Every city has its own set of guidelines for entrepreneurs who are planning to set up shop in it. Melbourne is no different. Well generally, it still follows the rules and regulations for business and incorporation in compliance with Australian law. As expected, this would come with a load of paperwork and costs which you need to take care of before you can do actual business.
The costs and amount of paperwork will depend on the type of business you’ll be setting up. If you are establishing a startup as a sole owner, it will be a bit easier to register. However, if you want to incorporate it, you need a substantial amount of legwork (plus costs) before you can finally get down to business.
But why set up a startup in Melbourne? Aside from being a large and well-known city in Australia, Melbourne could boast of the following advantages:
- Melbourne is consistently voted as one of the most livable cities in the world.
Melbourne is a regular in a global liveability report that is compiled by the the Economist Intelligence Unit (EIU) each year. It has topped the list in 2010 and had stayed on top until recently in 2017. Adelaide and several Canadian cities also regularly appear in the top 10 list. The ranking is based on each city’s stability, safety, healthcare, education and infrastructure, among others.
- Its startup culture is alive and kicking.
Melbourne’s startup community is comprised of supportive people that can help other founders grow their business. Many coworking spaces have also popped up in Melbourne in the past years, so startup entrepreneurs have affordable options for office space.
- It has become a humble hub for innovation and techpreneurs.
Several startups in Australia have been successful, though they aren’t exactly household names since most of them are in the business to business (B2B) game. This includes Culture Amp and Envato among others. Melbourne also hosts several Startup events to provide workshops and mentoring in the community. This includes events such as Lean Startup Melbourne, Startup Grind and Startup Weekend.
So Melbourne is the place to be – and here are the initial costs you need to take care of before you can operate a legitimate business there:
AUSTRALIAN BUSINESS NUMBER
Whether you intend to be a sole proprietor (also known as sole trader) or a full-fledged company, you need to get an Australian Business Number (ABN). This is rather the easiest part because it does not come with any cost!
Registering a business name in Australia is priced at $35 each year. You can also have your business name registered for 3 years on a discounted price of $82. Sole traders won’t have any other problem, but if you’re planning to go full corporate, then you have additional costs to take care of.
You need to register with the Australian Securities and Investments Commission (ASIC) to receive an Australian Company Number (ACN). Cost of registration with the ASIC is around $479 for a proprietary limited company. In addition, you have to get a separate bank account for the company, so that would require another set of costs because most banks would require a minimum capital deposit.
COST OF EQUIPMENT (CAPITAL)
This pertains to your actual office needs such as an office space, office equipments such as computers, desks, modems, chairs, printers, and even the littlest things such as papers, sticky notes, whiteboards, pens, clips and the like.
The costs would of course depend on how large your team is. Startup entrepreneurs can however take advantage of more affordable options such as serviced offices which are already furnished with desks and basic office equipment, or coworking spaces which also double as a place for networking with other founders and freelancers from different industries. Later on, you may have to deal with the cost of labour for your employees and consultants if any.
Some challenges that startup entrepreneurs face in Melbourne is the struggle for capital funding. Melbourne and other Australian cities are not densely populated compared to economic powerhouses in the US (or China) and both investors and entrepreneurs in general remain conservative compared to their Western counterparts. The attitude of Australian businesses veer towards the safer route, probably because of the fear of backlash and uncertainty that comes with unpopular and unconventional methods and ideas in business.