27 May 2019
You have had your idea and created a business plan. It feels like an amazing opportunity and you can't wait to get started. However, if you have never had your own business before then how can you possibly know how much it is going to cost you?
There is of course no exact figure that covers every emerging business. It entirely depends on your business model and your industry. Businesses can be started on as little as £20 or can cost hundreds of thousands of pounds. It depends largely on how much equipment you need, the type of premises you will require and any other resources you need to stockpile before throwing open your doors to clients. We can however look at some of the common expenses involved in beginning a business.
Identifying your expenses enables you to define your costs. Initially you will need to work out the first year's cost as part of your business plan, and a detailed plan should also estimate your rate of growth and any risks involved. Putting a figure on the following expenses will help you to make an accurate estimate of your start-up costs.
Although it may be tempting to throw lots of money at your business in the first instance to make it the shiny, well-oiled machine that you have dreamed of, experts advise that initially you keep costs to a minimum where possible. This enables you to grow slowly and confidently without the pressure of debts. Building and reinvesting your profits is a safer way to inject funds into your business.
Your business is unique and so are your start-up costs. Our best advice is to be honest with yourself and make a comprehensive list of your expected costs, as well as building in a contingency fund. Budgeting appropriately allows you to avoid nasty surprises and gives your business the best opportunity to flourish.