5 easy steps to starting an online business in NZ

Starting an online small business in NZ will not only help you keep pace with the growing e-commerce trend, but is the critical first step to making your business a profitable one.

Currently numbering 530,000, small businesses make up 97 percent of all businesses in New Zealand. While contributing over 25 percent of the gross domestic product (GDP), small businesses also account for 28 percent of the country’s employment. A supportive environment and ease of doing business combine to make NZ one of the best places to start an online business. An online business, however, can mean establishing an online presence with a website to boost walk-ins to the physical store or selling products or services entirely online.

These steps can help you set up a successful online small business New Zealand is known for.

#1: What products or services will you offer online?

The first step in the journey of starting an online business is to determine what products or services you want to sell and if there is a real market need for your offerings. This is also called “product-market fit (PMF)”. Think about how well the service or product you want to sell online aligns with customers’ needs.

#2: Understand your customers

Learn about your target customers in detail and build their personas. These are the people that have a real need for your product or service and are likely to buy from you. Creating buyer personas can help you design or refine your services and products and engage with them better to boost sales.

Utilize different sources such as Google Analytics, LinkedIn, studies, and polls to gather data on customers and study the trends. You can use surveys conducted through phone calls, web, or direct mail to collect detailed data on customer pain points, their geo-location, age, income levels, and buying habits.

Visiting similar online businesses will help you learn what they offer and how they differentiate their offerings.

#3: Write a business plan

A detailed business plan acts as a roadmap and guides you along the journey of starting an online business. Include details of what you will offer, who your ideal customers are, how your business is different from others that offer similar products. Write your mission or goal in simple words as well as your business strategy.

Your business plan should include details on:

·  market research and analytics,

·  target customers

·  budget

·  competitor analysis

·  business’s strengths, weaknesses, threats, and opportunities

·  marketing strategy for your online business

·  pricing strategy

#4: Set a budget and create a financial plan

Determine the startup as well as operating costs of your online business. List the various expenses you will incur that can include designing and hosting a website, delivery costs, business license fees, tax obligations, and small business insurance costs. The same tax obligations apply to online small business NZ as the ones that apply to brick-and-mortar retail stores.

Calculate the revenue you will earn that can include income from e-commerce sales, commissions, bank interest, rentals, and royalties. Include the investment funding source that can be your own investment and/or other small business financing options.

#5: Confirm compliance requirements

If you sell goods or services regularly for profit to customers, you have to adhere to the consumer law. Apart from displaying ‘in trade’ notice on your website, you have to abide by the fair trading practices that include not making unsubstantiated claims, false or misleading statements, or unfair sales practices. Depending on your industry or location, specific regulations may also apply such as privacy policy, consumer guarantees, food licensing, health and safety, food licensing.

#6: Create a website

Apart from choosing a business name, you will also have to decide if you want to sell through an existing marketplace such as Trade Me or create your own website. You can also opt to do both to gain maximum visibility. Before creating a website, you will need to check for a domain name that matches with your business using the One Check tool on business.govt.nz. The next step is to register the domain name and get a matching email address. Include relevant details in your website such as:

· the contact details

· delivery costs

· online payment details

· return policies

· your privacy policy.


Once you set up your website, you will need to adopt digital marketing best practices to drive traffic, generate leads and convert leads to customers.

A key aspect that you need to remember is to purchase the right type of small business insurance that can protect you against common risks. Public Liability Insurance is an insurance for small business that protects you against third party claims related to:

· damage to their property.

· a defective or faulty product you sold or manufactured.

· incorrect equipment installation that leads to property damage. injury, death or illness due to professional negligence.

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