Thinking of setting up a business? by Roslyn Morshead, of Rotorua’s Morshead Law ros@morsheadlaw.co.nz

The way we do business in New Zealand is constantly changing and evolving, and if you are thinking of taking the plunge and setting up your own business, you really can do it all right here in Rotorua. Setting up your dream business is not as hard as you might think, but it’s important to start at the beginning.

First, take baby steps and enroll in a business and/or computing course. You might think it’s not that hard to run a business or you already know what to do, but in today’s fast-moving and ever-changing business environment you need to make sure you DO know – and can keep up! Importantly, you don’t need to leave Rotorua to upskill as there are numerous course opportunities easily accessible right here on our doorstep. Some are free, some you can do via correspondence at home, some long, some short, ‘incubation’ type courses, and yet others you can attend classes.

Second, start work on your business plan. This is an important document and might take longer to put together than you think. Working through a business plan will really help you nut out tin tacks, and possibly even raise issues you hadn’t even considered. There are a number of ways you can get started, including helpful information and business templates from some Bank websites (who also run free business seminars), Government website for small business (business.govt.nz), and you can Google other online sources.

Third, talk to a local commercial lawyer and accountant about your plans. These aspects might include incorporating a limited liability company and its structure, taxation obligations, GST, funding, employer obligations, contracts if you’re buying an existing business, regulatory and compliance issues, whether you should put your family home in a Trust, possibly mortgaging your home to raise start-up capital, entering into a formal premises lease and for how long, shareholder agreement, hiring employees, IPONZ trademark registration to protect the intellectual property in your idea.

Fourth, plan the transition from employee to start-up business-owner. Your business plan should have identified your capital needs, suppliers, target market and demographic, budget and expenses, cash-flow forecast, marketing funnel, goals and so on. It will also help you work out things like how many customers you need at $xyz per sale to reach break-even point and hopefully make a profit. Further, getting the word out (as cheaply as possible!) and achieving customers and sales in the pipeline takes time, so it might be worth considering setting up and starting your new venture part-time outside of your normal job hours to see how it unfolds.

Fifth, protect yourself, your business and assets. Make sure you have talked to an insurance broker about appropriate public liability insurance, income/medical protection insurance; that you have some savings put aside if possible, IPONZ registration, getting your company incorporated and protecting your family home.

 

Sixth. Don’t just jump in the deep end and quit your job before you’ve tested the market and know the new business is going to be viable and profitable. It’s a big step going from a regular income to not knowing when your next pay-check will be, and many businesses fail within the first two years. But taking steps toward being self-employed is very rewarding, even though you’ll probably work harder than you did when employed!