Conducting business in New Zealand: Potential challenges and how to overcome them.
We have previously covered similar topics in this vein. Such as how to set up a company in New Zealand and how to start your small business in New Zealand. However, have you ever thought about the challenges of setting up a business? As an entrepreneur, you probably have thought about it a lot. Maybe even too much- causing you to doubt your entire business plan. If that’s the case, its time to STOP and take a look at the guide we’ve created here!
Who are we?
Here at S & F Consulting Firm (Pvt) (Ltd) we are essentially a business consultancy group. This means we have officially registered agents to act on your behalf for any business-related needs in New Zealand. Moreover, we have more than 7 years of experience under us. Therefore, helping you incorporate your business will be our pleasure!
I am unsure about the process; it seems too difficult!
We understand your doubt, we really do. However, at S&F Consulting, we believe that nothing is truly difficult if it is done in methodic steps. Therefore, if you have any reservations regarding your business journey in New Zealand, do not hesitate to contact us! Our customer service team is online 24/7 and are willing to answer any questions you may have!
So, now to the burning question, what exactly are the biggest challenges when it comes to running a business in bustling NZ?
Potential challenges business owners in New Zealand may have to face:
- Profit and profitability
The first thing a new business owner thinks is, “Will I be able to turn over a profit?”. And it is a very valid concern.
To ensure you will have an adequate turnover of profit, you will need to consider the profitability of your product. The most important factors that determine your profitability are your market competition for your particular product. As well as how many substitutes or replicas of your product are available for purchase. As such, the most important things for you to consider to increase profitability are to price your product accordingly and to advertise it well.
When it comes to pricing your product, do remember, that cheaper is not always better. Yes, consumers are attracted to low prices. However, maintaining a much lower price might compromise quality. Which will severely affect future profits. It is best to price your products proportional to the effort going into producing it.
Advertising is also a key factor; however, we will cover this in a separate section.
- Construction Permits
If your business is a large company needing a physical building, you will first need to file and receive all construction permits. This has to be done for your building to actually be used. In general, there are six permits to be obtained:
- Resource consent (planning)
- Building consent
- An inspection from the District Council
- CCTV installation and approval
- Getting a phone connection
- Water connection & sewer connection
These permits may take up to 90 days to obtain. However, if you do things methodically and through the proper councils, you will obtain them easily.
- Getting Electricity
An electricity connection may seem like a simple commodity. However, in New Zealand, it is a long procedure. Taking up to 50 days to complete, getting the best electricity supply depends vastly on which supplier you choose.
- Marketing and advertising
Did you know the advertising industry now has an estimated net worth of $1.2 trillion? This makes it one of the highest profiting industries in the world. Think about it, how many advertisements do you see a day? As such, when it comes to selling your product, good advertising and marketing is key.
This does not mean that you will have to invest thousands of dollars into your business just for advertising. In fact, advertising and marketing can be completely free, this is because of the rise of social media. By advertising your business on any major social media platform. A bonus point is that multiple studies have shown that businesses that actively engage with their social media audience have a higher degree of profit turnover.
- Paying Taxes
Accurately filing for your taxes is of utmost importance as any mishaps in this process may incur terrible fines or worse, jail time. Therefore, if your business is in the form of a large company, hiring an auditor may be in your best interests.
- Cultural differences
New Zealand’s population has two major groups; the Maori and the European descended nationals. As a result, your business might do well with one group and not with the other and vice versa. As a result, prior research into your consumer base should be conducted. However, if your business is providing something general- for example food or law services, you might find out that you will enjoy a consumer base from both groups. Therefore, in summation, it really does depend on your product.