A complete guide to starting a business In New Zealand



1. Deciding your business name and why domain names will influence your decision.

2. Logo design & business cards – how you can get one next to no money

3. Website – web builders, web designers, modern day virtual web designers what is the best choice for you?

4. Facebook and Instagram - Checklist

5. Google my business

6. Taxation: Selecting the right tax structure for your business

7. Taxation: Do you need to be GST registered?

8. Taxation: income tax and due dates?

9. Taxation: Do I need to keep my receipts?

10. Do i really need a accounting program?

11. What businesses expenses can I claim?



2019 is here. Are you looking to start your own business?


As business owners and after working with hundreds of businesses around New Zealand we have created a list of all the tasks you will need to complete to get a business up and running. The below points are written with a limited budget in mind.



Deciding your business name and why domain names will influence your decision.


You may have a business name in mind. However your domain name is just as important.


A domain name is your web address. This is what your customers will most likely see first. Thus it is important to get the perfect domain name. By perfect we mean that if your business name is Value Guitars. You need to have your domain name as www.valueguitars.com or www.valueguitars.co.nz. Do not accept domain names such as www.valueguitars.net or valueguitars.club. For your main web address you want either .com or .co.nz if your domain name is not available for purchase then you will need to adjust your business name.


Customers will take your businesses more seriously if you have a .com or .co.nz web address. This is why your web address is an important as your business name.


So where can I check if my domain name is available and where can I buy the domain name I want?


Domain names need to be purchased from a domain seller. Domain names are usually leased and billed every year. there are two places we recommend you should purchase your domain names from.


There are two websites we recommend to purchase domain names


https://www.namecheap.com/ - Name Cheap is in the long run the cheapest option but this website has limited domains.


https://nz.godaddy.com/ - is the most reliable and you should be able to find any domain on here. However Go-daddy is more expensive.


Do not for your domain name is one of the first tools to reaching your customers. Spend time on this task and get it perfect.


Logo design & business cards – how you can get one next to no money


Your logo is the face of your business. Your logo does not need to look like as if its been done by a marketing company. Your logo should be unique. A symbol that can be easily recognized by your customers. A memorable logo is the most important aspect of any logo. We are not saying that a well designed logo is not important we are just saying focus on being memorable.


Your logo color is going to be very important. The colors you select will affect your website and all your marketing going forward. It will pay to spend time looking into what colors will suit your business best. Below is a handy chart to get you started



how colors are represented in logos

So how do you get a logo without any Photoshop or design skills?


If you are unable to design your own logo and do not want to pay a hefty amount we recommend Fiverr. Fiverr is a website full of professionals looking to do freelance work. You can get a logo designed for as little as $5. Be warned you get what you pay for. Read reviews and see the previous work of the individuals listed there. You should be able to get something decent for $50. You can apply this to your business card design as well. You can get both designs done for under $100.


Once you have your business cards done where can you print them?


If you are looking for a quality print we recommend using Officenow in Auckland CBD. They have great customer service and will ensure top quality for your business cards. A Set of 250 business cards will cost you about $100 on average.


If you are looking for a cheaper option we recommend Vista Print. Be warned that Vista Print does not have the best quality however you will get value for your money. A set of 250 business cards will cost you about $40 averagely.


Website – web builders, web designers, modern day virtual web designers what is the best choice for you?


One of the biggest decisions you will have to make is deciding how you will construct your website. In today's world there are a number of options you are not limited to hiring a professional web designers. below is a brief outline of all your options.


Web designers.


if you would like to be completely hands off. web designers are the best option for you. the web designer will take care of SEO, web hosting, functionality of the website and will be able to update the website for you. At most you will be involved with making some design decisions but this should be minimal. You will get a clean, functional, optimized website with little to no effort as long as you are willing to pay for it.


the problem with web designers is the price. A website can cost you any where from $4000 to $10,000. The more complicated your business is the more the price will sky rocket. You will also give up control of your website. If you want to update your website or correct any errors. Generally you will have to contact your Web Designer to get it done and off course you will need to pay them. As you can see this options lacks control and can easily spiral out of control in terms of price.


Using online web builders.


Web builders are housed in your web browser and use snap to place web design tools. This means that any one can build a website within minutes. No is skill required to use these tools. This will also means that any time you need to update or change your website you can do so without any cost and very quickly.


Off course this will be a paid service generally it will cost about $150 per year.


if you decide to go for a online web builder we recommend using Wordpress or Wix..


