Starting a business as a minor can be an exciting yet daunting experience. It is normal to feel lost at times, but having the right guidance can help pave the path to running a successful business as a minor in Australia.
If you are unsure about how to start a business as a minor, here is everything you need to know.
1. Conduct Thorough Research
The first step to successfully starting a business is to develop a clear business idea. Even the best of the ideas need to be refined. It can be done best by conducting thorough research about the industry, audience, and products.
Research can surely take some time and energy, but the information you gather can help you ensure its stability in the long run.
Once the foundation is set, you must move on to creating a business structure. From sole proprietorship to partnership, every business structure has its own pros and cons. Hence, you must make your choices after a lot of consideration.
2. Obtain Guardian Consent
Minors can achieve so much with potential. However, there are some limitations they must be mindful of. For example, minors cannot enter into contracts or take on specific responsibilities. They will need a guardian to provide consent and act on their behalf in financial matters.
In order to undertake these responsibilities, your guardian must sign co-sign agreements related to your business. Their involvement is necessary till the minor becomes of age and undertakes responsibilities by themselves.
3. Register Your Business
Once the business structure has been decided and your guardian is on board with the idea, the next significant step is to register your business. It starts with giving your business a name first. You must remember to register a business name with ASIC if it’s different from your own.
Make sure that the name you choose for your business is available for use. It can take some time to find the perfect name for your business, but it can save you from any legal trouble in the long run.
4. Apply for a TFN
Although TFNs are associated with adults, they are equally important for minors running a business. In this website, you can learn about applying for TFN for a minor and the doors of opportunities it can open for you.
A TFN is essential for managing your business’s tax obligations. It ensures that your business income is reported correctly and that you pay your taxes. Once your business starts to grow and generate income, your TFN can also be used in the GST registration process.
5. Set Up Financial Systems
You must establish a separate bank account for your business. This ensures that your personal and business finances are separate. A separate account dedicated to your business can help in managing cash flow, tracking expenses and income, and so much more.
Make sure you also set up an accounting system to track sales, expenses, and profits and keep detailed records of business transactions.