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7 step start-up tool-kit

Start up

Great, so you’ve got an idea and you want to turn it into a business. This toolkit will help guide you through seven keys steps to starting a business in New Zealand. Each step has a range of items to action to give you the best chance of start-up success.

STEP 1: Determine if your idea is financially feasible

The first task you need to complete is figuring out if your idea, as great as it is, will actually be viable. There’s not much point in trying to take an idea to market if it’s not going to be profitable. And if after you’ve done the numbers you’re not going to eventually make any money, then it’s either back to further evaluation (lower costs, find new distribution channels, increase your price or change your business model), or time to find a more viable idea.

Ideas to get you started

Decide on a business model

This is the way your business earns money – as in, how you’re getting paid. For example, a software company’s business model is to sell online subscriptions. A plumber sells expertise by charging an hourly rate plus materials. A retailer adds a margin to products bought from a wholesaler. Choosing a business model (and you can have more than one) is one of the most important decisions you’ll have to make, and it should be done before you commence trading, as it can dictate how you will do business.

Research pricing and margins

What will you charge customers, and what does it cost you to deliver? Sounds like an obvious question but you should ensure you can make a profit on every item or hour sold, or that there is a good reason (for example as a short-term incentive to get new customers).

Can the prices you’re going to charge stand up to your competition? If you are going to compete on a higher price, have the confidence the time and effort you’ve put into your new business, as well as the value you offer, is justified.

Conduct a break-even analysis

A break-even review should help see how much you need to sell to cover overheads. It’s also useful to see if you have the capacity to do so (enough hours in the day, or enough production facilities).

Identify and figure out all your start-up costs. Raw materials, equipment, office supplies, marketing costs – everything you’ll have to pay for to get your business off the ground. These are likely to be one-off expenses.

Next, calculate your likely overheads such as rent, utilities and taxes. These are the regular expenses your business will have regardless of how much you sell, and are on-going throughout your business’s lifecycle.

Conduct a cash flow forecast

To help you identify sales and expense fluctuations each month, create a cash flow forecast to predict when you may have too little or too much cash.

Try to be as accurate as possible with your figures. It's worth putting some time and careful thought into getting these figures right as this forecast is usually the focus for banks and anyone else reviewing your business financials.

Sales forecasting is often hard for start-ups because you don’t have any past records to use as a basis for your forecast. However, you can use external data. Look at trends in your industry, check out past statistics of market demand, and watch your competitors.

If you have just started and can access past data, use your accounting software to help predict sales in the future. Sign-up for MyBusiness Live, and link your bank accounts to your dashboard to see trends. MyBusiness Live is a one-stop tool to help you see the financial position of your business on a daily basis, and it allows you to see other app information all on one screen.

Make sure you’ll be able to pay and be paid

It’s important to set up good payment options for your customers. If you’re in retail, direct debit and credit card options are usually essential. The same goes for service-based businesses, except that in that case you can also look at mobile payment options. BNZ’s PayClip is a portable device that allows you to take card payments as soon as you’ve finished a job.

Guides, tools, and tips to get you started

STEP 2: Find out if there’s a demand

It’s important to understand what customers want to buy, what they’re willing to pay and how you can better position your business so that they are buying from you. Researching the preferences of customers can be tricky if you haven’t started trading yet, but it can be done.

Ideas to get you started

Identify your potential market and what your share of it might be

Conducting accurate market research is the best way to find out how large your target market might be, and what share of it you can expect. Look at existing industry data combined with your own surveying and observing efforts.

What do potential customers think of your idea?

If your family and friends think you’ve got a great idea, that’s a good start. But since they’re more likely to tell you what you want to hear, it’s important to get the opinions of others – the people you’re planning to sell to.

Social media, focus groups, direct conversations and email surveys are all good methods for gauging opinion. Attending trade shows is an excellent way to not only talk to potential customers, but to check out the competition. If you have a product ready to offer, attend as an exhibitor and get as much feedback as you can.

Come up with a possible demand figure

Your initial market research should have given you a good idea of demand for your product or service. Don’t make assumptions, because even if you think you’ve got something that “everyone will want” this is rarely the case. Base your answer on your research results and be realistic.

