So you want to start your own business......

[Beachcombers]

This is now my third year of trading and it has been a huge rollercoaster ride of a learning curve, but I am still here and actually starting to make some money!

For anyone thinking of wanting to start their own business, I would say it has been one of the most fulfilling things I have ever done and I am a vey proud of what I have achieved. And if anyone is interested I can offer the following insights.

Where to start?

Go see an accountant! - This relationship is pretty important, make sure you get on with your accountant, that they understand what you are hoping to achieve. They will advise how to set up your business (ie partnership, sole trader, limited company) I "interviewed" four accountants before I settled on the one I liked best. For dealing with the IRD and working for families, for us they have been invaluable.

Register your company - If the accountant does not think you are mad and you are ready to take the plunge go online and get your company registered here http://www.business.govt.nz/companies

Open a bank account - I hate my bank, do not make the mistake I did and open a business account with a bank, just because you are used to using them for your personal stuff! Interview banks, just like the accountant, find out what THEY can do for YOU. I have since opened another business and opened an account with another bank, there is a huge difference between the level of personal service you will receive as well as business banking tools.

Paperwork - Arrggh, I hate paperwork and it's really important to keep everything in good order. Put simply, you need to be able to show a paper trail for everything that happens in your business bank account. Obvious things include payments to you (your invoices) and payments to suppliers (their invoices). But I also have to manage GST, IRD, foreign exchange, duty, expenses, customs and excise....... The more simple you can make it, the "easier" it will be, especially for your accountant, when they do your yearly financial statement.

Do not dispair! - The first year was undoubtedly the hardest and there will be moments when you doubt what you have got yourself and your family into. You have to have faith and go the extra mile.

Customer service - NZ companies really suck at this, make sure you do not and you have won half the battle.

Good luck!

[NikT]

Great advice there.

We're just starting out on our adventure, although I've spent countless sleepless nights number crunching and fretting.
(for the last 12 months, since I had the lightbulb moment!)

Passion is half the battle won.

Nick..

[Mamee & Co]

If you enjoy what you do, it is your passion, then you will never work another day in your life.

As an accountant I would reiterate the paperwork comment....and the plus is, if it is organized and reconciled, you will reduce your fees.

[wolfysmith]

Fantastic to have a business section on the forum. Great advise, we are going down the business route, medicals are booked for Jan 10 so your advise is fabulous

[Sun777]

Excellent post Beachcombers

[nativecolo]

Can you pl explain the bit about not haing business account with the same bank ?

[jambo]

Strange, I would have reckoned you'd get the business going first. Then get an accountant if you make SERIOUS money. Any reason for getting an accountant first?

[Sun777]

Strange, I would have reckoned you'd get the business going first. Then get an accountant if you make SERIOUS money. Any reason for getting an accountant first?

One of my colleague that works as individual contractor opened his business and had accountant at the same time - he said its better to do this way.

[Beachcombers]

Can you pl explain the bit about not haing business account with the same bank ?

When we first arrived in NZ, we opened an account with the first bank that was nearest to our hostel. Flash forward nearly eight years and we are still with the same bank, mortgage, loans credit cards etc. So when I started my first business, it was a logical progression to open a business account with the same bank.

What I learned, is that a business bank account, often requires a lot of communication with the bank and the tools I need are different to personal banking. I have on occasion had to transfer over $50,000 for example to pay a supplier. You think that would be easy with my bank, but no I have to go through my "personal business manager", who never returns my calls or can take 48hrs to reply to emails. Very frustrating. Then there is foreign exchange and the rip off exchange rates, interent banking that only allows me to transfer $25K on one day. Bank statements that only go back 90 days.......

When I started my second business, I shopped around, as I already had a something to compare against. And there is a big difference between them! One bank I had a meeting with, I got ushered into a room with a video link to a business manager in Auckland. I settled for a bank that had a local business manager and would allow me to transfer whatever I wanted.

Hope that makes sense!

[Beachcombers]

Strange, I would have reckoned you'd get the business going first. Then get an accountant if you make SERIOUS money. Any reason for getting an accountant first?

An accountant is there to complete your financial statement for the years trading, something you could do yourself, depending on the type of business and turnover you are doing. What the accountant is really good at doing is minimising the amount of tax you are liable for, helping me run a vehcile under the company, dealing with working for families tax credits and generally being the buffer between me and the taxman.