Starting a business is a confusing and daunting experience for many people.
Fear of the unknown is one of the main issues new business owners experience.
It can be expensive to get started in business.
There are many costs you have to consider before you make your first pound. Every business owner wants to get off to the best possible start. Therefore, it’s important to know what to budget for when starting a business.
Your Workplace and Workplace Related Expenses
No matter what industry you specialise in, you have to have some place to work, meet customers and carry out your day-to-day functions. Certain businesses require office space, some need a lot of storage space and others require a workspace that includes specific equipment and features. Most businesses start out by renting or leasing the appropriate building for their business activities. Others may be fortunate to have enough capital to purchase the building their business is located in.
The money you pay towards rent or mortgage is just the beginning. You also have to budget for utility bills, rates and other expenses. You may not know the figures for these expenses until you've been operating for a while. However, these need to be planned for before you start your new venture.
No matter how large or small your business will be, you need some kind of equipment to operate on a daily basis. Even the most basic business requires a computer of some description, certain software packages, a phone, stationery and other items. This is the bare minimum and most businesses require much more equipment than that.
Office equipment, equipment for specialised work and specific types of vehicles are required by many new business owners. The more equipment you require and the more specialised it is, the more expensive it will be. However, this equipment needs to be available as soon as you open your doors to your customers.
If you're a services based business this may not affect you. However, if you provide customers with products you normally need to have a certain amount in stock.
This differs from business to business but can be expensive when you're starting out. You also have factor in other expenses such as storage costs and wages for staff who handle stock.
Marketing and Advertising
If nobody knows your new business exists, you won't have any customers. Established businesses normally have high numbers of returning customers, referrals and marketing systems that attract new customers.
However, when you're starting a business from scratch you don't have this access to customers. You have to find ways to reach potential customers quickly. Traditional advertising using business cards, leaflets, newspaper ads and so on costs money, so be prepared for this.
The internet has grown to become an effective way to advertise to. Any serious business owner knows the importance of the web. You need to invest in the best web hosting service and website technology. Social media marketing has also become important and you may need to hire an expert to help you with this or hire someone to do this work.
Starting a business is a big decision to make. One of the most important aspects is finance, so make sure you budget for all of the most important areas of your business before you begin trading.