Is your product or service only going to have a “niche demand”? That is, is it only going to appeal to a select group of customers rather than a wide ranging one? You can better forecast your sales if you’re realistic about who’s going to be buying and why, and how long you can sustain demand.

Think about the size of your market. How many people will be interested, at the price you’re charging? If you’re unsure, use Google to search similar industries or check out the competition.

Talk to your target markets and make sure you understand their motivations for buying from you. Consider your competition and be realistic about whether or not there’s enough business to go around. Is your product or service already being offered? Can you develop a competitive advantage that will boost your sales over your competitors?

Why will people buy from you?

When it comes to people’s disposable incomes, there are a huge number of options for them to spend it on. Just because you’re offering something unique doesn’t mean they’ll spend it on you, so you should have a clear plan of how you intend to grab a share of that market.

Develop your competitive advantage

  • What are you doing better than anyone else is?

  • What have you received in terms of customer feedback that sets you apart?

  • How have your competitors’ strengths or weaknesses helped you improve your product or service?

  • What lessons have you learned from your competitor analysis and how will you use them to build your market share?

Do you have any credibility?

It’s important to appear credible to your customers, so that they trust you and that you know what you’re doing. For example, if you’re opening a salon, you should have proven experience in the beauty industry. You can demonstrate and increase your credibility by attending industry events as a guest speaker. That way, you’re positioning yourself as an expert as well as generating valuable networking contacts.

Use social media platforms to profile your experience, publish customer testimonials, have a professional digital image (website, landing pages, customer experience) and use keywords and search engine optimisation to improve your Google ranking.


  • Using Google, industry directories and lists to search similar businesses and estimate their activity.

  • Use any statistics you can find such as the Quick Stats data from Statistics NZ on understanding customers in your area.

  • Find out how Market Mapper can help find where your customers may live.

  • Actively ask potential customers (before you start), if they want what you’re offering, at the price you can make a profit.

STEP 3: Prove you can beat the competition

Knowing who you’ll be up against in the marketplace is essential. Not only should you estimate your share of the market, but gaining a good understanding of the competition means that you can develop and hone your competitive advantage and unique selling points to get the edge.

Finding how who your competitors are, and their strengths and weaknesses can be an essential first step. You should know who you’re up against, so you can figure out how you’re going to get their customers to switch to you.

Ideas to get you started

Determine the closest competition to you

You’ll be able to better assess who you’re up against and develop effective tactics to gain customers by knowing as much about your key competitors as possible.

Observation can be done in a variety of ways. You can visit their business and purchase something, and while you’re there, check out their product range and level of customer service. You can search online and visit their website, and if they have an online store, make a purchase and gauge the outcome. If you’re concerned about your competitors recognising you, ask a friend to visit their store and report back to you. Consider subscribing to their email newsletter and social media accounts to see what they’re saying.

Evaluate your observations. What can you learn from them? Is there something they’re doing that you can do better? Or can you offer something unique that they’re not? On the flip side, did you get any ideas for improving your own business?

Conduct a competitor SWOT analysis to work out how to beat them

In order to help your business maximise its strengths, reduce its weaknesses, take advantage of its opportunities and avoid threats, it’s important to carry out a SWOT analysis on each of your key competitors.

A SWOT analysis is used to help fine-tune your business strategy by examining internal and external factors that may help or hinder your business, but you can use it for your competitors as well. Identifying and understanding the strengths, weaknesses, opportunities, and threats – that’s what SWOT stands for – allows you to better understand what you’re up against.

Determine how you’re going to price in relation

Are you competing on price, or on the quality of your product or service? What you don’t want is to get into a price war with your established, larger competitors. How can you counter their actions when you enter the market? Offer a unique experience, entice new customers to return with a loyalty card, or focus your energy on your niche customers.

What is the key differentiator?

What sets your business apart from the competition? Are you offering a unique product or service? Do you have experienced staff with specialized training? Is your product manufactured in such a way as to be more sustainable than the alternatives? There are many ways that a business can set itself apart from the competition, and it’s your job to identify what differentiates you and why, so you can market it to your customers.

