additionally need hosting) and WordPress.com (paid)
When contacting a domain name registrar, you will need to provide them with your desired domain name and payment information. Most registrars will charge an annual fee for registering a domain name.
Once you have registered a domain name, you will need to configure it to point to your website’s hosting account. This can be done by contacting your web hosting provider and providing them with the relevant information.
Create a website or eCommerce store
Your business idea needs a home on the internet. There are L O T S of options to choose from. If this is your first business and you’re on the lower end of the tech-savvy scale, I’d recommend finding user friendly ecommerce platforms like Squarespace to get started.
We will always choose WordPress, but the learning curve is a bit steeper and the interface can appear intimidating. Whereas Squarespace and Shopify are like a Mac Computer – they look nice and just work 🙂
Set up a business bank account
An account that’s separate from your personal banking, that is specifically for your business, is highly recommended. But you can still start your business without one if you’re just starting out.
There are several benefits of having a business account:
- It helps you keep track of your business finances
- It makes it easier to manage your business expenses
- It can help you save money on taxes
If you are starting a business in Australia, we strongly recommend setting up a business bank account. You will need your ABN and business name registered to do this. Having a business account will ultimately make it easier to track your business finances and expenses, and it will also make it easier to file your taxes at the end of the year.
Insurance
Do you need personal liability insurance? We can’t provide you with legal advice, but we are not familiar with small business owners with an online store getting personal liability insurance.
How to get your first client?
There are a few ways to get your first client with an online shop. You can use strategies like SEO (search engine optimization) to rank your website higher in search engine results pages, or you can use online advertising platforms like Google AdWords to generate traffic to your website. You can also use social media platforms like Facebook and Instagram to reach out to potential customers.
Whatever strategy you choose for your online business ideas, be sure to put in the time and effort required to succeed. There is no magic pill when it comes to marketing, so be prepared to do some hard work.
The challenges you may face when starting a business
What challenges do you face setting up a business?
This is a question you need to ask yourself before starting a business. There are many challenges when it comes to setting up and running a business, so you need to make sure that you are prepared for them. Here are some of the challenges you may face:
- You will need to invest time and money (although keep this to a minimum at the start) into your business
- You will need to create a website or online store
- You will need to market your business online
- You may face competition from other businesses
- You may face challenges with shipping and delivery
- You may face challenges with payment processing
- You may face legal challenges if you are selling products or services that are regulated by the government.
Be prepared for these challenges and more by doing your research and planning ahead. This way, you can avoid any surprises and set your business up for success.
Support organisations – sources of help in Australia
There are a number of organisations that can provide advice and support to small businesses in Australia. If you are starting a small business, be sure to check out these organisations for help and advice.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO)
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) provides free and independent advice to small businesses and family enterprises in Australia. The ASBFEO can help you with a range of issues, including disputes with creditors, disputes with other businesses, and disputes with government departments.
Australian Taxation Office
The Australian Taxation Office (ATO) provides a range of services and support for small businesses, including tax help, GST help, and superannuation help.
The Australian Competition and Consumer Commission (ACCC)
The Australian Competition and Consumer Commission (ACCC) provides information about business rights and responsibilities, including consumer law and fair trading.
The Fair Work Ombudsman
The Fair Work Ombudsman (FWO) provides advice and assistance to employees and employers about their rights and responsibilities under the Fair Work Act 2009.
Which business structure?
There are a number of different business structures in Australia, including:
Sole trader
A sole trader is a business structure where the owner is the only person responsible for the debts and liabilities of the business. There is no legal distinction between the business and the owner, so the owner is liable for any debts or legal actions taken against the business.
Partnership
A partnership is a business structure where two or more people operate the business together. The partners are jointly liable for the debts and liabilities of the business.
Can be risky. Often turn out badly.
Company
A company is a legal entity that is separate from its owners. The owners of a company are not personally liable for the debts and liabilities of the business, but they may be liable if they have provided personal guarantees.
Trust
A trust is a legal arrangement where property or assets are held by one person (the trustee) for the benefit of another person (the beneficiary). Trusts can be used for a range of purposes, including holding property, investing money, and establishing charitable foundations.
Superannuation fund
A superannuation fund is an investment vehicle that is used to hold and manage money for retirement. Superannuation funds are regulated by the Australian Prudential Regulation Authority (APRA).
You will need to choose a business structure that is right for your business. Consider factors such as the size of your business, the type of products or services you sell, and your personal liability when making your decision.
