Professional advice vital for new businesses
Starting a business can be full of pitfalls for the uninitiated. Lots of small businesses fail within the first few years, often because of easily avoidable mistakes.
While the perfect formula may not exist, there are certain steps you can take, advice to follow and tips to heed.
Setting your business up incorrectly can be costly, not only from a monetary point of you but also from a risk point of view.
James Swaney
Timaru accounting firm Sidekick
The power of advice from professionals is invaluable in helping you understand the legalities that come with opening a business. From forming a legal structure to setting up an accounting system, you must adhere to regulations, take care of taxes and follow employment laws. If you fail to follow government regulations, you could face steep penalties.
The importance of seeking professional advice before buying into a business or starting up a new business is to ensure the business and structure is set up correctly from day one.
‘‘Setting your business up incorrectly can be costly, not only from a monetary point of you but also from a risk point of view,’’ says James Swaney of Timaru accounting firm Sidekick. ‘‘The big picture should be thought about and these key questions should be answered: Do you have a plan and budget in place? What are your short term and long term goals/business objectives? What are your time frames and key drivers for the business? What systems and assets will you need to utilise? What are the five key factors in order to grow your business?’’
Most businesses in New Zealand are sole traders, companies, or partnerships. As a sole trader, the business is part of your personal finances. You’re responsible for all income and losses. A company, on the other hand, means your business is a separate legal entity with one or more owners. Losses are not usually held against the owners. And a partnership is where you and your business partners share the personal responsibility for income, losses and control of the business.
Other options are available, and if you’re thinking about using one, seek professional advice.
Getting a business off the ground is a process involving lots of small decisions that move you systematically through each stage with a cool head. From planning and getting set up, to funding and finance, take it step by step.
The Ministry of Business Innovation and Employment’s website, www.mbie.govt.nz, provides advice and support to help businesses get started, grow, innovate and raise their capability.
Business.govt.nz is the government’s online resource to make it easier for businesses to succeed. Designed with small businesses in mind, it brings together tools and resources from across the public and private sectors.