Developing your competitive advantage

Once you know what your competitors are offering, you can compare your similarities and differences to identify your points of difference, and then develop these into a compelling competitive advantage.

Your competitive advantage is what you do better than anyone else. It’s what sets you apart from the competition and makes you unique. It’s what you’ll use to entice customers away from the competition.

Analysing your strengths can give you a pathway to finding a competitive advantage. For example, your might have excellent product or technical knowledge (more so than your competitors), leading you to develop your competitive advantage around the specialist knowledge you pass onto customers.

Guides, tools, and tips to get you started

  • Complete a competitor SWOT analysis to identify your advantages over the competition.

  • Read the guide on choosing a business model to find out if a new way of selling could be a differentiator.

  • Use the marketing plan template to design a campaign that counters any competitors.

STEP 4: Work out how much money you need and where will the money will come from

The amount of money you need to launch depends on what kind of business it is.

There are two types of start-up costs: your set-up costs (initial equipment, stock, machinery before you start trading) and then working capital (an amount to cover all your overheads for a period of time before you start to break-even and the business starts to pay its own way.

Ideas to get you started

How much do you need?

Set-up is what it’s going to cost you to actually get the business up and running. They’re one-off costs that are required for the launch, and which you probably won’t have to pay for again. Take the time to work out exactly what your business will need to launch. Once you’ve determined all your start-up costs, the next thing is to work out how much working capital you’ll need. How much it’s going to cost to keep your business running until you think you’ll break even, and then start to show a profit. This includes costs like rent, power, wages, and supplies. Multiply this monthly amount by the months you think it will take to get established.

Add these two amounts together; it’s what you’ll need to find in cash.

Where will the money come from?

You might have savings that you can use, or equity on your house. You could have family or friends who are going to give you a hand, or you could be planning to approach your financial institution or an investor. Or you could be planning a combination.

In almost all cases, you’ll need a business plan. Lenders and investors will want to see that you have a clear idea for your business launch and growth. Even if you’re borrowing from friends or family, you should still show them the plan so they’re clear on your objectives.

Successfully obtaining finance from a financial institution is down to good preparation. Make sure you have all your financial records to hand, as well as how you plan to repay the loan.

It’s worth finding out if your business is eligible for any government assistance. Sometimes there are grants and subsidies available to help businesses launch and grow. Visit the Where to Get Help section on Business.govt.nz for what may apply to your business.

Angel investors

‘Angels’ are people that invest personally (usually locally) in businesses where they have a knowledge or understanding. Make sure you have all your paperwork in order such as your accounts, IP ownership, and contracts with staff and suppliers. Most importantly have a one-page summary that highlights your business proposition. Use the first page on the Lean Business Plan template.

If you’d like to learn more about angel investors, here’s some great places to start:

Venture capitalist companies

Venture capitalist companies have pooled capital which they invest in a number of different businesses. If your business is in a fast-growing industry with a large market potential, you may just catch the eye of an investor.

Like angel investors, venture capitalists (VCs) provide funding in exchange for a share in your company. Unlike angel investors, VCs invest on a much larger scale – typically millions of dollars. They rarely invest in an untested idea, preferring businesses that can demonstrate rapid, consistent growth and guarantee a worthwhile return.

If you’d like to learn more about VC’s, follow these links:


Described as ‘democratic finance’, crowdfunding is particularly useful for younger entrepreneurs and potential small business owners with ideas that aren’t bankable in the minds of traditional lenders. Having gained popularity over the last few years, crowdfunding lets you receive donations on the Internet to help get your business idea off the ground. You can offer people incentives to encourage them to get behind your business.

Here are some popular sites:

Guides, tools, and tips to help get you started

STEP 5: Bootstrap

If for whatever reason you’re not able to borrow money or interest investors or crowdfunding schemes, don’t give up. You might still be able to raise the money or things you need by ‘bootstrapping’ your business (finding different ways to get help, funding or support from non-traditional channels.

It’s about making smart decisions to try and solve any cash issues.

