Defining the structure or type of business you want to set-up is an essential and helpful way to start.

The structure you choose will depend on many factors including your interests, skills and experience, financial situation, goals and aspirations.

Your business structure can determine:

the licenses you need
how much tax you pay
whether you're considered an employee, or the owner of the business
your potential personal liability
how much control you have over the business
ongoing costs and volume of paperwork for your business.

If you have a viable business idea, you can start your own. But you don’t have to develop an original idea to be in business – you can buy an established one. You can buy a franchise, join a cooperative or set yourself up as a contractor.

Each business option has its own benefits and challenges.

You won’t be locked into one business structure for the life of your business. As your business changes, you may decide to move to a different type of business structure.

The Business Registration Service contains an easy online tool which can help you decide which business structure best suits you and your business when you are ready to start.

You should consider seeking professional advice to discuss your business structure from an advisor, accountant or lawyer, and certainly before making any offers or signing any contracts.

Business structures overview

Business structure tool

Five ways to set up your business

Starting your own business based on your idea gives you control over how you operate, your processes and suppliers. There’s flexibility in how you structure your business - depending on your needs and goals, you can get established as a sole trader, partnership, company, trust or cooperative.

There is some risk involved in the early stages as you are responsible for managing and building every aspect, such as the financial health of your business and a customer/client base. Your income could be unpredictable for a period of time.

When you buy an established business, there will be an existing customer or client base, suppliers, processes and operations. You don’t have to come up with an original idea and set-up the administration activities – you can focus on using your ideas to help it grow or take it in a new direction

However, you may be locked into existing aspects that you either don’t like or agree with when you start.

You will have the independence of being a small business owner with a business network behind you.

Be mindful that there isn’t endless flexibility in this arrangement - the franchisor shares in your profit and you’re restricted in what you sell, your processes, marketing and suppliers.

You can be your own boss and work from home – or somewhere else you choose - while building a flexible workload to suit your life.

However, your volume of work may be unreliable and you’re not eligible for benefits including holiday pay and superannuation.

This business structure is owned and controlled by members with shared responsibilities and limited liabilities. There is a greater focus on delivering benefits for members than maximising investor return. All members have voting rights regardless of their level of investment – this can be both positive and negative

Starting a business checklist

Contractors

Working as a contractor

Plan your co-operative

Franchising