Going solo and starting your own business is something that many of us dream about. It takes a little risk, a lot of heart and a good brain, and it’s worth every second! The single hardest part of starting a business is taking that first leap. Taking the risk and putting yourself out there is tough. It’s a big decision and comes with a number of difficulties, not least money! Many businesses require a strong injection of cash to start with. Your startup costs are a key component to getting your business off the ground. Some businesses can be started for as little as $100, others will need more investment. So, how do you begin calculating the costs?
Your assets – In the business world, ‘assets’ are the physical things you need to operate your company. If you’re a handyman, these will be your tools and your van, for example. If you’re a craftsperson this will be the materials and equipment you need to make your product. Write a full list of everything you need in order to get the first part of the business going. Many businesses take out a loan to cover this. If you do, make sure you can afford the repayments. Get quotes and start reaching out to suppliers. Negotiate prices and deals!
Expenses – Your expenses will typically be anything else that is involved in setting up the business. It’s the costs that aren’t related to a physical item. For example, it could be the rent on an office space or wages for your first few employees. Web hosting fees also fall into this category. The cost of expenses varies in every business sector, so work out what you need and give it a budget.
Insurance – From the very earliest stages, your business needs to be covered. A general business insurance plan will cover the essentials. You’ll need public and employee liability. This will protect you against any personal injury claims or lawsuits as a result of your company. If you’re operating vehicles, you’ll need group insurance coverage. We also suggest taking out property insurance on your new office space or factory.
Loss of earnings – When most small business get started, there is a period of slow transition. You may still need to work a full time job in order to fund your family life and the business itself. As your business grows, you’ll eventually make the leap to full time entrepreneur! When you do, you may have to take a dock in pay or suffer a loss of earnings. It’s important to build this into your personal budget as you project the first year or two.
Marketing – No business can operate without an effective and targeted marketing plan. That means setting aside funds to employ promotional tactics. As a new business, you’ll need a variety of techniques, both online and offline. Local promotional material like flyers and business cards will need producing. You may also want to consider hiring a digital marketing team to help extend your online profile. All these cost money, but are essential to establishing your company.
Once you’ve got the startup costs budgeted, you can get moving. It’s time to be the entrepreneur you always wanted to be!