Some of the Many Start-Up Costs of Starting Your Own Business
When you are thinking about starting a business you will need to determine the amount of business expenses needed to be fully operational. Because each business will have different needs at various phases of start-up, there is no standard way to estimate your start-up costs though there are general costs that almost all businesses will face at some point during the start-up phases. Some businesses can start with a small expense account, while others may require a significant investment in equipment or inventory. Other business considerations include equipment, build-out costs or renovation, technology and office supplies.
Preliminary Business Planning – Market Research
A thorough research of the industry and consumers that make-up your business should be the foundation of your start-up costs. Some entrepreneurs choose to hire market research businesses to assist in this evaluation. For entrepreneurs who choose this path, fees and market research expenses must be included in the business plan.
Business Licenses, Permits and Insurance
In most areas, businesses undergo inspections and approvals and obtain certain business licenses and permits. Some businesses require basic licenses, while others require special approval by the industry. Learn about federal business licenses and the requirements for license in your state and factor the costs into your business expenses. In addition, you will need business insurance so factor that into your business expenses.
Advertising and Promotion
To start a new business, you will need some form of advertising. However, advertising and promotion of the company is much more than placing ads. This includes marketing – everything a company does to acquire customers for your business. If your new business does not have a big advertising budget, get creative. For example, this could mean handing out free samples or hiring a human billboard.
Equipment and Accessories
Every business requires some form of equipment for basic operation. If you have enough funds, consider purchasing the equipment outright to avoid additional expenses later. A lease is not always better, depending on the type of equipment to be leased and the term of the lease. This will make your business independent of any strings attached to lease.
Your personnel form the backbone of your business. Set a personnel plan, which outlines salaries, wages and benefits. Failure to properly compensate personnel could lead to low morale, turmoil and bad publicity all of which have catastrophic consequences for a company.
We live in an electronic world. You will need to spend money on technology when you start your business. Technology spending will include: the cost of a website, network considerations (including the salaries of an IT personnel), software (including software payroll and accounting) and hardware and software for enterprise systems. Some small businesses choose to outsource these functions to other businesses to save money.
Keep an available supply of cash on hand for unexpected expenses. Some businesses do not find success because they do not have the money on hand for unexpected business expenses. The key is balance; keep an even balance between stocks and available cash on hand.
In some instances you don’t always have to worry about the office or the technology as there are services provided by companies like, corporatehouse.com.au, who actually take care of the office for you so you can worry about the important stuff.