So, you’ve taken that first step and decided to become the entrepreneur you always wanted. That’s fantastic news. Welcome to a world of self-empowerment and fulfillment. You’re free to set your own hours and choose your favourite clients. You’re in control of your income and make all the big decisions. Of course, it’s not all plain sailing. There will be difficult questions ahead about money and accounts.
As a budding entrepreneur, money will always be your biggest issue. Your dreams are only limited by your bank balance! The first step is calculating your startup costs. These are the essential monetary costs that you need to get the company off the ground. In some cases, it can be almost nothing. In others, it could be thousands. Every business is different and there is no one-size-fits-all approach. Today we’re going to outline how to start calculating your costs.
Your first consideration is what business-types call assets. Essentially, they are all the vital ‘things’ you need to conduct your business. For example, if you want to open a store, your assets will be your stock and inventory. If you’re a handyman, it will be the tools and material for the job. In some cases you can estimate these costs, but it’s better to get real quotes. For example, use CCTY Bearing to get a true quote on engineering parts and bearings. Try to avoid guessing at figures as it could ruin your accounts.
The next area is expenses. They differ to assets because they are tax deductible. In essence, they are all the costs that go into setting up your business. It could be legal fees for registering your new company. It could be the cost of setting up a new website or the rent fees on your office premises. You can even include computers and some hardware in this category. Again, try to obtain real quotes rather than guessing.
In order to draw in those first clients, you’ll need to fork out for some promotional costs. Marketing is a vital part of getting your business moving. Whether it’s local advertising or online marketing, it all adds up. Set yourself a small budget to test your initial marketing and see what works. Then ramp it up with a full marketing plan to launch your product. Remember, you’re looking for a return on investment here. So, make a plan to start earning that marketing money back.
The final cost to consider is a hidden financial burden. Every circumstance is different, but you may have to take a significant pay cut to make your business work. In some cases, you might keep the day job while you work on building your company. Either way, there may be some loss of earnings to consider. If you’re looking after a family, it makes good sense to budget for this cost.
Starting a new business is exciting and passionate. Try not to get too carried away and keep a firm head in the numbers! Calculate your costs accurately, and make a plan to earn it back. Good luck, and let us know how it goes!
