I often get approached by people who want to start their own business and work for themselves. Sometimes it's mentioned casually in passing or wistfully referred to as one of those rainy day ideas. Other times, it's a serious conversation in the office. Staggeringly, an estimated 48% of employees aged 18-35 would go into business themselves tomorrow if they had the resources.
There are many things to consider and the pressure of getting it right can be overwhelming. There is oodles of information on the topic and you're not quite sure where to start. Everybody has an opinion but which one is right for you? The good news is it doesn't need to be a scary thing if you plan ahead.
The first thing to decide is what your business structure is going to be. This means are you going to operate as a company, partnership, trust or sole trader (an individual in business). Are you going to have business partners? Do you want your life partner to have a share in the earnings? Not only does this influence who manages the business but also who owns it because these can be two very different things. Depending on your business structure it opens up possibilities for asset protection, limiting liability and tax planning opportunities. Nothing is set in concrete once you start down your chosen path but it can be a lengthy and costly exercise to change tracks midway.
What is your business name going to be? There is the legal name and you may want a trading name. E.g. ABC Limited trading as Bay of Islands Finest Shoes.
If you are considering going into business with other people, who is going to own what portion? How are the profits (or to that matter losses) going to be split? Who is going to be the one(s) actually performing the work?
Right out of the gates there are decisions with lots of choices. Don't panic and hit the eject button just yet. Simply put = Get real advice. There are many influencing factors that will impact on the business structure decision. It comes down to what your personal circumstances are now and what you want them to be. If you ask Joe Bloggs down the road for his opinion, he doesn't necessarily know what your partner's income is, how old your kids are or that your Mum and Dad are going to be silent partners because they're lending you $10,000 start-up money. This and much much more should be considered as a complete picture. One size does not fit all.
I'm sure you have many more burning questions. Should I register for GST? When do I need an accountant? What type of records do I need to keep? When does the IRD get involved? How much tax will I have to pay? You get the idea.
We are running a monthly seminar that offers real information and advice about starting your own business. We take things back to the basics and build the foundations of business knowledge in a language that you'll understand. Anyone and everyone is welcome. Please see our website for more details. Seats are strictly limited so please ensure you register.