How to set yourself up with an extra stream of income
We hardly need the stats to back up what we intuitively know, and possibly feel: the Australian minimum wage went backwards in contrast with inflation in the year to May, OECD data shows.
And guess what? We are one of only 11 countries with that dubious honour. So, it’s probably no surprise that many Aussies – even when they already have a job – are now looking to turn a side-hustle into cold, hard cash.
Indeed, nearly half of full-time employees (46 per cent) and four in 10 part-time workers (39 per cent) have a second, income-seeking gig, a new survey by e-commerce platform Omnisend found.
The vast majority – predictably – report that it’s driven by need. But interestingly, employment status matters not: money is motivating 83 per cent of full-time workers, and 82 per cent of the unemployed, to get enterprising.
And many are making decent dosh. For example, 51 per cent of even full-time workers earn more than $1000 a month from their side hustle. So, if you’re keen yourself, here are my five simple steps to starting a business.
Step 1: Know your market and target. A small business will fly or flounder based on the quality of the product. And a big part is the competitive landscape.
Where many small businesses come unstuck is failing to reserve enough money to pay their quarterly business activity statement (BAS).
So do market research – leaning into AI to help if you want – on similar existing products, their appeal and where you could gain an edge. If there are no existing products but an uncatered-for need, even better.
Next, get a clear picture of your buyer and how you can target them. Is your sales proposition physical, online or both? It’s also wise to write a business plan considering all of the above. With a quick Google search, there are decent online tools to help.
But let’s talk business backend.
Step 2: Decide your business structure. Your main options are sole trader or company. The sole trader is a simpler option – the owner has full control, and it’s straightforward at tax time, but there is one big advantage of a company: the business is legally separate from its owner/owners.
The standard company proprietary limited (Pty Ltd) structure means you that you and your assets have a level of protection if things go financially wrong. As a sole trader, you are solely responsible for any business debt or legal trouble (why insurance is extra vital).
A third option – a more complex one that requires professional advice from an accountant – is a trust.
Step 3: Register your business name with ASIC. The Australian Securities and Investments Commission is the body that handles everything from business registration to regulation.
Like a name? You need to check here whether it is available here.
But be sure to also check for restrictions and existing trademarks on the name using ASIC’s free tools and trademark search – this is to avoid rejection and future legal issues.
You will also see ASIC’s rules for acceptable business names, but they’re largely based around misleading associations or words that suggest official status, or offensive or inappropriate language. If all that pans out, you register your business name with ASIC’s Business Registration Service (make sure it’s the real one with .gov.au).
It’s an ATO requirement to register any business name unless it exactly matches your personal name. Do this even if your business name is your actual name with the addition of a business description like “roofing”. Otherwise, it cannot legally operate.
Business name registration is $45 for one year or $104 for three.
To do all this – you will also need to apply for an Australian Business Number, an 11-digit number that identifies your business and makes it easier for customers to find you and for government bodies to interact with you. This is a fast process at the time of registration.
Also consider trademarking your business name at this stage … this means that another entity cannot register your same business name. You will need to make another choice too …
Step 4: Choose whether to be in the GST regime. This is a bit of a tricky one upfront, but you must charge GST and remit it to the government if you anticipate your business will earn more than the standard GST registration threshold of $75,000 in gross annual (minus GST) turnover.
You do this with the ATO and can vary your status on a rolling 12-month basis if business ebbs or flows.
Step 5: Set up your bank account – and financial safety. Where many small businesses come unstuck is failing to reserve enough money to pay their business activity statement (BAS) at the end of the quarter and any potential company tax at the end of the year (note that companies are taxed at a lower rate than individuals, another advantage of a company structure).
Your BAS includes both the GST and pay-as-you-go tax that your business should have collected. It helps that it’s quarterly, but the bills can still hit hard. You need to reserve this money each pay, and invoice in a separate business subaccount.
You also need to be aware that as of July 1, 2026, under so-called payday super, businesses have had to remit employee superannuation with salaries. While this means you must come up with the money upfront, it is probably preferable to scrounging for it when times are tight.
Remember, if you start a company, you may well pay yourself as an employee – it’s tax effective. But the real beauty of that is you will also be forced to put aside superannuation for yourself, something I seriously urge sole traders to make sure they do too.
Nicole Pedersen-McKinnon is author of How to Get Mortgage-Free Like Me, available at nicolessmartmoney.com. Follow her on Facebook, X and Instagram.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.