Interested in starting a small business in NZ? Here are the things you need to do

After all, NZ boasts a population of over five million residents, and a democratic government, overseeing a stable and transparent business environment. The Heritage Foundation, for example, ranked it sixth out of 184 countries in its 2024 Index of Economic Freedom. 

Still, it’s one thing to know starting a small business in NZ could be a great idea… and quite another thing to try and make the dream a reality. 

Below, then, we’ve set out the steps you can follow to do just that. 

Step 1: Decide what type of business to start 

You might be reading this as someone who already has a particular business sector in mind. If it’s something that you have genuine passion about and belief in, that’ll greatly help you get through those seemingly endless hours trying to get the business off the ground. 

If you already have a lot of knowledge of the given business field, or strong connections in the industry that you can tap into, this will help smooth your way. 

Of course, in choosing what type of business to start, you’ll need to consider the likely market for it in NZ, and its viability. Writing an initial business plan can be a great way to think this through.

Step 2: Put together the business plan 

It’s worth devoting a specific step to developing a business plan, as it is such a crucial roadmap for success. Not only will it help you establish your own confidence in your business idea, but it will also help keep you organised, as well as support your efforts to secure funding. 

No “one-size-fits-all” formula exists for writing an effective business plan. Nonetheless, the essentials of a good business plan are as follows: it should set out your business goals, along with your target market, your approaches to the marketing and sales aspects, and financial projections. 

Also be sure to keep your business plan short, simple, and easy to understand. Be realistic with your goalsetting. It needs to be relevant to the current situation in your industry and the NZ economy. 

Step 3: Choose a name for your business 

There’s so much we could say on the subject of your business name alone. In fact, we have said a lot, in our step-by-step guide to choosing the perfect business name. So, we suggest you D-tour to check that article out before clicking back here. 

To put it in a sentence, if you can come up with something short, catchy, and relevant to what your business does, this will further help you attract and retain the right customers or clients.

Don’t forget to make sure your chosen name is actually available! You can sift through the currently used Kiwi company names on the NZ Companies Register. This will enable you to register a company name that doesn’t clash with anyone else’s in NZ. 

Once you have a solid idea about the company name, you may start thinking about having a website and a professional email. For that, you will need a domain name, which is one of the best digital assets a business can have. 

Remember that a company name and a domain name aren’t the same thing. Your company name will be your company’s legal, registered name. Your domain name, meanwhile, is the string of text that someone types into a web browser to get to your website, such as www.jumpstarter.co.nz. 

Check out our domain checker tool to quickly see what’s available among .nz and co.nz domain names. 

Step 4: Determine the most suitable business structure 

There are various ways in which an NZ business can be structured. Different structures suit different people and circumstances. The one that you choose will affect how your business operates and grows, as well as its finances. 

A given business in NZ tends to be a sole trader, a company, or a partnership. So, let’s quickly take you through some pros and cons of each one: 

• Operating as a sole trader is the quickest and cheapest option. So, you might choose to start out this way. You will have no legal or registration fees to pay, and you will get to control your business while enjoying all the profits. It will, though, leave you with responsibility for repaying all debts. So, it could put your personal assets at risk.
• Unlike the sole trader approach, setting up as a company creates a legal separation between the business and its owners (directors and shareholders.) So, the shareholders will be responsible for repaying the company’s debts, up to the value of their shares. Remember, though, that shareholders will also be entitled to a dividend (a share in the profits of the company.)
• A partnership involves multiple people or organisations forming a business. A partnership agreement outlines how the business’s profits, work, and debt will be shared. This structure can be great for sharing the burdens of running a business. Each partner, though, will be liable for all the partnership’s debts. So, this is another structure where personal assets could be at risk.

Different structures bring different tax implications, too. 

• If you operate as a sole trader, for instance, you will pay tax on all the income you generate from your work. You will, though, be able to claim work expenses to lower your income tax. 
• A company will pay tax on its profits — in other words, the income left after expenses are subtracted. If company profit is distributed to shareholders, the shareholders will need to pay income tax on the dividend. 
• As a business, a partnership isn’t liable for income tax. Instead, all the income is distributed between the partners, who then pay income tax on their share. The partnership will, though, need to submit a tax return to Inland Revenue at the end of each financial year.

Step 5: Obtain a RealMe login

The RealMe service allows you to access different Government online services with a single verified identity. Government agencies — not least the Inland Revenue Department (IRD) — use this universal login. 

RealMe, then, takes a lot of the stress out of managing your business registration and compliance. You can create your account via the RealMe website. 

Step 6: Register your business — and don’t forget about GST 

So, you know what company structure you’re going with, and hopefully, you now have a RealMe login. Next, it’s time to register with the Companies Office and the IRD. This will involve filling in various forms, and providing certain details about your business. 

When registering your company, you will also have the chance to register for goods and services tax (GST.) This tax is added to the price of the majority of products and services in NZ. 

It doesn’t matter whether you’re a sole trader, a company, or in a partnership — registering for GST is essential as soon as you think you’ll earn over $60,000 in 12 months. If you fail to register for GST when it’s required, you could be hit with penalties. 

If you don’t think you’ll turn over as much as this, it’s up to you whether to register for GST. 

In this situation, you might choose to register anyway. It could help convey a certain credibility and professionalism as a business, which may be helpful if you’re seeking contracts or partnerships with other businesses. You might also be able to claim a GST refund — for example, if your expenses are high but you haven’t generated much income. 

Step 7: Get your New Zealand Business Number (NZBN) 

Although it isn’t strictly mandatory to have an NZBN, it’ll make your life easier as a business owner if you do have one. For example, it will allow for smoother transactions with local companies. Plus, if you are interested in doing any work with government agencies, an NZBN will be required in order to apply. 

It’s free to apply for an NZBN, so you might as well do it via the NZBN website. It’ll also help boost your business’s visibility, as it will allow other businesses to easily search for you online. 

Step 8: Register your trademark — and begin plotting your business’ growth 

Strictly speaking, registering a trademark isn’t a mandatory part of starting a business in NZ. In your case, you might decide the costs and effort required are prohibitive, and that you would rather focus on growing your business (for now, anyway). 

So, it’s up to you whether to take or skip this step. 

For many novice small business owners in NZ, though, there is no question that their business’ brand will be a potent force in its success. If that sounds like you, you might decide you have to register a trademark for it, for the sake of preserving your business’ identity over time. 

Let’s presume, then, that you decide to do that. You can check for existing trademarks on the website of the New Zealand Intellectual Property Office (IPONZ). If your trademark is available, you can register it. 

Bear in mind there are different types of trademarks — such as words, logos, and shape marks — and that these vary in the exact protections they offer. So, you will need to carefully consider what trademark would best represent and protect your business.

The latest information on trademark application fees can be found on the IPONZ website. At the time of typing, the standard cost of a trademark, per class, is $100, plus 15% GST if you are located in NZ. However, the exact price may vary in certain circumstances. 

Once that’s done, you can turn your attention back to running your business.

Of course, the above are not all the steps that could possibly be included in the setup process for a small business in New Zealand.

Nonetheless, they will put in place an all-important foundation as you take further helpful steps. These moves could include tapping into the locally available resources and tools for small and medium-sized enterprises (SMEs) and exploring financing options such as micro loans and grants. 

Are you eager to achieve liftoff for your small business in NZ? If so, JumpStarter can be at your side through every stage. Take advantage of our resources today to power forward your SME’s success story.