Friday, September 16, 2005

[Biz] Setting up for Business

There are a few final steps to before setting your business in motion ...

Factor in any student loan repayments.
Figure out depreciation on assets.
Figure out what can be deducted.
Quantify existing sales by customer.
Prepare a cash flow forecast.
Calculate when you will break even.
Write your business plan.
Decision: is your business plan convincing?

Now it's time to put everything into action.

Make a list of all your tax obligations.
Make sure you have accounted for Terminal tax and Provisional tax (on more than $2,500 profit).
For each business, create a transaction account and a tax account.
Call the IRD and inform them that you are setting up as a sole trader.
Alternatively, set up a company.
Register for GST if necessary.
Put yourself on the two-month return period for GST.
It are eligible, apply for an Enterprise Allowance Grant.

And then start running your business ...

Set up a cash book (either a hard copy or in Excel).
Create a monthly statement of financial performance (basically this is income minus expenses equals profit).
Start a petty cash book.
Set up a filing system for your records.
Established a routine for regular record keeping (I'd prefer to do it mid and at the end of the week).
If you make a profit, set aside 20% for tax purposes.
Backup your data.

And that's at least the spine of what you need to do.

No comments: