The advances in technology, namely fintech, have spurred an increase in startups around the world. These startups not only put an entrepreneur on the map, but also the city he or she is based in. With some cities, the startups have given them a new identity. There are even cities that have also become hubs for technology. The creation of a startup has many benefits for a city, such as an increase in employment opportunities, tourism and talent. One of these cities that has become a startup hub is Melbourne.
What makes a city a startup hub? An influx of new companies that creates a healthy entrepreneurial ecosystem. The city ensures its sustainability in the global marketplace through the entrepreneurial ecosystem. There are many parts to a healthy entrepreneurial ecosystem. Some of these parts include accelerators, talent, culture, infrastructure and capital. There are other factors that make a city attractive for startups, such as the level of venture capital fundraising, the number of government incentives and the number of significant exits. There is usually one sector that creates the most startups. For Melbourne, it’s the tech sector. It has achieved monumental growth over the past five years, employing 85,000 people and has generated A$35 billion annually, and is expected to reach A$50.8 billion by 2020. Thus, Melbourne was designated as the “technological capital of Australia.” Tech startups primarily focus on four areas: web services and apps, SAAS (software as a service), e-commerce and IT and software. While having an innovative product is key to creating a startup, keeping it sustainable is also important. This means creating a solid infrastructure.
Just like an entrepreneurial ecosystem, a startup’s infrastructure has a number of parts. This includes everything from accounting and human resources to marketing and taxes. Taxes need the most consideration because if the company is not set up correctly, there will be numerous headaches at tax time. When reporting your taxes, you need to know your business activity statement and income tax return, especially entering into the pay-as-you-go instalment system. Understanding these reports will make running your startup much easier. Also, getting software to manage your business will help you stay on top of invoices, expenses, cash flow … etc.
Melbourne is enjoying its new identity as a startup hub. These new companies not only put Melbourne on the map, but also strengthened its economy and position in the global marketplace. I have no doubt that Melbourne will continue to produce innovative products and services.