Before you go into business it is important to consider the costs that may be involved in starting your business, before you’re able to produce any income from it.
Here is some insight into the common costs for you to prepare yourself and your business for.
The good news is that you can always bootstrap your business – this means to start with what you have. If you’re already doing this, it would be wise to invest into certain things that do not take up a chunk of those resources.
Website & Domain:
Websites and domains are something that you will need at the start of your business to show your ideal target customer you’re open for business, whilst also showcasing your products and services.
Platforms like WordPress.com or Wix.com are inexpensive options to host your website.
GoDaddy.com is also a cost effective way to buy a domain. (www.yourbusinessname.com)
Branding is a key step of building your business and is often a step that is not developed correctly in many businesses thus impacting how their business performs. Branding is important as it conveys how your company communicates consciously and subconsciously with your ideal target customer.
Some things to consider when developing your company brand are
There are many options from where you can gain your branding. Brand Consultants are the expensive option. There are also less expensive options such as freelancers on websites like peopleperhour.com and UpWork.com.
Whichever option you choose, ensure your branding is developed correctly by gaining knowledge on HOW to develop a great brand for your business.
Advertising is also a crucial step whilst building your business as it generates exposure for your brand and business. Over the years it has become less expensive to get your business and brand in front of your ideal target customer through platforms like Facebook, Instagram and YouTube.
At the time of writing this blog, we are currently generating leads between £1-£2. Which is very cheap!
This is one of the reasons why having a niche is important when starting out in business as you can specifically target your ideal customer with bespoke ads. In fact, Facebook Ads encourage it!
You can also market your business for free on social media through Facebook groups and your profile. I don’t however believe that this has the same power as paid ads.
It’s good practice to set aside some money for marketing at the start of your business. It will be difficult to nail down a specific amount, as each business is different, but once you do start generating revenue, anywhere between 5%-15% of your revenue is a general guideline.
Marketing Collateral includes physical materials like signs, banners, and business cards. These should remain consistent with your branding. These costs can vary from printer to printer. I would highly recommend you speak to your local printers to see what you can negotiate.
From time to time, things in business can go wrong. This is just life and something we cannot predict, so it’s important to protect yourself with the right level of insurance cover.
Two to consider, in particular, are Public Liability and Professional Indemnity insurance.
Comparison websites like www.simplybusiness.com are great resources to check out quotes.
Software prices can vary. Some are free and some are expensive. However in most cases you would not need to invest in software until you actually need to do so.
For example, email marketing software like Mailchimp.com and ActiveCampaign.com are great resources for start-up entrepreneurs as they grow with your business.
Also, other platforms like Google Drive and Dropbox are free up to a certain point.
Think about your business industry and think about software you would need when starting your business.
What equipment will you need for your business, if any? Depending on what business industry you’re going into the cost will vary.
Something to consider is that will you need certain equipment to produce your product before you sell it? If you can sell it first, then produce it, this would be the better option.
If, for example you’re going into baking, you are going to need things like ingredients, an oven, utensils and a mixer. Write down all the equipment you’re going to need before you jump into a business.
When you go into business you are the No.1 investor within it. Investing both time and money (whether that is your money or not) .
You have to invest these resources before you see any return on investment. Success and results do not happen overnight, so plan your resources wisely!
Make it a priority to get sales in the door as soon as possible to fund your business and whatever you do, do not leave the police until you are getting consistent sales in or have correctly financially planned to ensure you can live without a wage coming in from the job.
If you are limited on funds and you are not willing to take two steps back in the present moment by cuttings costs associated with your current life (such as entertainment, expensive coffee’s, concerts, nights out partying, etc) in order to take one giant leap forward for your future by using those funds to invest in your business, I would encourage you to stay in your job, because business will not be for you.
Business is a marathon. Not a sprint.
You can, of course, accelerate the process but going into business thinking that success happens overnight is naïve thinking!
You may have to sacrifice the things you enjoy for 1-3 years, with no guarantee of anything.
This is why business education is so important – to ensure you are doing the right things and not wasting time or money doing the wrong things.
Please also note that every business idea with vary in costs and so please ensure you map out what financial costs will be associated with your business.