Ideas to get you started

Use free business support

Business support or advice doesn’t need to cost a fortune – there are plenty of ways you can get help and build your knowledge for free. Use the Internet to research success stories in your chosen industry and ask the nearest Chamber of Commerce if there are any business mentoring services you could access. You could also approach your network of friends and family or industry association to put you in touch with someone in your industry who could share their knowledge.

Do it yourself

If you don’t have the design budget for an expensive-looking website or are not sure how to design advertising material, consider learning how to do it yourself. For example, you might be able to attend a free or low-cost course on how to use design software, or use Internet resources to teach yourself. You can complete most business tasks yourself if you have enough spare time.

Work from home or lease low cost

If you’re running an online store or you don’t need to meet customers at your own premises, working from home can be a great option. If you need a physical office, leasing a room in a shared office or splitting the lease on a property with another business is a good way to minimise costs. Shared office spaces often have shared amenities such as meeting rooms and coffee break areas, which are great for meeting customers.

Order only what you need

Avoid the temptation to order large quantities of inventory from suppliers in the anticipation of large orders. Holding less stock saves storage costs and reduces the risk of theft or damage. If you are an online retailer, you may be able to arrange for direct order fulfillment to the customer from the supplier, eliminating the need to hold inventory.

Minimise up-front costs

Borrow or negotiate long term payment plans to get what you need now and pay later once you can afford it. Any equipment that’s used infrequently can be leased or hired short term, until you feel you have enough cash surpluses to buy outright.

Use free or cloud-based software

Rather than paying for bundles of software, download software off the Internet instead. There are a variety of websites such as CNET Download that offer free word processing and spreadsheet software like OpenOffice, as well as accounting platforms and budgeting tools, either on a limited-time trial or completely free. There are also free or low-cost cloud-based versions of many commonly used programs.

Use social media as a marketing tool

Creating a Facebook or Twitter account is free and provides you with a platform to market your business worldwide. To gain customers and generate sales through social media, you will need to have a significant online presence, which takes time. Facebook also features a low-cost paid advertising feature you could use to drive potential customers to your pages. Social media pages can also be used as a low-cost substitute for a website until you have enough money to create your own.

Sell on online auction sites

Online auction sites such as Trademe and Amazon are a good way of getting your product to a big audience without having to create an expensive website or pay for advertising. Most sites take a small commission fee for each sale so factor this into your pricing decisions.

Sell any personal assets

Look around your home and decide what you don’t need and sell them to generate cash. If you’ve got a second car you’re not really using, sell it and invest the cash in your growth plans.

Guides, tools, and tips to help get you started

STEP 6: Take care of all the legal tasks

This step is about making sure your business is legal; checking what licenses or permits you’ll need, understanding business taxes, registering a business name and deciding on a business structure.

Complying with regulations and finding ways to manage other external limiting factors are inevitable aspects of doing business. To make sure things go as smoothly as possible, and to ensure that you can start trading without any roadblocks, it’s important to have all the boxes ticked.

Ideas to get you started

Research business.govt.nz/ This is the go-to government resource for most NZ small businesses. They offer information around compliance for small businesses.

Check what licenses or permits you’ll need

Most of the regulations on the various permits you may need are managed by local councils. They’re a great resource for business start-ups, because they can reduce the hassle of getting the right permits, giving you more time to focus on your business launch.

Every Council has its own rules, here are some examples;

Understand business taxes

There’s no getting around it – you’ll have to pay tax. Although this is primarily a job for your accountant, it’s important that you understand the basics. The IRD website provides a good overview on what you need to do.

Come up with a business name and register it

The very first thing potential customers are going to remember about you is your name, because it’s the first contact they have with you. Try to come up with something that’s unique, effective, descriptive and memorable. You want your business name to have an impact on people, so that it’s not easily forgotten and ties into your industry. What you decide to name your business will set the tone for how you’re subsequently viewed in the business world, by both customers and your competition.

Once you’ve thought of a name make sure that no-one else is using it, and then you can register it. Use One Check from the Ministry of Business to check your domain name, business name, social media and possible trade mark.

Decide on a business structure

This is an important decision that can affect your tax, liabilities, growth and investment opportunities whether you’re self-employed or a business. Structure is important not just for how you work now but also the way you want to work in the future. The main business structures in NZ are sole proprietorship, partnership, and limited liability company. It’s a good idea to involve your lawyer or accountant in this decision.

