5 steps to establishing your small business

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Confirm the viability of your business idea

Small businesses and startups often are based on creative, disruptive ideas. However, not all ideas may work or are feasible. To confirm and your small business idea’s feasibility, you can consult a business advisor, an established entrepreneur or a financial expert who can give an honest opinion or feedback on your business idea. There is a wide range of resources available for those looking to start a small business NZ that include:

  • business.govt.nz
  • Regional business partner network
  • Ministry of Business, Innovation and Employment
  • Employment NZ
  • Worksafe
  • Ministry for Primary Industries
  • ACC
  • Inland Revenue
  • Stats NZ
  • Callaghan Innovation
  • BMNZ

Contacting Regional Business Partner Network’s local office may be the best way to get a wealth of advice that can help you move to the next stage of business planning.

Your local business advisors connect you to business networks, advisors and professionals who can support you in different aspects of your business. The regional business partner network also advises you on any government assistance that you are eligible for apart from giving you the tools and information you need to develop your skills and knowledge. To help a small business New Zealand has fourteen such regional partner network offices.

BMNZ or Business Mentors New Zealand is another agency that assists those who want to start a small business or have a business idea.These are experienced business people well versed in new ventures. They have the expertise and understanding of how you can validate your business idea and establish your small business. These mentors will work with you over six months to test the business idea, offer guidance. guide you through a feasibility assessment and help you create a strong business plan.

Determine the business structure and write a business plan

Once you test your business idea and confirm its feasibility, you can go on to deciding what the legal structure of your business will be. The options include sole proprietorship, limited company, franchising or partnership. Sole trader structure is the simplest set-up that also simplifies your tax and legal obligations. A limited company is one where your liabilities are defined in accordance with your initial investment. The upfront registration fee can be around $200 for limited companies. You will also need to handle the company taxes as well as your tax returns as an individual.

Your business plan needs to include the details of

  • business mission and goals
  • Competitor analysis
  • marketing strategy
  • Target customers
  • Funding sources
  • Projected expenses and income
  • Pricing strategy

Choose a business name and register the trademark

You may already have a few names in mind for your small business. You can also leverage onecheck tool to check the availability of your business name, website domain name, trademark and social media username.

Registering the trademark is important to safeguard your business name. The trademark that is accepted will be approved if no one objects to it within six months. The IPONZ or Intellectual Property Office of New Zealand is the agency that grants and registers patents, business name, trademarks, designs, patents and geographical indications. You can search and apply for company names on IPONZ site for less than $200. The names are instantly available and valid as long as you are running the business. Along with your company name, you can search for available domain names that match your business name and register for the same.

Understand compliance requirements

While there are no hassles of red tape or excessive compliance requirements in New Zealand, you will need to get familiar with the key legislation that pertains to your industry. These can include food preparation standards, Consumer Guarantees Act, Fair Trading Act, and employee rights. Compliance Matters provides all the information you need to find out what laws or regulations you need to comply with.

Know about GST

Any small business that sells goods over $60,000 has to register for GST. However, with GST registration you can claim GST-inclusive expenses. For instance, if you are planning to start a mobile catering business, you will need to buy cooking appliances, a food truck and packaging materials. All these have GST elements that you would pay for when purchasing them. By registering for GST, you can claim back these expenses.

If your business is unlikely to make $60,000, it may not make sense to register for GST. This will entail charging 15 per cent additional on your sales.

Conclusion

Irrespective of the industry or sector your small business is related to, guarding against some of the most common business risks with small business insurance is important. From damage to your client’s property, third-party injury, or illness as a result of your business activity to a defective product, the risks can be diverse. As small businesses operate on leaner margins, the legal costs of defending against these claims and meeting the compensation can be prohibitive. This can make the difference between your small business’s survival and failure. BizCover offers comprehensive insurance for small business that protects you against a wide range of risks, helping you stay prepared in case the unexpected happens.

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