How to start a home business in New Zealand: Your step-by-step guide

Published Monday 13 October 2025

Table of contents

• What kind of business can you start at home?
• Legal requirements for home businesses in NZ
• How to start your own business from home
• How to start an online business from home
• Common mistakes to avoid when setting up a home business
• Funding options for home businesses
• Resources and tips for running a successful home business
• Get your home business off the ground with Xero
• FAQs on starting a home business

Key takeaways

• Verify local council zoning rules and district plan compliance before starting your home business, as residential areas may have restrictions on noise, signage, business traffic, and customer visits that could affect your operations.

• Establish a dedicated workspace with reliable internet, proper equipment, and minimal distractions to maintain productivity and professional appearance for video calls with clients.

• Register for essential business requirements including IRD tax number, GST registration if turnover exceeds $60,000, ACC workplace accident cover, and any industry-specific licences or permits your business type requires.

• Create a detailed financial plan that estimates startup costs, monthly expenses, and revenue projections to determine when you'll break even and whether you need additional funding to sustain operations during the typical 6-12 month period before profitability.

What kind of business can you start at home?

A home-based business is any business where your home serves as the principal place of operation. Home-based businesses make up a large part of New Zealand’s business landscape.

Popular home business categories include:

• Creative services: copywriting, content writing, graphic design
• Technology services: web design, app development, software consulting
• Ecommerce: handmade products, drop shipping, marketplace selling (Etsy, Trade Me)
• Professional services: consulting, coaching, bookkeeping

Home businesses give you flexibility and help you keep startup costs low.

Check local laws before starting a home business, as zoning rules may apply. If you have business visitors, make sure you understand safety and liability insurance requirements.

Legal requirements for home businesses in NZ

You can usually run a business from your home in New Zealand, but check local rules first. Your local council may have rules about noise, signs, and business-related traffic in residential areas.

Check your council's district plan to make sure your business idea complies. If you plan to have customers visiting your home, you also have health and safety responsibilities to think about. Check with your insurance provider to make sure you have the right cover for your business activities.

How to start your own business from home

Starting a business from home lets you turn your skills and passions into income with minimal overhead and flexible hours. Check out these key steps to get started.

1. Develop your business idea

Developing your business idea starts with matching your skills, passions, and market opportunities. The strongest home businesses align with what you already know and love doing.

Skills assessment:

• Identify your professional experience and qualifications
• Consider special talents or hobbies (baking, crafts, writing)
• Think about problems you've solved for others

Passion evaluation:

• Choose ideas that genuinely excite you
• Consider whether you'd enjoy doing this work daily
• Passionate business owners have more energy and focus

Market viability:

• Research if people will pay for your idea
• Study potential competition in your area
• Ensure the business can generate sufficient income
• Choose a business idea that you can turn into revenue. Start by researching the market and your potential competition.
• Check if you can run your business idea from home
• Review zoning laws for your area
• If you want to run a food business, check if you can operate as a home bakery, as catering businesses often have stricter rules
• Brainstorm freely and consider all ideas, whether simple or creative
• Make sure you can commit your energy and skills to the idea and earn a financial return

2. Write a business plan

A business plan maps out how your home business will make money by connecting your product or service to paying customers. Even a simple one-page plan helps you stay focused and organised.

Why you need a business plan:

• Help you think through key business decisions
• Make it easier to secure financing
• Keep you focused on profitable activities
• Provide a roadmap for growth

Start with a one-page plan that covers:

• What you're selling and to whom
• How customers will find and pay you
• Your startup costs and revenue projections
• Key milestones for the first year

Your plan should cover your product, target market, funding, sales goals, marketing, and team.

3. Create a financial plan

Most home businesses take six to 12 months to turn a profit.

Essential financial planning steps:

1. Estimate your startup costs and monthly expenses. Compare these to your expected income to see when you will break even and if you need a loan.
2. Set prices that are affordable for customers and profitable for your business. Research competitor pricing and work out your minimum price.
3. Decide how you will pay for your initial expenses. You can use personal savings, a business loan, or investor funding.
4. Work out what you can pay yourself at first. Many home business owners start with a modest salary and increase pay as revenue grows.

4. Decide on a name, business entity and legal structure

Choose a memorable name that clearly shows what you do. Protect your business name legally. You can use your own name or create a new business name.

Name selection criteria:

• Make sure your name is easy to remember and spell
• Choose a name that shows your business type
• Check if the web domain is available
• Check that the name is not already trademarked

Name protection options:

• Register a company name if you form a company through the New Zealand Companies Office
• Use a trading name to operate under a different name (without legal protection)
• Apply for a trademark to protect your name at the country level
• Register a domain name to secure your web address

Check name availability through Google searches and the Intellectual Property Office of New Zealand.

• Register a company name if you start a company. The New Zealand Companies Office may require you to have a business name.
• Use a trading name to operate under a different name (without legal protection).
• Apply to trade mark your name if you want country-level protection.
• Register a domain name to protect your business web address.

