Small and micro businesses have been called the engine room of our economy, but what's stopping you from getting in that room?
I work with a lot of people who dedicate full time or a near full time effort into their business, and employ people, but I rarely see anything that resembles a part-time operation anymore. Anything less than 20 hours is rare.
It used to be that this was the first step for a lot of people to taking the plunge completely into a business, or something that they ran alongside another job or to fit in with their lives. Now, not so much.
I had to ask myself why.
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I thought it could be us, accountants, because of the cost involved in keeping your paperwork in order, or the perception accountants have as not being the most fun to hang out with. But if you want free advice you will find most if not all accountants will meet with you for a free, no-obligation initial consultation. So that can't be the case.
I also thought it could be the work that has happened around the restriction of losses over the years.
IRD can question, assess and potentially deny the loss-making of a business. That could mean you end up having to pay when you didn't expect to — many small businesses don't turn much of a profit, if any, for the first few years.
IRD can appear scary for most people when it comes to filing a tax return, child support or working for families, let alone self-employment.
It could also be that anything less than 20 hours in a business is not enough work to profit, not enough time to wear all the hats, not enough without another source of income to ensure bread and butter is paid for. Perhaps in a time of low unemployment, people are opting for the perceived safer route of being employed.
While on the horizon we see more compliance coming I hope it doesn't become all we do. We need to nurture and encourage people into business — you don't need to be a million-dollar start-up to be successful and to make a difference.
Jeremy Tauri is an associate at Plus Chartered Accountants.