Wow that is a big heading isn’t it?
But it can be done! I have done it and so have others. No it is not the easiest path but for some it may be the only path, for various reasons it can be challenging to get funding to fund a start-up, or you may simply choose as I did that you don’t want debt for your business.
Here are some things you need to know before you even decide to go down this track:
- CHECK your business type: Only some business types and models will be able to start-up and operate successfully with no capital or debt. The types that do this easier are around consulting and providing services that require very few overheads and no up front purchases. Check in with a business adviser to make sure your business idea is something that can work.
- HAVE a back up income for a period of time: It works best when you have a back up income, either part-time work, savings or another person in your life who provides the income to pay the ‘bills’ to live each week until you can contribute.
- BE DISCIPLINED: Not everyone counts themselves as disciplined, this can be a learned ‘thing’ but this more than anything will enable you to not just survive but thrive in this start-up environment.
If you decide to go down this track here are a few tips and things that could help you do this well.
- Start up structure, will you sole trade or be a company from the start? You can sole trade for a while and then switch later its just a little more work but no big deal. To sole trade can be simpler to set up but can have less tax advantages depending on your business type and objectives.
- Call yourself something – not flash or long-winded, make sure you get some professional guidance on this if you need it
- BANK accounts, get a separate one set up, with a second account for tax savings
- Decide on accounting system, basic or tool based? Go visit a trusted accountant for a consultation just to find out what you need to do straight away
- Work out what you need to make each week to cover any business overheads, phone, internet etc…
- Get your pricing right, once again don’t guess get advise.
- Work out your target market, who they are, what problems they have that you solve, and where they may be looking for your solutions.
- Put together a business plan, either with a professional in that field or use one of the many local online or downloadable tools, ANZ bank has one for example. Or business.govt.nz. Make sure it is not heavy, or daunting and that it is a working document just used as guide for direction and decisions – be prepared to review it often.
- Use low-cost or NO cost methods to market yourself, NETWORKING is awesome if you network in the right places for your business AND you learn how to do this well, see my other blog on this: Networking for everyone
- Once you start invoicing and getting money paid for your services, make sure it all goes through your business bank account, split off any GST portion into your second account and also save 20% for other tax like income, so you are prepared to pay when you need to. The REST becomes your working capital.
- Leave this money in there, building up as long as you can, this becomes self-made capital to use to expand your business or to carry you through lower billing cycles.
- Put a time frame on when you want to start paying ‘yourself’ and how much? it may start small but you have to start somewhere – then work out how you will do this, drawings from the account ( you will owe tax on this later) OR PAYE, pay yourself as an employee and pay your tax as you go.
Turn up for ‘work’ when you say you will and work to a plan – yes you get to choose your work hours, what you do for work and who you work with to a degree, but you must turn up and work to a plan you created. (even if this is part-time for you, the time you have set aside to grow your business is the time you have this still applies, it may be one day a week)
Be good with money. Keep an eye on it, keep all your receipts from day one even if it is in a box for a while until you can get something more organised in place – don’t draw from the business to live unless you are able to leave money in there, to cover your running costs and emergency fund.
Get help from the experts around you, in the early days you can barter this time perhaps? Just make sure you are doing enough paid work as well to offset this. Try not to ‘do it all yourself’ apart from this not being smart time and energy wise, the SMARTEST business leaders in our world learned to figure out what they are good at and then get others on board who had skills they didn’t!
Key experts to get involved from early on in order of priority:
- Qualified, trusted accountant that you get along with and can talk to
- Qualified and experienced business mentor or coach ( free is not always the best match and can cost more in the long run if not right because of lost or wasted time)
- Qualified and experienced designer to help with your brand evolution
- Other areas you can outsource and get on as key experts:
- Admin assistant, website developer and builder, and other areas you identify as not your strength areas.
To your business success