If you want to know how to start a business, this article will certainly help. The World Bank recently ranked New Zealand as the easiest place in the world to start a new business. It also ranked us in top spot, compared to 189 others, for ease of doing business.
Have you decided to start your own business but don’t know where to start? Setting it up requires more than idea. But don’t worry, this article will share a few tips on how to start a business in New Zealand.
Identify what problems or frustrations you business concept or idea will solve. Identify your target market demographics (location, age-groups, needs, etc) and investigate what your potential competition is doing.
Use your analysis to help develop your business plan.
Register Business Name
Choose a business name, check for trademarks and secure your website domain and hosting. Check the name you want to use isn’t already being used with this free tool.
Always Seek Professional Advice
Like building a house, laying the right foundations for your new business will be critical. Obtain advice on which business structure will best suit your needs.
Companies, trusts, sole-traders and partnerships all have the advantages and disadvantages. Look into regulations – know what you need to comply with. This could be anything from food preparation regulations to health and safety in the workplace.
Determine which key legislation you’ll need to comply with. Your chartered accountant will explain income tax, payroll and company legislation.
Implement Good Financial Disciplines
It’s essential that you maintain proper accounting records. Not only is it a legal requirement but good business practice.
You will probably need to prepare tax returns and financial statements. Do you know how to prepare them or which reporting formats to use?
Will you need to submit payroll records and GST returns, and if so, when and how? Tax penalties can be severe if you don’t submit returns on time.
Prepare cash-flow forecasts and a business plan – especially if you’re going to seek funding. Make sure you a have a well documented business plan which clearly sets out your goals and how you’ll achieve them. A good business advisory services specialist should be able to assist you with this.
Register for GST
If you estimate that your sales will exceed $60,000 in the first twelve months, you’ll need to register for GST. GST can be complex and managing it is likely to be time-consuming. Do you have the skills and experience to manage it?
Consider the benefits of outsourcing it to a professional and cost-effective virtual accounting service provider. Many of these companies’ fees are less than half of what you’d pay in New Zealand.
Ministry of Business, Innovation & Employment
You can find many practical and interactive tools at the Ministry of Business, Innovation & Employment (MBIE)’s website.
Tools include a short quiz to help test how well you know which expenses can be claimed for business purposes. It also contains guidelines to help you evaluate whether your business concept is viable.
Prepare Cash Flow Forecasts
You’ve probably heard the expression that “cash is king” in business. This is especially important for any new business.
To maintain a sustainable business, you’ll need to ensure your business can continue to fund its expenses They can arise from many sources. You’ll inevitably have one-off start-up expenses, such as a deposit on premises, or paying a web-designer.
You’ll have fixed and variable expenses. Typically, fixed expenses will need to be paid, regardless of how busy your business is, such as wages, rent, etc. Variable expenses, such as stock, utility bills, printing, etc, will vary from month to month.
You may not have any guaranteed or regular income at the start or an established credit history. You may need to fund your business from your savings, family or bank loans, or even credit cards.
It’s critical that you forecast your cash receipts and expenses. Although, it’s quick and easy to set up a new business in New Zealand, approximately only one in three business survive the first five years.
Don’t Be Put Off About Starting a New Business
Our list isn’t designed to scare you off starting a business. Quite the opposite. We love working with entrepreneurs keen to exploit New Zealand business opportunities.
We acknowledge that you may not be fully prepared yet. As chartered accountants and business advisors, we’re here to guide you.
Work with us to ensure your business is set up correctly from the outset. You’ll have the right foundations to concentrate on growing your business, safe in the knowledge that it’s our job to help you succeed.
Contact Business Advisory Services to show you how to start a business in New Zealand.