Whether you are intending on starting a small business as a sole trader or launching a multinational Ltd company, there will be costs involved. It is important to account for these costs during your initial business planning stage, to ensure the sustainability of your business. Also you need to be able to keep costs to a minimum and be aware of where and if any savings can be made. image source
This article aims to highlight the most common costs incurred when starting up a business.
Equipment
Most businesses require equipment for it to function. A cleaning company requires equipment for cleaning and a large manufacturing company requires equipment for the production process to take place.
Equipment is a major cost that should have been planned for, be aware that as your business grows, costs associated with upgrading equipment to meet demand may occur.
Information Technology (IT) Systems
To be successful in business you need to have a strong online presence, which requires up to date computer systems and websites. The costs of purchasing this equipment is considerable but necessary. You may need to factor in staffing costs for the running of your computer systems.
Information technology is also used for the storage of data and files as well as communicating with potential customers, suppliers and employees. You will need to ensure the most up to date cyber security measures are purchased and implemented to prevent data breaches.
Communication systems
Communication is the key to success in business, so it is important to ensure all methods of communication relevant to your business is in place. Methods of communication include business text messaging, skype, email, conference call facilities, telephone and the humble written letter sent by Royal Mail! All methods incur costs.
Advertising
As a new business you need to be “seen” and to do this you need to market and advertise your business. Advertising methods incur various levels of cost, you could consider advertising in your local community magazine relatively cheaply, or advertise on Television for a considerably higher cost, but with the benefit of reaching a larger audience. Where you choose to advertise depends on your budget and the type of business you’re in.
Insurance
Most businesses require insurance of some kind. Insurances are there to protect you and members of the public. Depending on the type of business you are intending to run you may need to look into buying permits and licenses, this very much depends on where you live as different locations have differing laws and requirements.
Premises
Unless you are considering running your business from home you will need to factor in the costs associated with renting premises. The utilities servicing the premises are also an additional cost. If you solely operate your business online, you could consider your website fees, hosting plan and domain name as your “rent”. Tradespeople need to look at the costs of purchasing a vehicle and the running of the vehicle including fuel and maintenance.
To conclude even the smallest of businesses can accrue some fairly hefty costs associated with starting up. Most of these areas cannot be scrapped to save money, but you always have the option of negotiating a good price.
I hope you enjoyed this article about business startup costs to consider.
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