Thinking about starting your own business?

Starting a business can feel intimidating, but the good news is that you don’t need an MBA or years of experience. This guide from JumpStarter is for New Zealanders eager to embark on their entrepreneurial journey.

From validating your idea to navigating legal requirements, here’s a breakdown of essential steps to turning dreams into actions:

Assessing your business idea

First, ensure your business idea has merit. You wouldn’t want to invest time and money into something that doesn’t resonate. Consider these actions:

• Talk it out: Get feedback from friends and family.
• Research the competition: Analyse similar businesses — what works, where they fall short, and how you can differentiate.
• Run a trial: Test your concept locally or with friends.

Many successful businesses start by refining existing concepts or finding unique niches.

Crafting a simple business plan

Once you’ve validated your idea, map out a straightforward business plan.

Here’s a simple structure:

1. Define the vision: Write a brief overview of what your business will do and the problem it will solve.
2. Set long-term goals: Where do you envision your business in five years?
3. Identify unique selling points: What sets your business apart from competitors?
4. Set short-term goals: Outline concrete targets for the first year, like sales figures.
5. Analyse your competition: Learn from their successes and shortcomings.
6. Financial projections: Estimate your income and expenses.

Pro Tip: Keep it simple — focus on these key points for clarity and direction.

Choosing your business structure

Selecting the right business structure is a critical early decision affecting your taxes, liability, and growth potential. Here are three main options:

1. Sole trader: The simplest structure — you operate under your own name, keep all profits, and bear all losses.
2. Company: A separate legal entity offering personal asset protection. It’s more complex and costly but beneficial for growth or riskier ventures.
3. Partnership: If you’re starting a business with someone else, this option allows you to share responsibilities and profits. Clear agreements are essential to avoid potential disputes.

For many new entrepreneurs, starting as a sole trader is easiest, with the option to transition later, typically to a company.

Pro Tip: Open a separate bank account for your business to simplify your finances come tax time.

Choosing a business name

Choosing the right name for your business is a big decision — it’s important to get it right! Here are some considerations:

• Simplicity: Short, catchy names are easier to remember.
• Relevance: Make sure the name reflects your business.
• Availability: Check if your chosen name is available through the Companies Office and Trade Marks Register.
• Domain name: It’s crucial for your online identity, so check if your business name is available as a .nz or .co.nz domain.
• Avoid controversy. Choose a name that resonates positively.

Pro Tip: Secure both domain name options, if possible, to protect your online brand.

Navigating legal requirements

Starting a business in New Zealand involves several legal steps. Here are the basics:

1. IRD number: Sole traders can use their personal IRD number, while companies need a separate one.
2. GST registration: Register for GST if you expect to exceed $60,000 in sales annually.
3. ACC cover: As a business owner, you’ll automatically be covered by ACC based on your income.
4. Licenses and permits: Check business.govt.nz for industry-specific requirements.
5. Employment agreements: Ensure compliant written agreements if you hire staff.

Pro Tip: Use resources from the IRD and business.govt.nz with your legal setup.

Managing finances

Money is often a concern for new business owners. Here are some funding options:

• Bootstrapping: Use your own savings to start, as many small businesses do.
• Friends and family: They can be a great support but formalize agreements to prevent misunderstandings.
• Bank loans: With a solid plan, banks may offer loans.
• Crowdfunding: Platforms like PledgeMe can be great for raising funds from the public for unique products.

Pro Tip: Start small and scale as you grow.

Choosing a location

Your business’ location depends on your business type. If you’re a tradesperson, your vehicle might serve as your office. Consider these factors if you need a physical space:

• Affordability: Can you afford rent, or are shared spaces available?
• Accessibility: Is the location easy for customers to find?
• Nearby businesses: Having other businesses around can help drive foot traffic.
• Growth potential: Is there room for expansion if your business grows?

Pro Tip: For tradespeople, renting a small storage unit for tools can be more cost-effective than a full workshop.

Building your team

Initially, your team may just be you. But as your business grows, you might need to expand your workforce:

• Employees: They provide consistency but come with added responsibilities.
• Contractors: They offer flexibility for specific tasks.
• Virtual assistants: They can help with administrative tasks remotely.

Pro Tip: Create a task list to identify the right type of assistance.

Marketing your business on a budget

Attracting customers is key once your business is operational. Consider these budget-friendly strategies:

1. Create a simple website: Outlining your services and contact details.
2. Utilize social media: Engage customers through social media platforms.
3. Network locally: Join business groups and connect with other entrepreneurs.
4. Request referrals: Encourage satisfied customers to spread the word.
5. Business cards: Traditional but effective for networking!

Pro Tip: Balance your online presence with a website and social media to drive engagement.

Growing your business

Once your business is established, focus on growth:

• Listen to customers: Identify their needs and adapt.
• Monitor your finances: Ensure you’re on track for profitability, refresh your forecasts every month!
• Seek efficiencies: Find ways to streamline operations and reduce costs.
• Expand offerings: Consider complementary products or services.
• Build partnerships: Collaborate with other businesses to expand your reach.

Pro Tip: Schedule monthly reviews of your business to assess progress and identify areas for improvement.

Starting a business is no small feat, but it’s a rewarding venture. With each step, you’ll get closer to turning your dream into reality. It’s normal to feel overwhelmed, so take breaks and seek help when needed.

Insights from the team at JumpStarter

View this story in full via NZ Entrepreneur Magazine website:

https://nzentrepreneur.co.nz/thinking-about-starting-your-own-business/