Cost to start a trade business in Australia: what going out on your own really takes

You’ve done the apprenticeship, put in the years on someone else’s tools, and the thought keeps coming back: I could do this for myself. The licence is the easy part to price. The part that catches new tradies out is the wait, because the day you finish a job isn’t the day you get paid.

So here’s the short answer. Starting a trade business in Australia can cost roughly $15,000 for a lean sole trader and well over $100,000 for a small building firm. The right number for you comes from four buckets, and one of them, working capital, is the bucket most first-time owners leave out. This guide walks through each, gives you two illustrative budgets, and ends with a self-test on what’s worth borrowing for. (For the general version that covers any business, see our start-up budget builder.)

What are the four buckets of a trade start-up budget?

1. Licence, registration and insurance. The legal right to work, and cover if something goes wrong.
2. Ute, tools and equipment. What you need to turn up and do the job.
3. Systems and admin. Quoting and invoicing software, phone, accounting help, signage.
4. Working capital. Cash to cover your costs and your own living expenses until clients pay.

Add them up, subtract the cash you have, and what remains is your gap. Coaching question to start with: which of these four have I actually priced? Most people have priced two.

What do licences and registrations cost in 2026?

Licensing is run by each state, so the fees and the rules differ. Using NSW as an example, the NSW Government’s fee schedule for July 2026 to June 2027 lists these new individual application fees:

Licence or certificate	1 year	3 years	5 years
Trade or specialist contractor licence	$403	$803	$1,235
Building contractor licence	$883	$1,654	$2,890
Trade qualified supervisor certificate	$172	$291	$501
Building qualified supervisor certificate	$181	$321	$547

Those are NSW’s published fees, and the page notes they may rise with CPI each financial year. Other states, such as Queensland and Victoria, have their own licensing bodies and fees, so check yours before you budget. Company and partnership licences cost more than individual ones.

Registrations are small by comparison. An ABN is free. From 1 July 2026 a business name costs $47 for one year or $108 for three, and registering a proprietary company with ASIC costs $636, with a $342 yearly review fee, according to business.gov.au. GST registration is free and required once you reach $75,000 in GST turnover, which the ATO says you must do within 21 days.

Insurance is the line that varies most. Public liability is the baseline for most trades. Depending on your state and the work you do, you may also need contractor or home warranty cover, workers’ compensation if you hire, and cover for your tools and vehicle. Get written quotes from a broker for your actual trade, because the price differences between trades are large. We haven’t put a figure on it here because any single number would mislead you.

How much should you budget for the ute and tools?

This is usually the biggest one-off cost, and the one where borrowing makes the most sense, because the ute and tools last for years and earn the income that repays them.

• The vehicle. A reliable second-hand ute or van, plus rego, insurance, signage and a tool storage fit-out. Price the running costs too: fuel, tyres, servicing.
• The tool kit. Many tradies already own hand tools. The cost is in the power tools, testers, ladders, safety gear and trade-specific equipment you still need.
• The asset write-off. According to business.gov.au, the $20,000 instant asset write-off is permanent from 1 July 2026 for businesses with turnover under $10 million. That can speed up the tax benefit on tools and equipment, but it doesn’t reduce what you pay now. Vehicle limits can apply, so ask your accountant before you buy.

Coaching question: what do I need for the first three jobs, and what can wait until the work pays for it? Buying the full dream kit before you’ve invoiced anything is a classic way to start with less cash than you need.

What does your first month of admin cost?

Smaller amounts, but they add up:

• Quoting and invoicing software, and a bookkeeper or accountant for set-up advice
• A business phone plan and a basic website or Google profile
• Business cards, uniforms and vehicle signage
• Compliance paperwork, such as safety documents and licence renewals

If you employ anyone, the numbers change quickly. The National Minimum Wage is $26.44 an hour from 1 July 2026 (business.gov.au), and Payday Super means super is paid with each pay run instead of quarterly. That’s a bigger weekly cash demand than the old quarterly rhythm. Sole traders without employees aren’t affected by either.

Why is working capital the bucket that sinks new tradies?

Because trade work is paid in arrears. You buy materials, pay your own wages and fuel, finish the job, send the invoice, and then wait. How long depends on who’s paying.

In NSW, under the Security of Payment Act, payment is due 15 business days after a claim for a principal paying a head contractor, and 20 business days after a claim for a head contractor paying a subcontractor, unless the contract sets an earlier date. The NSW Government’s guidance on payment claims sets out how claims, payment schedules and deadlines work. Other states have their own time limits and rules, so check yours.