It will be extremely difficult to make your website look modern and aesthetically pleasing. Especially if you have no experience in building websites. You will also need to study SEO to make sure your website is optimized and will show up in search engines. If you have some design experience and are able to use Photoshop to a intermediate level then this option will be fine. If you do not have these two skills we would not recommend this option, rather we would recommend the third option below.


Virtual Web Designers


Virtual Web Designer use the online web builders. This saves them on spending time on coding the website or hiring a developer to do so. Saving them and you a significant amount of money. the advantage of a web designer is that you will get the best of both worlds a relatively affordable website which will look professional and the ability to make updates to your website without any further costs. You will have the choice of having the Web Designer continue to work with you or you can take over the maintenance of the website your self without prior experience.


If this is the option you would like to go for. We would recommend a young businesses called Biz Hatch. They provide a all encompassing package which includes logo design, business card design, social media set up and website design all for an incredible price of $990. Visit their website for more information www.bizhatch.co.nz



start a business with bizhatch

Facebook and Instagram - Checklist


Facebook.


Facebook allows businesses to create their own pages. Business pages function much like personal pages with minor differences. Below are the essentials you will need to complete to get your Facebook page up and running.


1. Cover image - this can also be a video

2. Profile image

3. Services

4. Contact us button - this is located just underneath your cover image. this button can be programmed to link to any page and the button does not necessarily need to say "contact us" it can be customized to any function you want it to be.

5. About section - this is where you phone number and your web address will be held.

6. "Our Story" description and image needed.


these 6 step will get your page to look professional.


below is a cheat sheet for the image dimensions Facebook requires for each section.


facebook, facebook business page cheat sheet

Instagram


Much like Facebook, Instagram also allows business pages. Instagram is the biggest social media platform in the world. This means it is essential for every business.


Hashtags are your key to reaching people on Instagram. without Hashtags its hard to attract attention. you are allowed to use a total of 30 tags per post. the more tags you use the more people will see you. It is not necessary to use all 30 tags but use all the tags that are related to your post.


we recommend using the following site to find your hashtags. if your are uploading a post about Facebook. you can simply type in "Facebook" into the search box and the website will show you the most liked hashtags that relate to Facebook.


http://best-hashtags.com/


below is another cheat sheet for Instagram image sizes.



Instagram cheat sheet showing picture sizes

Google my business


Google my business is a must have for any business owners. this will allow you to be on local listings. give you the ability to add your self onto a local map and will also allow you to create and share posts, much like Facebook.


You will need to go to the google my business landing page (https://www.google.com/intl/en_nz/business/), create an account then you will need to claim your business and verify that you are the owner of the business.

make sure of the following:


1. your business name is correct

2. your phone number is added and correct

3. your business category is correct.

4. you have a few quality photos ready that will showcase your business

5. Operating hours are correct

6. Test that your business location works correctly

Taxation: Selecting the right tax structure for your business


below are the legal business structure available in NZ description provided by the IRD

https://www.ird.govt.nz/tool-for-business/how-to-start/choose-structure/choose-structure-index.html


Sole Trader

Goes into business and trades on their own.

Is personally responsible for all taxes and debts.

Uses their own IRD number for the business.

Taxed using the individual staggered tax brackets.


Partnership

Partnerships need to apply for a new partnership IRD number.

Profits and/or losses are usually shared equally between partners unless a partnership agreement states otherwise.

Each partner is personally responsible for any partnership debt.

Taxed using the individual staggered tax brackets for each partner.


Companies

A company is a legal entity, separate from the shareholders that own the company.A company will need to apply for a company name and for its own IRD number.

The shareholders liability for losses is limited to the amount of their shareholding in the company.

A company has a greater number of compliance responsibilities than a sole trader or partnership.

Companies not only have compliance responsibilities with Inland Revenue, but also the Companies Office.

A company can apply for an IRD number, register as an employer and register for GST when they incorporate through the Companies office website.


this sounds confusing to make it simple what you should focus on is taxation. Sole Traders will pay the staggered tax rate while companies will pay a flat rate of 28% for most single person start ups a Sole tradership is going to be the best, it will save you thousands in tax per year.


Some businesses may be forced into becoming a company to for fill conditions of a contracts etc in this case a LTC may be right for you


below are the main points of being a LTC


Are registered companies with the obligations and benefits of ordinary companies.

Their owners need to elect for their company to be an LTC.

Profits (or losses) in an LTC are "looked through" for income tax, meaning the owners are treated as having received the income and incurred the loss of the company.

For income tax purposes, assets are considered to be owned by the shareholders.

