Going out on your own
The journey of the self-employed
While being self-employed might seem appealing, the truth is that in 2005 only 17% of New Zealanders were self-employed. In 2024 that number sits at 15% indicating just how hard it can be to transition into self-employment and make it work. As the saying goes, if it was that easy everyone would be doing it and clearly statistics show that isn't the case.
Source: https://rep.infometrics.co.nz/new-zealand/employment/self-employment
Some common barriers explained below.
Irregular income and inconsistent cashflow
The challenges
Gone are the days of the regular pay cheque and while the occasional month may be great, most present financial challenges.
The impact
It becomes impossible to plan or grow the business when finances resemble a feast or famine.
Why is this a problem?
- Budgeting and getting bills paid is always difficult.
- Stress increases when the money in doesn’t meet business and personal expenses.
- Temptation to spend occurs during busy periods leaving nothing to get through the quieter times.
How I can help
When you work with me, I help you develop a plan for better consistency in cashflow into your home allowing you to remove the stress and turn your focus onto the business and bringing the money in to grow.
Underestimating tax, ACC and other obligations
The challenges
Many newly self-employed delay understanding their full obligations therefore delay putting aside the right amount of money for their own taxes, levies and potentially GST.
The impact
When tax time arrives, no money increases the stress and owing money to IRD now traps people from growing. Their future income becomes committed to repayments either directly or through debt repayment for borrowed funds.
Why is this a problem?
- At year two, provisional tax kicks in so without putting aside money from day one, this can cripple some businesses financially.
- Without saving regularly, tax time becomes a nightmare and focus on earning income is overtaken by financial stress.
- No savings means accumulating debt through tax pooling or other methods further reducing cashflow.
How I can help
When you work with me, I help you make sense of the money in and money out to be better prepared. I am not an accountant but I do know how to help you understand what you need to be earning in order to both survive and grow.
Muddling personal and business expenses
The challenges
The lines between personal and business expenses are often blurred for newly self-employed especially when first starting out.
The impact
These things lead to poor financial management and often cause people to consider returning to the safety of employment, giving up their dream of being their own boss.
Why is this a problem?
- Tracking expenses, determining profitability and making sure you are claiming for the right things is difficult to do.
- Overspending can become a regular thing without fully realising the business isn’t producing the income it really needs.
- Tax time can often be more costly having not fully understood what can and can’t be claimed.
How I can help
When you work with me, I help you separate business and personal, creating the space for you to become more growth focused with your business to succeed.
“As I navigate through owning my own business and the changes from not being a salaried worker, Tony has been amazing! He has given me invaluable advice and guidance and a platform that is straightforward to navigate through, so I can take full ownership of my money. I’m thinking differently, with more intent and I now have clarity and confidence over my finances. Big thanks Tony!”
Book your complimentary call
You'll be talking with Tony.
Pick a time that suits you. It takes about a minute.
Can't see a time that works? Send me a message or call me on 027 239 0046 and we'll find one.