You'll also need to choose a suitable business structure. This can affect how you're taxed and how much you're personally liable for the business.

There are 3 main types of structure to consider:

1. Sole trader
2. Partnership
3. Company

You are a sole trader by default unless you register as a partnership or company. Talk to an accountant to choose the right structure for your business.

5. Set up the business licence and bank account

If you set up as a company, register with the Companies Office, which is run by the Ministry of Business, Innovation and Employment (MBIE). They will give you a business number.

You may have to pay income tax and Goods and Services Tax (GST), so Inland Revenue (IRD) will need to know about you. You must register for GST if your business's turnover was at least $60,000 in the last 12 months or is expected to be in the next 12. IRD will give you a tax number, and you can register for GST when you meet the criteria.

As a business, you have a workplace – even if it's your home and you are the only worker. The Accident Compensation Corporation (ACC) provides cover for workplace accidents. You need to register with ACC and pay a levy.

Once you have registered your business, apply for any licences and permits you need. The licences you need depend on your business type. Some examples include:

• Apply for a health licence if your local authority requires it
• Register with a verified food plan and your local council if you plan to sell food
• Register for an alcohol licence and check if your employees need alcohol-related qualifications

Review your home-based business insurance needs. Typical insurance includes property, vehicle, public and professional liability, business continuity, key person, and shareholder protection insurance.

6. Set up your home office

Setting up your home office requires a dedicated workspace that maximizes productivity while minimizing distractions. Your office setup directly impacts your business success and professional image.

Space requirements:

• Dedicated area: Separate room or defined workspace area
• Adequate size: Room for desk, storage, and any inventory
• Minimal distractions: Away from high-traffic household areas
• Professional appearance: Clean background for video calls

Essential equipment priorities:

• Reliable internet connection and phone service
• Proper desk and ergonomic chair for daily comfort
• Computer/laptop suitable for your business needs
• Storage solutions for documents and supplies
• Professional lighting for video calls and detailed work

Buy essential equipment first. Upgrade as your business grows.

7. Set up small business accounting

Open a dedicated business bank account after you arrange your registrations, licences, and permits. This helps you keep your personal and business finances separate.

Record receipts for all your business purchases as you may be able to deduct them from your taxes. Also keep records of all your sales. List all of these incomings and outgoings together in one place so you can see how the business is doing.

Work with a tax advisor early. They can help you claim all your deductions, submit accurate returns, and estimate your tax bills.

8. Create a marketing plan

Write a marketing plan to define your strategy and choose the best channels to reach your customers.

To create your marketing plan, you should:

• Analyse your market
• Do a SWOT (strengths, weaknesses, opportunities, threats) analysis
• Set SMART (specific, measurable, achievable, relevant, time-bound) goals
• Outline your marketing strategies
• Choose activities that suit your target audience
• Set your marketing budget
• Review and update your plan regularly

Set up social media accounts and a website to market your home-based business.

Common mistakes to avoid when setting up a home business

Many new entrepreneurs face common barriers when starting a home business. You can solve these challenges with practical steps.

Financial constraints

• Challenge: Limited startup capital and ongoing expenses
• Solutions: Create a detailed budget, apply for business loans, form partnerships, or start part-time

Regulatory complexity

• Challenge: Navigating permits, licences, and zoning requirements
• Solutions: Talk to your local council, hire a business advisor, or use government resources such as business.govt.nz

Family interruptions

• Challenge: Household distractions during work hours
• Solutions: Set clear boundaries, create dedicated work hours, and talk with your family about expectations

Professional isolation

• Challenge: Working alone without colleague interaction
• Solutions: Join professional networks, work from cafes, or attend industry meetups

Funding options for home businesses

Decide how you will fund your new venture. Many home business owners use their own savings for full control. You can also apply for a small business loan from a bank.

Check for government support. Organisations such as the Regional Business Partner Network may offer funding or grants. These programmes change, so check their websites for the latest information. An accountant can help you find the best funding strategy for your business.

Get your home business off the ground with Xero

Starting a business from home is easier when you have the right tools. Use Xero to manage your invoicing, track expenses, and stay on top of your cash flow—all in one place.

Try Xero free for 30 days and see how it can simplify running your home business.

FAQs on starting a home business

Below are answers to common questions about starting a business from home in New Zealand.

What is the best home business to start?

The best home business matches your skills, interests, and market needs. Choose something you enjoy and that solves a problem for paying customers.

What do I need to register for when starting a home business in NZ?

You need to choose a business structure, such as sole trader or company. Register with Inland Revenue (IRD) for a tax number. Depending on your business, you may also get a New Zealand Business Number (NZBN), which helps you deal with government agencies and other businesses.

Can I claim expenses for my home office?

Yes, you can claim part of your home running costs as business expenses. Inland Revenue sets a square metre rate for claims, which is $55.60 for the 2024–2025 tax year. You can claim a share of your rent or mortgage interest, electricity, and internet bills.

Inland Revenue also allows a deduction of 50% of a telephone landline rental if it is also your private line. Using Xero accounting software makes it easy to track these expenses.