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Starting a business in New Zealand? Ask yourself these 10 questions first.

Female business owner fleshing out her news business with post it notes on a glass wall

The idea of starting a business sounds exciting and appealing, but it certainly requires dedication and hard work. It is not uncommon for Kiwis to dream of being successful business owners, but few actually achieve that goal. This means you need to have the right information before you take any action. 

For all future business owners, here are 10 questions you should ask yourself before starting a business in New Zealand.

1. Why do I want to start a business in New Zealand?

The reason may seem obvious sometimes. You want to follow your passions; you want to achieve financial independence; you want to control when you work and how you work. However, starting a business is a leap of faith. You need to take risks and try something new. Don't wait around, start now if you think that sounds exciting.

Everyone has their own reasons. Start asking yourself these questions. This will help you to come up with your own reasons for starting a business. Write those reasons down and think about them again, until you find the deep true reason for starting a business. Once you have a clear idea, you can turn that into a long-term vision of why you want to start a business, you can move to the next question.

2. How will I fund my business?

Getting enough funds to get started is significant when it comes to starting a business. Without sufficient funds, you may not be able to build your business. The first step is to write down everything you need to buy to start your business. Consider if you want to buy into an existing business or start from beginning to build one. Think about if you need to build a website, rent an office space, whether to hire employees or contractors and more. 

 In order to get an estimate on how much money your initial investment is needed, we have an article on the costs of starting a business in New Zealand. Hopefully, you can have a basic idea of it.

After having a ballpark figure in mind, you can start to think about funding. There’re a number of ways to get fundings:

  • Bootstrapping, which means investing your own money in the business
  • Friends and family
  • Take advantage of government grants
  • Equity financing
  • Venture capital
  • Crowdfunding
  • Get a business loan 
  • Accelerator (or incubator) funding

If you are interested in NZ government grants and fundings, please read this article. Ultimately, you need to make a decision on which option suits you the best. 

3. Who are the competitors in my industry?

Knowing your competitors allows you to understand what they are offering in the market and what they aren't. In addition, it allows you to gain a better understanding of the market. Your competitors' products or services, pricing, and marketing strategies will be revealed through competitive analysis. Ultimately, this information you gather will help you develop a better product.

4. What makes my business different from others?

It’s important to understand and make sure your product or service has a unique selling point (USP) so you can stand out from the competition. It is the reason people should choose your products or services over your competitors'. Your website, flyers, advertisements, and other marketing materials should highlight the answer to this question.

It could be as simple as sourcing all raw materials ethically or offering a lower price. If you don’t already have an USP yet, you could identify your differentiators by doing some competitor research.

5. Who are my target audience?

Marketing to the right people is the core of a business. You should be asking yourself who your target audience is.

  • How old are they?
  • What’s their gender?
  • What’s their income level?
  • Where are they based?
  • What’s their needs? 
  • What problems are they trying to solve?
  • What is their hesitation when it comes to choose your products or services?
  • What is their lifestyle which fits with your products or services?

Knowing your target audience will enable you to convey the right message, offering the right products and services to the right people. Your products or services can’t meet everyone’s needs. You only need to find out who and where your potential customers are. For example, your idea of setting up a rental car business in Queenstown for families who need SUVs is more likely to come true, rather than thinking of opening a rental car business across NZ.  Finding a niche market and concentrating on it is the key to success. 

6. How can I price my product or service?

Pricing your product or service can be tricky as you don’t want to be overpriced or set your price too low. Correct pricing has a direct impact on sales and incorrect pricing may lead your business to failure. 

Competitor research comes in handy when determining your pricing. What are your competitors offering? What’s included in their packages? Do they charge extra for additional services such as shipping? You’ll also want to take costs into account such as postage, production, the softwares you need, marketing, when leaving room for profits.

While different pricing strategies can apply, you need to figure out what suits your industry. It is always good to check your pricing with a bench mark for the industry provided by the IRD. 

7. What are the legal requirements for starting a business in New Zealand?

Before starting a business, you need to ensure that you understand all the legislations, so that you won’t be able to get caught off guard or breaching laws. The common legal requirements for starting a businesses in New Zealand are:

  • Choose a business structure for your business to operate under
  • Register your business name
  • Apply for New Zealand Business Number (NZBN)
  • Get the professional licenses and business permits
  • Insure your business
  • Abide laws when employing people 
  • Intellectual property

It’s essential to seek professional advice from experienced lawyers (e.g., Legal Vision)  in order to guide you through all the requirements for starting a business or funding a startup.

8. What are my tax obligations?

Business owners have an important and challenging responsibility: staying on top of their tax obligations. It's crucial to understand what your responsibilities are as a business owner, even though most owners seek the advice of professionals.

In general, tax obligations depend on your business structure, type of business, and whether you have employees.

Here's a quick overview of what you need to know as a business owner:

  • New Zealand Business Number (NZBN)
  • IRD Number
  • Goods and Services Tax (GST)
  • PAYE
  • Superannuation
  • Payroll tax and Payday filing
  • Reporting tax
  • Keep good accounting records
  • Paying tax

9. Do I have the right advisors?

Getting as much advice as possible before you start your business is key. You can choose to pay for professional advisors such as accountants and lawyers, or you can just talk to people you know in your network to validate your business ideas. In order to make good business decisions, or even to challenge your assumptions and blind spots, you should get a wide range of advice. When it comes to starting a business, there is nothing you can do if you do not know what you don't know unless you consult with your advisors, no matter if they are professionals or friends or family.

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10. Do I have system in place?

You can easily get cloud-based softwares to make your business process more efficient. For example, CRM systems (e.g., Hubspot, Keap) can help to stay in touch with your prospects and customers; project management tools (e.g., Asana) can help you to track the progress of the projects you’re working on; accounting softwares (e.g., Xero) can help you with bookkeeping, record keeping and generating key financial reports and much more. 

A stack of software for your business may cost you upfront, but it will streamline mundane administrative tasks and improve business operations.

Who are Beany? 

We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant world. ​

We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.

Tori as a dog

Tori Ma

Performance marketer

Performance marketer at Beany, and into true crime documentaries.

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