How much does it cost to start a business in Australia | 2025

Turning a bright idea into a new business is exciting, but many entrepreneurs underestimate the cost of getting a startup off the ground. There are legal fees, insurance costs, and capital expenditure to sort, even before the business can begin operating.

Failing to control these costs during the early stages puts undue stress on operations. You’re forced to fight fires and worry about daily expenses, rather than focusing on creating innovative products and services.

Let us explore the different types of costs involved when it comes to starting a business in Australia so you know exactly what to expect. There are also some ideas on how you can manage your startup costs effectively.

Table of contents
How much does it cost to start a business in Australia? Effective ways to utilize business startup costs Go global with Wise business account FAQs on startup business costs

How much does it cost to start a business in Australia?

There isn’t a one-size-fits-all approach to starting a business. Costs will vary depending on the business structure and industry. However, some expenses are common across all businesses, such as registering a business name and paying for insurance. You’ll need a business bank account in Australia, too.

Let us look at the different types of costs that you might come across when starting a business in Australia:

Business registration costs

First, the basics. You need to cover some registration costs before you start trading which can pile up to a total of $44 to $620.

• An Australian Business Number (ABN) is required for tax purposes and to get an au. domain name¹. You can register for an ABN for free via the Australian government’s Business Registration Service.
• After getting an ABN, you can register your business name with the Australian Securities and Investments Commission (ASIC). This costs $44 for 1 year or $102 for 3 years².
• You must also complete a company registration to raise investment as an incorporated company. The one-time fee for this is $597³.
• Getting a domain name costs around $10 to $20 for the first year⁴.

Business insurance cost

Startups need business insurance as a safety net, to protect against financial risks and legal liabilities. The cost of insurance will depend on your business type and industry, but can estimate in a figure of around $1,000 to $10,000 per year. However, all startups in Australia require certain types of business insurance by law. Startup business insurance costs include:

• Public liability insurance covers claims against your business. This costs roughly $500 to $1,500 for a startup⁵.
• Workers compensation insurance is required if you hire employees. It covers claims if they are injured or sick. The cost varies depending on the state and territory.
• Third party personal injury insurance is required for motor vehicles your business uses.

Other types of insurance you might need include building and contents insurance, income protection, life insurance, and management liability insurance.

Capital, stock, and equipment

You’ll require startup capital, some equipment to run operations, and goods or inventory depending on the type of business. These startup costs include but are not limited to:

• Vehicles, computers, business phones, office equipment, stock (goods)

Operational cost

When your business is up and running, you’ll need to cover day-to-day operational costs. These are ongoing expenses, rather than one-time fees or investments. Depending on your type of business and operation model, the operational costs can go up to - $1,000 to $10,000 per month. Start-up costs examples include:

• The rent paid for office space. This will vary by city and office grade. In Sydney it costs around $1,038 per square meter, while in Canberra it’s cheaper at $437 per square meter⁶.
• The cost of utilities. The annual cost of fixed-rate energy for a small business is roughly $4,000 for electricity and $12,000 for gas, according to Energy Australia⁷. Meanwhile, basic business broadband starts from $79 per month⁸.
• The cost of monthly and annual subscription fees for technology and software to support the business. This can vary wildly depending on the nature of the business — tech startups have to invest more here.

Labour cost

If you plan on hiring workers, you’ll need to pay at least the minimum hourly rate of $24.10 per hour, which is part of Australia’s Fair Work Act⁹. A full-time worker on the national minimum wage will command an annual salary of around $45,000.

You’re also required by law to pay an 11.5% super guarantee (SG) rate for each employee based on their ordinary time earnings (OTE). The rate is set to rise to 12% on July 1, 2025¹⁰.

For a small business with 5 employees, this would cost around $250,000 per year.

Marketing cost

A great product or service can fail if it doesn’t reach the right audience. Experts recommend spending around 10% of your total revenue on marketing via email, social media, search engines (SEO), and websites to engage customers and enhance brand awareness¹¹.

A small business running low-cost organic marketing with basic paid advertising can spend around $1,000 per month. This can be scaled up and down depending on business needs and performance.

Effective ways to utilize business startup costs

There are lots of ways you can reduce expenses and manage costs so they don’t spiral out of control.

Know your operational costs

Planning and preparation is key to success. It’s vital that you fully grasp the costs involved with running your business. Make a list of all possible costs and group them to focus on necessary spending. This helps cut out unneeded expenses and keeps your money situation under control.

Conduct in-depth market research to identify and plan the costs of everything you’ll need day-to-day. Thinking you only need $5,000, then later finding out that insurance, rent, software, etc. will cost double your initial estimates can really set you back.