Our top picks for a location independent business
Blogging business
Blogging can be a great business for achieving passive income. You can run this business online so be 100% location independent. When done correctly, blogging can help you build an audience of loyal followers, who are interested in your content and who may be interested in purchasing the products or services that you offer.
When starting a blog, it is important to choose a niche topic that you are interested in and that you know something about. Once you have chosen your niche, be sure to create quality content that is informative and engaging. If you can do this, then you will be well on your way to building a successful blog.
Recommendation: Check out Adam Enfroy’s Blogging Masterclass to learn how to do this well!
Affiliate marketing
Affiliate marketing is another great online business option. This type of marketing involves promoting products or services on your website or blog, and earning a commission for every sale that you make.
Affiliate marketing is a great way to earn passive income, as you can promote products or services that you use and love. If you are interested in affiliate marketing, then be sure to check out our guide on how to start an affiliate marketing business.
Online businesses: some more business ideas
Online store
An online retail store is a business that sells products or services online. This type of business can be a great option for entrepreneurs who are looking to start their own business from scratch. There are a number of platforms that you can use to set up an online retail store, including Shopify.
Starting an online retail store is a great way to reach a global audience and tap into the growing e-commerce market. If you are looking to start your own online business, then be sure to check out our guide on how to start an online retail store.
Online shopping is showing no sign of slowing down, so why not profit from the trend.
Freelancer
If you have a knack for writing and enjoy spending time with clients then you may want to consider freelancing (e.g. a freelance writer or designer) as your online business. Freelance writers provide content for a variety of different websites and businesses and can earn a commission for every article that they write.
Service-based business
A service-based business is a type of business that provides a service to its customers. This is not very compatible with the idea of starting an online business to get your time back. But, this type of business can be a great option for entrepreneurs who are looking to start their business from scratch and have a skill that will help a group of customers. There are a number of platforms that you can use to set up a service-based business, including Fiverr and Upwork.
Starting a service-based business is a great way to reach a global audience and to tap into the growing gig economy.
Coaching business
A coaching business is a type of business that provides coaching services to its clients. This type of business can be a great option for entrepreneurs who are looking to start their own business from scratch. But you will typically need a client base to start with, rather than building a website and hoping customers will find you.
Starting a coaching business is a great way to reach a global audience and to tap into the growing trend of personal development.
Final thoughts
There are a number of different ways to get started and there is no shortage of online business ideas to bring in income. We’ve written about lots of ideas for jobs in another blog post. Be sure to consider all of the options that are available to you before making a decision. Good luck!
FAQs
Is it easy to start an online business in AU?
Yes, it is relatively easy to start. However, you will need to make sure that you have a clear understanding of the Australian market and the potential customers that you will be targeting.
What are some popular online businesses in Australia?
Some popular online businesses in Australia include e-commerce stores, affiliate marketing businesses, and service-based businesses.
What are the benefits of starting?
Benefits include the ability to reach a global audience, the ability to tap into the growing e-commerce market, and the ability to avoid many of the traditional costs associated with setting up a brick-and-mortar business.
How much does it cost to start?
The cost will vary depending on a number of factors, such as the type of business that you want to set up and the platform that you use to set up your business. However, you can expect to pay anywhere from a few hundred dollars to a few thousand dollars to start an online business in Australia. Most of the skills you need to get a business online (e.g. how to design a website using Squarespace) can be found on Youtube.
How easy is it to run an online business from Australia?
Assuming you have a good understanding of the Australian market and potential customers you’re targeting, it’s relatively easy to run an online business from Australia. That being said, all businesses – whether based online or offline – come with their own challenges. Make sure you do your research before starting any type of business. Are there any specific challenges I should be aware of when starting an online business in Australia?
Some specific challenges you might face when starting an online business in Australia include dealing with time zone differences if you have international customers, understanding the Australian consumer landscape, and being aware of Australian business regulations. These are just a few examples – be sure to do your own research to identify any other potential challenges you might face.
What are some common mistakes people make when starting an online business in Australia?
Some common mistakes people make when starting an online business in Australia include failing to do their research, not having a clear understanding of the Australian market, and not having a tested business model.
Do your best to avoid these mistakes by planning ahead and doing your research before you start your online business.
Am I too old to start selling online?
No! You can sell online at any age.
I hope this article has given you some insights into how to start an online business in Australia. Be sure to consider all of the options that are available to you before making a decision.
Good luck!