The saying ‘you have to spend money to make money’ is definitely true when it comes to creating a business. Everyone knows that starting a business isn’t cheap, but were you aware of just how many financial implications there are to think about? Even if you’re starting small, there are a number of costs that will need to be considered. Here are some things to think about so you can be sure you’re not overlooking anything
You might be happy enough starting your business from your home, but as it grows and you start hiring people professional premises are needed. It could be a lock up workshop unit, an office or a shop depending on the kind of thing that your business does. If you are selling physical items, be sure to choose premises which have a stock room or storage area. You will need to decide whether you will rent or buy, but wherever you choose it isn’t a decision to take lightly. Consider things like transport routes, how easy it is for customers or clients to find, nearby parking, the size, layout and facilities. If you’re on a tighter budget, you might be limited on choices but that’s not to say you shouldn’t shop around and think long and hard about your decision. This will be the main base of your company and you don’t want to be tied down to premises that don’t suit you a little later down the line.
Once you have your premises, you’ll need to kit it out. If your company is office based, ergonomically designed desks and chairs will prevent neck, back, and wrist strain. Fast computers (and the latest business softwares) will make tasks quicker and more efficient. You’re likely to need good storage to keep things like stationery and paper records. Depending on what your company does, you may need specialized equipment to manufacture or create items. If your business is retail based, you may need shelving and display units, hangers or anything else to display items. If it’s food based, you will need refrigeration, ovens and kitchen tools. The equipment is likely to be one of the biggest expenses. You could consider hiring premises which already
Finding the right staff is so important in business. Each individual’s role contributes to the business running like a finely tuned machine, and so it’s something you need to get right. As well as staff wages to consider, you also have to think about recruiting, interviewing, training and everything else. All of this takes time and therefore is money. To make your company an attractive place to work, you may also consider including good employee benefits. This is likely to make workers happier and more productive and reduce staff turnover rate. And so you save money on further training and recruiting later down the line.
Licensing and Insurance
Public liability insurance is key for any business, and will protect you if anyone is hurt (or their property is damaged) as a result of your business. Something as simple as a member of the public slipping on snow outside your building could result in a lawsuit and you being made bankrupt if you don’t have the right cover. You can buy online retailers insurance if you sell products online, and other kinds of business covers that might suit your business. Be sure to do plenty of research into this area, so you’re covered on all bases. Licensing is another cost to consider for some businesses. If you’re going to be selling things such as alcohol, knives and other restricted items, you will need licensed and permits to do this. You may also need environmental and pollution licenses, a license to use CCTV or even to play background music. There are many obscure licenses when it comes to business so ensure you have looked into exactly what you need, and paying for these is budgeted for.
Taxes and Accountant
As well as paying taxes on eligible earnings, you’re likely to also need to pay an accountant too. A CPA (certified public accountant) will make sure all of the finances of the company are properly taken care of. For things like bank loans, applying for grants and other money matters, a CPA would have to audit and review the businesses financial statements first. To avoid getting into any legal trouble and have peace of mind that everything is done correctly, you should leave it to the professionals.
You might have the best product or service in the world, but you’re still a very small company in an enormous pond. To get your name out there and heard, you need advertising. There are many of ways you could go about this- from link building techniques to Google AdWords to social media campaigns (ideally you will use a mixture of different methods). Unless you’re experienced in advertising, you will more than likely need assistance along with the actual costs, so again this is something to factor in money-wise. It’s an essential part of the business so isn’t something to be overlooked.
Website and App Design
Your website is your main company ‘base’- it’s where all of your information can be found, and in some cases will be where sales are made. Any business big or small should have one, and it needs to be done well. A cheap, unprofessional site may make you look untrustworthy as a business and put off potential customers. A web designer to get everything set up is a necessary investment. The same applies to an app- right now many SMBs haven’t got on board with what an app can do for them. This gives you chance to get ahead of the competition as shortly they will be seen as just as essential as a website is today. An experienced app designer will cost money up front, although what you will make back it will of course pay for itself.
Had you considered the costs involved in setting up a business?