Leverage cost-effective resource

Small businesses need tools that are both affordable, scalable, and serve a particular function or purpose. Don’t be shy in taking advantage of free trials, and always scrutinise paid tiers for software and tech so you don’t fork out for things you don’t need.

Leverage the use of free or low-cost software to handle jobs like bookkeeping, financial accounting, and payroll. Such tools give the ability to grow and adapt as new startup businesses tend to evolve over time.

Make use of Co-working Spaces

It has become a trend where startups often opt for co-working spaces which can be a short-term cost-effective office solution. This gives businesses the flexibility to expense as they grow while maintaining the collaborative culture within the company.

Outsource executables

While it may not be ideal for all startup business types, it would still be a smart approach to consider hiring freelancers for execution related tasks. At times, even agencies can come in handy as they help setup basic structures like a business website, accounting platform, and so on.

Outsourcing tasks play a role in reducing payroll expenses, especially in the early stages. This approach provides access to specialized skills without long-term commitments.

Monitor Cash Flow Closely

Regularly review financial statements to ensure sufficient liquidity. Identifying areas for cost-cutting helps maintain financial health.

Bang for the buck

Always stay on the lookout for opportunities that can offer more by paying less. Of course, there shouldn’t be too much of a compromise in quality. But this allows you to have more budget for operations that can fuel further growth of your startup.

For example, try building strong relationships with suppliers to negotiate better terms, deals, and favorable payment plans to significantly reduce costs. You can also partner with other businesses to exchange products and/or services to save on costs money. Making payments on the last day will also be a clever strategy because it allows the money to be invested in the interim, increasing your reserves.

Test and scale up

Start small with a viable minimum product (MVP) to test market demand and get feedback, allowing you to refine your product and business model before making further investment. Once you validate your product locally, conduct market research to identify regions with demand for your product and how much competition you have to fight against.

Going global unlocks a wide range of opportunities by reaching new customers that can help expand your startup business. However, it is important to ensure you fully weigh the costs involved in running a global operation to effectively manage your startup business funds.

Go global with Wise business account

For Australian startup businesses that are looking to go global, one of the challenges they face would be having a local business bank account. This makes it difficult to do transactions in the local currency for things like paying suppliers, contractors, and even getting paid by customers. In addition, making overseas payments can be an expensive guessing game, with transaction and exchange fees that sneak up and put a significant dent in revenue and profits.

Opening a Wise Business account gives you the ability to hold and exchange 40+ currencies at once. You can send fast, secure payments to 140+ countries, and get account details to get paid in 8+ currencies like a local.

Whenever you need to send, spend or exchange foreign currencies, you’ll benefit from the mid-market exchange rate, with low, transparent fees.

You’ll also benefit from all of these features with Wise Business:

• No ongoing fees, minimum balance requirements or foreign transaction fees
• Debit and expense cards for you and your team, which you can use in 150+ countries
• Multi-user access for team members, with ways to control and manage permissions
• Pay up to 1,000 people at once with the Wise batch payments feature
• Integrate with your favourite cloud accounting solutions
• Use the powerful Wise API for automation and streamlining workflow

Sign up for the Wise Business account! 🚀

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FAQs on startup business costs

What is the average startup cost for a business?

The average startup cost for a small business is around $3,000 to $5,000. Startups that don’t need physical premises, employees, equipment, and inventory are much cheaper to run. The actual cost will depend on the business type and its requirements.

Is $1,000 enough to start a business?

You can start a business with $1,000, but that amount will typically only suffice for a low-cost online business with few overheads in areas such as freelancing or consulting.

What is the cheapest business to start?

The cheapest businesses to start require minimal capital and little to no external expertise. Online businesses where you can use your own skills without a physical footprint — office, factory — tend to have fewer upfront costs and lower expenses. Examples include online tutoring, freelance writing, graphic design, and SEO consulting.

Can I get a business loan with no money?

It can be difficult to get a business loan with no money or income source. A lender usually requires proof — profit and loss statements, balance sheets etc. — that you can repay a loan prior to approval.

How to get funding for a startup?

You can get funding for a startup by applying for government grants, attracting investment from venture capitalists, and setting up crowdfunding. To secure startup grants, you must create a business plan and demonstrate your eligibility for a specific grant. In Australia, grants are provided by government departments and agencies.

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Sources:

1. Business gov au - Register for an ABN
2. Business gov au - Register your business name
3. ASIC - Corporation fees
4. GoDaddy - How much does a domain name cost
5. HMDI - public liability insurance cost
6. Realcommercial - Office costs
7. Energy Australia - Electricity and gas for small business
8. Aussie Broadband - Business plans
9. Fairwork gov au - Minimum wages.
10. Australia government - how much super to pay
11. Business Queensland - Marketing on a small budget