Now add the real-world delays: claims can only be made on certain dates, the builder’s paperwork can be slow, and a disputed claim can take longer. For budgeting purposes, four to eight weeks from finishing the work to cash in your account is a sensible planning assumption when you subcontract to builders. Residential clients who pay on completion can be much quicker.

That means your working capital bucket should cover:

• Materials and subcontractor costs you pay up front on each job
• Your insurance, vehicle and phone costs every month
• Your own living costs, because your rent or mortgage doesn’t wait for the builder
• A buffer for the job that goes wrong or the client who pays late

Our cash runway guide turns this into a number of weeks. Many new owners are surprised to find how short theirs is.

What do two illustrative tradie budgets look like?

These are examples to show the method, not quotes. Replace every line with your own prices.

Example A: a lean sole-trader electrician or plumber, working mostly for homeowners and small builders

Bucket	Illustrative amount
Licence, registrations and insurance (first year)	$3,000 to $6,000
Second-hand ute, signage and storage	$12,000 to $25,000
Tools and test equipment still to buy	$3,000 to $8,000
Software, phone, accountant set-up	$1,000 to $2,500
Working capital: 3 months of costs plus living expenses	$15,000 to $25,000
Rough total	$34,000 to $66,000

Example B: a small builder or carpenter hiring a first employee and working for developers

Bucket	Illustrative amount
Building licence, company set-up and insurance	$8,000 to $15,000
Ute, trailer and tools	$30,000 to $60,000
Systems, software and admin	$3,000 to $6,000
Working capital: wages, materials and 8 weeks of claim delays	$40,000 to $80,000
Rough total	$81,000 to $161,000

Notice where the money goes in Example B. The working capital line is as big as the vehicle and tools combined. That’s typical when you work on progress claims, and it’s why plenty of capable builders run out of cash with a full diary.

Should you fund it yourself, borrow or wait? A five-question self-test

Score one point for each “yes”:

1. Is the thing I’d borrow for an asset that earns or lasts, such as a ute or tools, rather than a loss I’d be funding?
2. Do I have at least three months of living costs and running costs in savings, separate from the purchase?
3. Do I have signed work or a regular client lined up, not just good intentions?
4. Could I make the repayments in my slowest month, using the numbers from my cash runway?
5. Have I priced the gap between finishing a job and getting paid, based on who my clients will be?

• 4 to 5: ready to look at options. Borrowing for the ute and tools can make sense, and you may be ready to explore funding for working capital too.
• 2 to 3: nearly there. Fill the gaps first, particularly savings and signed work, then revisit.
• 0 to 1: not yet. Build the runway, line up work and run the numbers again. Waiting two or three months is cheaper than starting short.

Being honest about the score is the whole point. Lenders look at the same things, and a clear plan makes any conversation easier.

What funding options exist for a new trade business?

New tradies often find the bank wants trading history they don’t yet have. That’s normal, and there are routes:

• Equipment-style funding for the ute and tools. Our page on funding equipment or a vehicle explains how it usually works.
• Unsecured business loans are typically sized on turnover and bank statements, so they tend to suit businesses that have been trading a while. See our unsecured loans page.
• Property-secured business loans, from $20,000 to $5,000,000, can work for newer businesses because the property carries weight that trading history can’t. They also put the property at risk, so they deserve a clear repayment plan.
• Saving first. For some, a short wait to build working capital is the right move.

Our trades and construction page shows how these fit the way jobs get paid. If you’d like a view of where you stand now, check your options with a short enquiry. There’s no credit check when you first enquire.

Ready to go out on your own? Let’s see what fits

Going out on your own is one of the best bets a good tradie can make, and the tradies who last are the ones who priced the quiet weeks as carefully as the tools. You’ve now got the four buckets and a rough sense of your own gap.

If part of that gap is a ute, a tool kit or the working capital to carry the first few jobs, we’re happy to talk it through. The enquiry takes about 60 seconds, and asking doesn’t touch your credit file. We don’t send your details to a pile of lenders, so your phone won’t light up with strangers. A real person reads your answers, looks at your situation and rings you.

One request: please fill the form in accurately, including what the money is for and roughly how much you need, so we can match you with the right option first time. If you’d rather work through your numbers first, the 2-minute funding profile will show your likely options.

See if you qualify →