It’s something you’ve always imagined. Being your own boss, making the decisions, being the person who is in-charge of saying yes, but more often, saying no! But’s it’s more than that, it means allowing yourself to be more creative, to put your ideas in front of clients and make a difference. Finally, it’s also getting the right balance between personal and professional …well, better than it is now!
Everyone has thought about starting their own business at one point in their career. Furthermore, most people have also thought about what it is they want to do, probably done some initial scoping and most definitely, imagined what the name/logo will be. But, there are a few other things worth noting before plunging in:
1. Do a Proper Budget
The majority of all business only breakeven after year 2, and start making a minimal profit in year 3. So before you quit that full time job, put together a simple but proper budget that spans from Year 0 to Year 3. List all expenses – split between absolute and discretionary. Be as specific as you can with the type of expenses – using your credit card/bank card statements can really assist in identifying main items. When doing the budget, remember you’re not going to be a monk living up on a mountain – be realistic; particularly at the start-up phase your own business, doing things you enjoy will be a motivator and will help on those days when you feel like you are going nowhere! Use round numbers and estimate. Remember a budget is a living document – you update as you know more. (Note: If you require a template, send me a request via www.bizsync.co.nz/contact). Then, look at what dollars you have to support the absolute expenses and a portion of those discretionary items. Once you’ve done this, (again, it doesn’t have to be perfect), it will give you an idea on what your next steps can be.
2. Stay Put, Part-time or Full Throttle?
The budget will allow you to understand what your options are. You may need to save a lot more before you can go into business. Don’t be disappointed if this is the answer at this point. It can give you a great opportunity to have the conversation with your manager on what you want more training on or types of projects you want to work. A second option may be changing your type of employment – contracting and part-time options will allow you a fixed income and at the same time, gives you the option of working on the business (note: ensure you check the IRD website as there are different tax rates that can apply!). Finally, the last option is going into the business full time! You feel secure that your savings will give you the opportunity to develop and grow your own business. With all these options, there are pros and cons, so take time on this part and don’t get disillusioned, as this gives you a reality check as opposed to vague dreams.
3. Administration
The next step is to get onto the NZ Companies office website and ensure the company name is not taken. Furthermore, it is definitely a must these days to ensure the domain name can be registered. Finally, in this very brand focussed market, you should also look into trademark registration. In NZ, it’s relatively simple and congratulations to NZ Companies office for making this a simple one-step process. The website is https://www.business.govt.nz/companies/onecheck and gives simple instructions on the steps required. You can also follow the links to the different sites to set up, including IRD requirements. (Note: Setting yourself as a company does provide protection but there are administrative requirements so check with your accountant to ensure it is the best structure for you.)
4. Support
Going into business is fantastic. However, it takes time to realise the vision. Customers don’t pay. Suppliers are late. You may have a great idea but the market may not be ready. And these are only some of the issues. So ensure you have support. Whether this is family or friends, ensure you have people in your life that you can talk to, that can keep you motivated and remind you why you wanted to do this. As important as it is to have people as your personal advocates, I would strongly recommend that you sign up with a professional mentor. Now, you may know someone, which is great. If not, www.businessmentors.org.nz offers professional mentoring and is supported by the public sector. A mentor can guide you and provide his/her own personal experience in developing a business, and the really good ones, make you accountable for decisions.
5. Networking
This is the bit that is slightly tough, hence I’ve left it to last. You need to get out there and meet with potential clients as part of your business set-up. This is just another opportunity to gather information, particularly what potential gaps there are in the market and how you can align your vision/values to what the market needs. Get in contact with your old bosses, tax/accounting advisors and lawyers. If you’re part of a professional network, go to those training events and alumni meetings. And how do you network? You practice! Every opportunity you get, ensure that you are LISTENING and extracting 5 pieces of information – information can be a name, position, organisation, etc. You’d be surprised how quickly you start to build a database of information that will become useful. A lot of professional organisations do offer networking courses, but my personal opinion, is that every time you talk to someone, if you are listening for new information, that’s networking! And the good news is, the more often you do it, the more natural it will feel.
Starting your own business is an exhilarating experience – it’s you saying to the world, here’s something I can do that is unique and I believe it makes a difference. However, like anything in life, and certainly in business, you need to take a step back, evaluate and gather as much information as you can so you are prepared! The points above give you some guidelines. If you need any more information, please message me via www.bizsync.co.nz/contact. Best of luck!
Prenelle is a fully qualified CA and lawyer. She has held senior finance roles with global and local companies over the last 15 years. She is currently a Director of BizSync Limited, a consulting company that strives to start businesses on the right foundations.