Frequently Asked Questions
In our experience with people who are in this process we believe that the best option is to find a way to give up the full time job (where you don’t have the time or mindspace to effectively plan for the new) but not to go “cold turkey” with no income and work full time on the new business. The stress of bills and “keeping the roof over your head” whilst you get this going can add stress and even tempt you back to employment.
Our recommendations is to:
A Add up your actual ‘no frills’ expenditure per month.
B Work out what is a typical charge-out rate for your time/services/skills if you did it on contract/hourly rate. (This is likely to be in your previous career where you have the most money making potential)
C Divide the monthly expenditure by the typical charge-out rate for your type of work in the market if you were a casual/contractor or consultant.
D Ideally you want an answer that is less than 16 hours (2 days)/week of work to pay the bills. This will leave you three-four days to work on the new business – plus one DAY OFF for your friends and family which is also important.
E Go out and find this part-time role. See if you can negotiate with your existing employer to become a contractor if that is possible*. Start looking for this new work before your leave the current job, use your networks, in person and online.
F We recommend you overlap Module 1 with this planning/preparation phase – so you make sure that being an entrepreneur is for you and do some background work on your skills and personality and your fit with the idea and any business partners you may be thinking of working with.
G If you don’t know much about the industry you are intending to set up in, it might be a good idea to find your contract role in this industry – giving you income and experience.
H There is an alternative option of saving, or borrowing to fund the new business, and you may need to do this. I would suggest that you use these funds for business costs, and try and fund your living expenses with income. The stress of seeing your savings diminish or debt rise, doesn’t help your mindset.
I You can continue into Module 2 and 3 whilst you are still in a full time job if you have the energy, but you may find that you need some more concentrated time to do it justice, a half hour here and there is not going to cut it.
As a general recommendation: if you can do this with your existing employer’s blessing, that would be great. If you don’t have that sort of relationship, there are issues of ethics/restraint of trade/conflict of interest issues that will arise. That’s another reason why contracting is better than part-time employment. Give me a ring if you want to talk this through.
- Note to be paid as a contractor you must meet the IRD guidelines.
How Long does it take?
How Long does it take? It can take as little as 12 weeks to a complete modules 1-3 of the business plan but usually 3-4 months. module 4 is the implementation phase were you may be dependant upon other providers.
To do it quickly you will need to be focused and make full use of the support.
It is also dependent upon:
- What is your start point? How much thinking and research have you done already?
- Do you already understand the business/industry your are entering? Do you understand the economy you will be operating in?
- How much business experience/skills do you have? If you are moving from the corporate world then you will have some transferable skills.
- Are you working on it full time or part time? Our fast-track twelve week time frame assumes a nearly full-time commitment.
- Are you creating a new concept/product or delivery channel? Do you have to develop software products or tools to sell?… these add complexity, time and cost to the start-up process.
How Much Does it cost?
The Start-Up Lab planning process is inexpensive if you do it yourself. For around $1800* (excl GST) you can have all the tools and modules and 4 hours of personalised start-up advice.
You can also access other experienced professionals who offer free introductory meetings and checklist reviews and then competitive fixed rates and with payment plans if you need more legal or accounting support. We have chosen people who are committed to helping small businesses as well as the most frequently used entities, systems and software and documents to focus on, but if you want to do your own thing then you can do this too.
The legal and regulatory business setup costs are very cheap – NZ is the easiest country in the world to set up a new Limited Liability Company and can be done yourself online in a few minutes and for less than $200. The complexity comes in if you are a group of shareholders and directors, and/or have IP to protect, or if you are expecting to be an international or a nationally franchised business. All of these options will take a bit more legal work.
The brand and Website development process can cost a little (a few hundred dollars) to a lot (many thousands) depending upon what you are looking for and what size of business you are creating. We have options available including DIY website development in under two days including opt-in pages and ecommerce pages.
Don’t let finances hold your back, if your idea is good enough there are always options to get you started. The biggest cost might be supporting yourself until you can make an income. The sooner you get through the setup process and the more clarity you have on your offer and target market, the faster this will be. Read through the Preparation FAQ about options for structuring this. If you need to add an income as you go through the startup process talk to Christine about options for a supplementary business as you develop your own. We can also introduce you to someone that puts in second tier finance and a plan to get you to the point where the bank will fund you – at a lower rate.
The biggest cost comes from preventable mistakes. Project Management techniques minimise this.
* Excludes third party costs and fees
What is included?
The planning tools are divided into 4 Modules as shown on the Services page of the site.
The Modules contain:
A worksheet for each module to record your findings
Structured steps with tips, advice, case study examples, documents and templates for each module
Legal documents checklists
Financial and Accounting documents and system checklists
1 hour Document Review and Support included in each Module
Referrals to Specialist Technical people (if required)
One hour free meeting with our Lawyer at Shieff Angland in either Module 3 or 4 to review our legal checklist. If you need documents these can be provided on a fixed price basis and payments spread to assist your cashflow.
One hour free meeting with our Accountant at Staples Rodway in module 3 to review our financial and accounting checklist, They will benchmark your profit and expenses, and review your P&L and cashew forecasts and make suer you have set up your accounting system economically.
One hour free meeting with our Brand and Web Designer to review your brand identity brief and prepare a quote for any assistance required. Referrals to IT specialists to get your computers/phone system operational and any other specialists needed.
Add -On support: In our accountability and support programmes, you can buy packages to ensure that you make good progress with the work, and get a ‘fresh pair of eyes’ on your plans.
Can I get support?
Yes – included in the packages are an hour of document review support per module for the outputs, and within stage 3 an hour of free support from a lawyer, accountant, web and brand designer to review your plans and create a checklist to ensure that you have considered all the areas you need to address.
If you want accountability support you can opt-in for weekly email updates and Q&A support, or face-to-face or Skype meeting support to review you progress and issues. If you are on a tight programme or are new to business then this is a great option. Ask about the option to suit your needs.
Why should I use the Start-Up Lab's modules?
Because there is a learning curve with this work and we have crystallised that learning from others into a system that we are confident will speed the process in 12 weeks and avoid costly mistakes.
- We use standard Project Management Techniques to break up all the work into Modules with milestone outcomes at each stage. This ensures that you do not waste time and money until you have done your risk assessments and thoroughly reviewed the options.
- Scope and Sequence: There is an order to doing this work to get to each module milestone. There are a lot of topics to cover. If you start out researching and exploring whatever catches your interest you may find that you stay in the interesting areas, – those that you know and like, and avoid the others. We all do that. The Start-up Lab process will ensure that you spend time in each area, in sequence to avoid ‘back-tracking’.
- Researching and choosing/validating a target market is a divergent learning activity which can take you down many interesting paths, but you also need a method of capturing the information you find and bringing it back into a common file location so that you do not lose it. You need to learn and gather at the same time.
- Our framework provides tools for doing this and also a methodology process for ensuring that once you have gathered it, you are assessing the information as objectively as possible. (we all see what supports our beliefs or values and miss a lot of other information and this could be dangerous in the business planning process)
- On task: as you are researching you will also come across other information that may be useful to assist at a later stage. To avoid you going “off task’ we have a framework were you can save this information too, so that it is not lost and can be accessed again.
- Hours of free specialist advice from experienced lawyers, accountants and designers and marketers to ensure that you move quickly through the process and avoid problems and learning curve mistakes that we have all made.