International trade – importing and exporting

If you’re planning to export your product overseas, or you’re thinking of importing goods or raw materials, there’ll be several regulatory issues, as well as tariffs, you’ll need to be aware of. Research how customs in your target export country treat the products (or make-up of the products) you’ll be exporting. Ensure you’re aware of any potential issues and get local advice on clearing customs if necessary. There may also be laws relating to the type of product or service you sell. Hiring a local accountant who specialises in international business tax might prove invaluable.

Intellectual property (IP)

Review the IPONZ site for everything you need to know about protecting your IP (copyright, trademarks, patents, designs, plant variety rights, geographical indications and Māori IP). They also have a useful search tool to identify if anyone else has beaten you to it. Failing to protect your IP means you’re giving your competitors a chance to steal or copy your ideas, trademarks or processes. You also don’t want to enter into a potentially expensive dispute because you’ve been accused of stealing theirs.

Guides, tools, and tips to help get you started

  • Use One Check to see if the name you want to use is available, if you can trade mark it, see if the web domain is available and if any others are using that name in social media.

  • If you’re unsure about what to do, seek professional help from a business consultant, accountant or other business professional. Most initial business support is free.

  • Use the Starting a business checklist to make sure you have everything covered.

STEP 7: Get ready to launch

The last step!

It’s time to look at all the other things that you’ll need to ensure are covered, such as obtaining business insurance, business operations, implementing accounting software and opening your business accounts.

Ideas to action

Do you have supplier contracts in place?

A well-managed supplier can be a vital resource within your chosen industry. They can be a saviour in times of emergency or when your clients have special requests. It’s important to allow all qualified suppliers equal opportunity to compete for your business. This ensures that you can broker the best deal for your business and, in certain cases, helps you get to know the main players within your market. You’ll want to find out what kind of payment terms they offer, if their prices are competitive, if they can meet your requirements, especially if you get a large, emergency order, and if they’re reliable.

Make sure you can produce what you’re offering

If you’re manufacturing your own products, make sure that everything that goes into creating it is documented. It’s important that you and your staff have the actual capabilities to do what you say you can.

Document how the manufacturing process works, and what’s needed for a successful creation – tools, time, skills etc.

If you’re offering a service, then both you and your staff need to have the skills needed for the job.

Write a business plan

The process of writing your plan will help you focus, crystallize your ideas and identify priorities, saving both time and effort. A business plan outlines your strategies. You may need it for finance applications, for presenting to potential investors, and as a road map for the growth of your business. It’ll give you a clear sense of direction, as well as providing a benchmark so you can measure your business progress.

Research borrowing options

Identify the options that would suit you and your business best. It’s important to have determined how much working capital you’ll need in the start-up phase, as well as what your projected sales will be.

Implement accounting software

Good software can reduce the risk of making mistakes and enables you to monitor your cash flow cycles. If you keep all your accounts in the cloud, then you can see everything in real time, and this means you can monitor your cash flow on a daily basis.

Open accounts

These are separate from your personal accounts. Talk to us on 0800 269 763 about the best options for your business, as we have a range of options that can be tailored to suit your business needs.

Obtain insurance

It’s not an option you should skip. It’s important for all businesses to be covered by the right insurance. We can help when considering insurance options.

Develop a marketing plan

Identify your targets, what they need, and where they are located. Then create an awareness campaign so they know you exist, followed by a plan to keep them coming back.

Check with your business advisors (lawyer, accountant, business colleagues)

They’ll ensure you haven’t missed anything. They’ll also go over your business plan with you so it’s in great shape to show to any lender. Your accountant will make sure you’re using the right accounting solution for your business, one that’s compatible with theirs.

Guides, tools, and tips to help get you started


You’ve now completed the 7 Steps to Starting Up.

You should now have the building blocks to start your business successfully. Review all the information we’ve provided, download the additional content and templates, create your business and marketing plan.

Once you are ready to start, come and talk to us about how we can help set up your business accounts and options to make and receive payments.


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