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Many people talk about their ideas, obstacles, and victories when launching a business. However, the practical details of getting started are often overlooked. If you’re considering starting your own business for the first time, it’s completely normal to feel unsure about how everything works.
Which brings us to the question – how hard is it to start a business?
The answer depends largely on what you do during those initial stages of turning your vision into reality. With the right expertise and preparation, starting a business can be rewarding. However, if you’re unprepared for what lies ahead, you could face unnecessary challenges.
We’re here to make this process easier (at least the legal side of it), so keep reading to learn more.
How Difficult Is It To Start A Business, Really?
There’s no single answer to whether starting a business is difficult or easy, as the experience varies widely from one entrepreneur to another. Factors such as your industry, the size of your business, its location, market conditions, and available resources all play a role in determining how challenging the start‐up process might be.
However, when setting up your business, ensuring it has solid foundations to withstand challenges is key. Preparation, knowledge, and expert legal guidance can significantly help make starting a business feel less daunting and more manageable.
Step-by-Step Guide To Starting Your Business
So, what does it actually take to start the business? The answer is preparations, registration, legal protection, and legal compliance. No matter what kind of business you’re looking to start, when you have the factors we listed sorted, you’ll be giving your business a strong start.
1. Do Your Research And Create A Solid Business Plan
Often, visionaries have plenty of ideas but don’t write them down or organise them into a coherent plan. While starting a business can feel overwhelming (and organising your thoughts might initially seem like just another task) it’s an essential step.
Even if you’ve been dreaming, researching, and mentally planning your business for years, creating a clear, structured business plan is vital for turning those ideas into reality. A solid business plan can help you secure funding, clearly define your goals, and identify potential issues early, saving you valuable time and resources down the line.
Typically, a strong business plan covers a few main elements:
- Market analysis
- Financial projections
- Defined business objectives
- Legal compliance
If you’re unsure where to begin, start with a simple outline covering these key areas then gradually expand on them. We’ve written more on creating a business plan in our article: How To Start Writing A Business Plan.
2. Legally Register Your Business
To start your business, you’ll need to register it. Even if it’s just a small side hustle, most businesses require registration to legally trade in New Zealand. One of the first steps in this process is choosing the right business structure.
In New Zealand, there are several business structures to choose from, but the most common are:
- Sole Trader: This is the simplest structure, where you operate the business as an individual. It’s easy to set up and has minimal costs, but you’re personally liable for any debts or legal issues.
- Partnership: A partnership involves two or more people running a business together. It’s relatively easy to establish and allows shared responsibility, but all partners are personally liable for the business’s obligations.
- Company: A company is a separate legal entity from its owners (shareholders). While it involves more set‐up costs and regulatory requirements, it offers limited liability protection, meaning personal assets are generally protected.
Choosing the right structure depends on your business goals, risks, and how you plan to operate. A company structure offers the most legal protection and is often recommended for serious businesses – no matter how small you’re starting out. However, it’s always best to speak with a legal expert and get help with this process, as it can get a little complicated.
3. Protect Your Business With Essential Legal Documents
It may sound dramatic, but protecting your business is essential. You might be thinking: protect it from what? – and that’s a fair question, especially if you haven’t started operating yet. But this is where foresight is invaluable – quite literally. Identifying potential risks and legal issues early on can save you thousands of dollars (or more) in the future.
The good news? Protecting your business doesn’t need to be complicated. A few well-drafted legal agreements and processes can go a long way in safeguarding your business from day one.
Some key documents to consider include:
- Website Terms and Conditions
- Privacy Policy
- Service Agreement
- Employment Agreement
- Workplace Policies
- Staff Handbook
- IP Licence
- Trade Mark Registration
- Non-Disclosure Agreement (NDA)
- Manufacturing Agreement
- Distribution Agreement
The exact documents you’ll need will depend on your business model and operations, so it’s worth speaking to a legal expert to make sure your bases are covered.
4. Ensure Your Business Stays Legally Compliant
No matter what kind of business you’re starting in New Zealand, there are laws you’ll need to follow. But legal compliance isn’t just about ticking boxes – it also helps protect your business. When your business operates within the law, it’s far less likely to face fines, disputes, or regulatory issues.
Here are some key areas of legal compliance to look out for:
- New Zealand Consumer Law: Ensures you’re meeting fair trading obligations when selling goods or services, including issues such as refunds, warranties and advertising practices.
- Data & Privacy Law: Governs how you collect, store, and use personal information – particularly important if your business operates online or uses customer data.
- Employment Law: Covers your obligations when hiring staff, including wages, leave entitlements, workplace safety and unfair dismissal.
- Local Council and Regional Regulations: Depending on your business location, you may need specific licences, consents, or to meet local council and regional compliance requirements.
- Industry-Specific Regulations: Some sectors, like food, finance, childcare or healthcare, have additional legal standards you must follow.
- Intellectual Property Law: Protects your brand, content and inventions, and helps you avoid infringing on the intellectual property rights of others.
- Contract Law: Ensures your agreements with clients, suppliers or partners are legally binding and enforceable, helping you manage disputes if they arise.
- Health and Safety Law: Requires you to provide a safe work environment and manage risks to your staff and customers, in line with the Health and Safety at Work Act 2015.
From holding the right licences and permits to ensuring you have permission to collect and use customer data, compliance plays a crucial role in building a trustworthy business. Staying on top of your legal obligations can help your business maintain a strong reputation and avoid costly penalties or investigations.
Is Buying A Business Or Franchise Easier?
You don’t always have to start a business from scratch – there’s also the option of buying an existing business or investing in a franchise. However, this process is more complex than simply shaking hands and taking over. It involves careful research, legal due diligence, negotiation, and strong contracts to ensure you’re entering into the right arrangement with the right protections in place.
If you’re considering buying a business, one of the key things to understand is the difference between an asset sale and a share sale. In an asset sale, you’re purchasing specific parts of the business (like equipment, intellectual property, or client lists), whereas in a share sale, you’re buying the company itself – including its liabilities. It’s important to understand exactly what you’re acquiring, what the terms of the sale are, and what your rights and obligations will be moving forward.
When it comes to buying a franchise, you’re essentially purchasing the rights to operate under an established brand’s name and system. This comes with a unique set of considerations – including upfront and ongoing fees, intellectual property rights, training requirements, and how termination or renewal is handled. These details should be clearly set out in your Franchise Agreement, which you’ll want to review carefully with legal support before signing.
Key Takeaways
Starting a business – whether from scratch or by buying into an existing one – can be a complex process if you’re not sure what to expect. While you don’t need to become an expert in every area of business, it definitely helps to have legal experts on your side who do this every day. To summarise what we’ve discussed:
- Starting a business can vary in difficulty depending on factors like your industry, resources, and preparation.
- A clear business plan is essential – it helps define goals, secure funding, and identify potential risks early.
- You’ll need to register your business and choose the right structure (sole trader, partnership, or company).
- Protecting your business with key legal documents (like contracts, intellectual property protections, and policies) is critical.
- Staying legally compliant in New Zealand across areas like consumer law, privacy, employment, and licensing helps avoid costly issues.
- Buying an existing business or franchise can be a viable option but requires careful legal review and strong agreements.
- Getting legal advice early can make the process of starting or buying a business smoother and more secure.
If you would like a consultation on starting a business, you can reach us at 0800 002 184 or [email protected] for a free, no‐obligations chat.
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