Taxation: Do you need to be GST registered?


One of the biggest questions we get ask by our clients is weather to register for GST or not. if there are any benefits for registering for GST.


The simple answer is if you do not have to register for GST then it is much better for you to avoid GST for as long as you can. We believe it is important for business owners to be aware of what the rules are. Below are the GST guidelines provided by the IRD.



You must register for GST if you carry out a taxable activity and:

-your turnover was $60,000 or more in the last 12 months or will be $60,000 or more in the    next 12 months, or

- your prices include GST.​

As soon as any of these things apply to you, you must register for GST within 21 days.

What do we mean when we say taxable activity and turnover?

Taxable activity - GST is charged on the supply (sale) of most goods and services in New Zealand and some specified imported services. Supplying or making a supply is your taxable activity.

Turnover - This is the total gross value of all goods and services you sell or provide in New Zealand, excluding GST. It includes exported goods as well as grants, subsidies and barter arrangements. It does not include the sale of stock and assets when you wind down a business, the sale of plant or replacement of assets, GST-exempt goods and services or unconditional gifts.



You don't have to register for GST if:

your turnover was under $60,000 in the last 12 months or is expected to be under $60,000 in the next 12 months

your turnover exceeds $60,000 because you have sold business assets due to:

stopping your taxable activity

substantially or permanently reducing the scale of your taxable activity, or

replacing your plant or assets.


Still unclear about GST? contact us we will be happy to help.


Going official and lunching your business


Once you are ready to start your business you will need to call the IRD and speak to a representative they will guide you through the process. Have your personal details ready.


If you are starting a company you will need to also register with the Companies Office. Remember you will need to do an annual return for the companies office as well as the IRD.



Taxation: income tax and due dates?


Financial year dates

The financial year begins on the 1st of April - on any given year

The financial year ends on the 31st of March of the following year


Income tax file date

Income tax returns must be filed by 7th July of every year. unless you have other arrangements with the IRD


Income tax payment date

Actual payment of income tax is due on the 2nd of February of every year.


if you need help with your income tax return contact us. we offer affordable packages for new and established businesses.


Do I need to keep my receipts?


legally you are required to keep purchase and sales receipts for all transactions. There is no way around this you must have evidence for all your transactions.


Do i really need a accounting program?


There is no legal requirement to have a accounting program nor is an accounting program absolutely necessary for everyone. If you are earning up to 60k a nicely kept spreadsheet will work well for you.


If your business is a bit more complex we would recommend using Xero. Xero is a web based accounting program and is very easy to use. It was designed for people who are not accountants. It is a very intuitive accounting program and fairly easy to use compared to other accounting programs.


Claiming Expenses


below is a general list of the expenses you can claim for your business.


Mileage Rate/Motor vehicle

Use of Home office

· Repairs & Maintenance

· Rates

· Insurance (house & contents)

· Power

· Gas

· Mortgage interest

· Security System

· Rubbish Disposal

· Home Telephone


Travel Expenses

· Travel between business places

· Travel overseas

· Travel to acquire plant (this may be treated as capital and added to the cost of the

· plant)


Overseas Travel

· Letters of introduction

· Business contracts/cards

· Firms visited

· Business conducted

· Any diversions for personal purposes

· All items of expenditure

· (No GST is claimable)

Premiums & levies

· Business assets

· Business protection

· Accident compensation levies.

· Building and contents for the business premises


Wages paid to employees (No GST)


Subcontractors


Fixed Assets

Items over $500 + GST are capitalised and then depreciated. This spreads the cost of the asset over an estimated life of the asset. The depreciation is then claimed on an annual basis. Buildings are no longer depreciable but the chattels in the building are. Please keep a separate list so that the maximum depreciation can be claimed. There is depreciation allowed on the fit out of a commercial building, we will let you know what further information we may require.


Professional fees.

· Accountancy

· Legal (in most circumstances)

· Consultancy

· Management


Personnel costs

· Training

· Seminars

· Protective clothing

· Uniforms (must be branded)

· Dry cleaning expenses for protective clothing and uniforms


Miscellaneous costs

· Subscriptions

· Advertising

· Bank charges

· Finance charges re business loans or hire purchases

· Hire of equipment

· Interest (bank, hire purchase, loans)


If you need help understanding any of these expenses for taxation purposes, contact us​


below are the entertainment expenses you can claim.

List of all the txation expenses you can claim

there you have a complete guide to starting a business in New Zealand. if you think we have missed something leave a comment below. subscribe to our blog for more great information.


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