Starting up a business is an incredible venture to embark on, but it can also come with hefty costs most entrepreneurs might not initially consider.
From one-time payments for specialist equipment, to ongoing costs like fees and utility bills, knowing what you’ll need to pay can help you better prepare for starting up your business.
While personal financial emergencies could be financed with cheap payday loans, businesses need to better manage their start-up costs or look for traditional forms of funding such as a bank loan where required. Here, we’ve put together a simple guide to help you get started.
The Costs You Need To Consider
- Space And Equipment
Your office space and the equipment and furniture set to fill it are all going to be costs that you need to consider from the offset. For the most part, your equipment and furniture are going to be one-time costs, but your office space, especially if you’re renting it, could be something you need to factor in to monthly budgets. If you truly don’t have the funds, you could opt for working at home and building up a fund in which to afford the space you need.
Licences and permits can come with fees and you’ll need to research and prepare to pay what is necessary. Certain businesses require different licences, and ensuring you have these in check before you start up can save you from potential fines or legal action.
If you have employees, you’ll need to pay them. Unless you’re lucky enough to have someone willing to work for you for free while you find your feet, you’ll need to account for wages as an outgoing cost, and usually at a set level. It’s important to remember that your staff count could grow over the year, and that you need to pay yourself too!
You want your business out there, and the best way to do that is advertising. From social media adverts, to traditional forms like email marketing or even fliers, you need to set aside a budget for the promotion of your business.
Finally, you need to invest in insurance. All businesses require employer’s liability insurance if hiring staff, while other businesses could benefit from public liability or even tools and transit insurance to cover the business and/or owner in the event of an accident.
One Time vs. Ongoing
As we’ve mentioned before, your start-up costs are likely to fall into two categories – one time, and recurring. This essentially means that some start-up costs you’ll only need to fund for once, while others will require ongoing payments over a set period of time.
In general, one-time costs tend to be anything like furniture, specialist equipment or if you’re looking to purchase an office space.
On the other hand, ongoing costs can include advertising costs, insurance payments, payroll and even office rent and utilities.
While smaller, these are often the most important to consider as you’ll need to ensure you’re bringing in enough money each month to pay off what is owed. This is not taking into account any form of financial aid such as a loan which may also need to be paid off.
However, all is not lost. In fact, start-up financing is much more common today than it has been in the past. You could opt to take out a small business start-up loan. If you have a product that people are already showing interest in, crowdfunding could also be a beneficial way to pull money in to produce an initial product while already accepting orders from customers.
Essentially, they’re pre-ordering a product or service to give you the funds you need to start up your business and get the products made.
Starting up doesn’t have to be a financially stressful time. Through careful planning and deeper knowledge of what you’ll need to pay to avoid any unwanted surprises, you can finance your start-up and get your business running in no time.