New Zealand tops global rankings for ease of doing business. Photo / 123RF
Starting a business - as many people on the path of self-employment will tell you - is no easy feat, though by international standards, New Zealand may be the best place to start.
Aotearoa ranks number one on the global list for ease of doing business, ahead of Singapore and Denmark, according to a 2019 World Bank report that compares business regulation, ease of registering property, securing credit, trading across borders, tax and support available in 190 economies.
READ MORE:
• Small Business: Craft movement spills into dried meats
• Government approves $5m fund to help small businesses in Whakatane following Whakaari / White Island eruption
• Government introduces a tax incentive scheme for small business
• Big role for small firms in mental health
Before you get started in business, you'll need to decide if you are going to be a company, sole trader or work in partnership. If a company, you'll need to register with the Companies Office. Then you'll need to set up a business bank account - one each for trading and tax savings, register for GST and arrange insurance cover in case of unfavourable circumstances.
The Herald shares advice from business owners profiled last year, and industry leaders, to see what pearls of wisdom and lessons they have learnt along the way.
Auckland Chamber of Commerce chief executive Michael Barnett says business owners should know why they are getting into business - it will make it easier in the long run.
"Be very clear on the why, the what and the how," says Barnett.
"Why are you going to be in business? You need to be abundantly clear about why you're doing what you are doing. Once you understand that, then stick to it."
Barnett says knowing exactly why you are doing something and the motivations for it makes "the what" become apparent. He says it is important to also put your own personality or spin on the venture.
Do your research - lots of it, industry figures say - and then write up a detailed business plan. You'll need this if you require capital from the banks, and having a document to refer to will help you stay on track.
Barnett says those new to business need to convert the plan into achievable outcomes to measure progress. "Be really focused on that: be disciplined and use it to measure regularly and manage any change."
Legal adviser turned business owner Marica Frost says "doing your homework" can be the difference between a business that succeeds or fails.
"Research as much as you can before you actually start building a product or building a business, and talk to your future customer as much as you can and figure out what they want," says Frost, who runs wedding planning directory, The Curator.
Carl Edwards, co-owner of barbecue business The Big Smoke says a good idea does not necessarily translate into a great business: "You really need to research what you plan to do, what the market is for it and how many other people are doing the same thing."
Beany chief executive Sue de Bievre says it is important that new business owners or those starting out should "know their numbers".
"Have a really good understanding of what it is that you want to achieve, and that can be as little as 'I want to have 10 customers in the first 12 months' or it could be preparing a proper cashflow and thinking about what that looks like," says de Bievre. "Have some kind of visibility on what it is you want to achieve, even in the first three months."
A business plan should outline the idea and purpose of the business, who are its customers, how many customers there are and how the business will reach them, and how much it is going to charge them.
Test the idea and field for market feedback. You can conduct some research online, but de Bievre says there is no substitute for getting out and talking to people.
"Ask them: 'Would you buy this?' and 'What would you pay?' - do your market research, but do it yourself. Talk to as many people as possible, and then have a look what your competition is doing."
Make sure you as the business owner understands your cashflow forecast, she says. "If you've got a chartered accountant to build you a beautiful forecast, but you've never used it because it never really made sense to you then that's not helpful - it needs to be made to whatever level you feel comfortable at."
Those starting out in business should also know how many other businesses are operating the same, or a similar, business, says de Bievre.
Not only will it enable you to create your own niche or unique product, it will also give you a sense of what to expect from competition and the trading environment you want to operate in.
Neil Lan, co-founder of one of the country's newest confectionery companies, Littos, advises that newbies to the business world identify a problem in the market and figure out solutions and centre the business around that to ensure it is viable.
"Executing the solution is the hardest part as you may also have competitors that have answers, too," says Lan.
Think outside the box, and about what you can do to bring something different or quirky to the market to differentiate yourself from others already in the market.
You've secured capital to start up your venture, and you're ready to go, but be prepared to potentially triple the investment you think you need to get started as it often costs a lot more than what was originally planned, warns Simon Hetherington, founder of subscription underwear company Wears.
Hetherington says those getting into business should also be prepared for "a lot of setbacks before you can even get the business live" and to be open to learning as the business progresses.
"What we've learnt in the last year-and-a-half is almost tenfold in working for another company," he told the Herald in August.
"If you are going to start from scratch or a zero base, you need to have your plan and understand the costs [associated with starting the business], says Barnett.
Barnett is a strong believer in having a mentor; someone to guide, help and bounce new ideas off. "Everybody should have a mentor, and preferably someone who isn't a mate. Someone who is objective and can bring some skills to the table that you don't have."
Make time to meet with your mentor regularly to discuss any issues that arise and ways to improve operations, says Barnett.
Being a small business owner or sole trader can be a lonely place to be. Having a mentor will help alleviate the load and give you perspective.
Don't run your business alone, Pavan Vyas, chief executive of technology company Rush, says: "Smart people out there can help by bringing more to the business. The more smart people you have in leadership positions, earlier, the better."
Being in business doesn't mean you have all the answers. Identify early on what you're good at, and what you're not, and take on staff or seek help to take care of the parts that you are not.
Don't try to do it all on your own. "Before you get into business, do a little bit of a strengths and weaknesses list.
"Take the time to sit down and think 'What am I good at and what am I bad at', that bit where you are bad; don't despair, just go and find somebody who has those skills for you," says de Bievre. "I see this all the time in business where somebody is an ace salesperson and really knows the market and then for the life of them are terrible with numbers, and become unstuck, or the other way round where they are super good at the cashflow forecast but have no idea how to sell.
"Whatever it is that you're good at - make sure you are doing that, and make sure you find a business partner or friend, employee or mentor, who is good at the other part and plug them into your business in the beginning."
Most people are willing to give away their advice - or help - at no cost, she says.
"If you ask people for help they are usually really generous with their time. When you're starting off in business, just ask for help and they will give it."
Technology has the ability to make life - and work - easier and streamline operations.
Research shows the more a company invests in technology, the more likely are your chances of success and making money.
De Bievre says those starting a business should invest heavily in technology, early on.
Starting a business will require a significant amount of your time and effort, and it can usually be like that for a lengthy amount of time. If you're not passionate about the idea or business you want to run, then there is no point in doing it.
"Find something that you really care about, if there's no purpose behind why you're doing it it's hard to continue long term," says Bart de Vries, founder of Wellington-based standing desk firm Limber.
Donielle Brooke, co-founder of online fashion business Designer Wardrobe, says the same: "You have to have a real passion for what you're creating and why you are doing it. With that, when there's hard times you know that you're working on it for your passion. Surround yourself with incredible people. I think it's important to know that you don't have to do it alone just because you founded it".
After all, often it is passion and love of what it is you're doing that gets you through the hard days, and when the financial return is not yet great.
The data show Rotorua has the highest proportion of burglaries in New Zealand.