For anyone starting up a small business, there will be costs, that’s granted but to how much exactly it will be for each person? not so much.
There is a lot of speculation when it comes to valuing up how much you will spend to start a small business, with some just costing £20 and others up to £100,000!
It just depends on the type of business and industry you are choosing to operate as well.
And what you will need in order to run it, equipment, renting etc…
So it can be tricky to establish a ballpoint on the amount it will cost you.
Advice for your first business steps:
Have enough savings for the first 12 months
Before you take into consideration all of the potential business costs into account you need to ensure you have enough money saved to fall back on if income isn’t what you expected.
This is the first step to success for any business plan, as this will cover any expenditure and any ‘disasters’ accounted for as well.
Seek professional help when setting up your business
This is very important for any business in the early stages of setting up.
If you’re worried about money, most solicitors and accountants will give you your first consultation for free, this way you can get advice from a professional without having to pay for anything, no brainer.
You can even pay an accountant a retainer for helping you throughout your business journey so that you can consult them whenever you need to.
They can be a great investment to help with your complex finances as well.
What Business are you setting up?
Depending on your intentions with your business and whether you decide to be a sole trader or a limited company is up to you.
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Limited company
To set up a limited company you need to register your business, which comes with a fee of just £12 if you do it online, however, paper registration is £40 so make sure you have access to a computer.
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Soletrader
To register as a sole trader is completely free. All expenses and payments are through you.
As there isn’t a guaranteed sum of how much it will cost you to start up your own business, here is a list below of where your money is likely to go, depending on your industry of business:
Offices, shop premises, salons etc…
Depending on your business venture and what space you will need to work from comes with costs in itself.
Whether you rent or purchase a space for your office to be based or if not required you can choose to work from home which will save you a lot of money.
Website and/or email hosting
You’re most likely to be wanting to set up a website for your business so that you can get business and customers more easily (in most cases) which costs to set up and to host.
In other circumstances, you may see it as being beneficial to use email marketing to your customers after they have visited your site pushing them to sign up to your newsletter.
This also costs but can help you retain customers in the future!
Travel costs
Whether your new business venture requires you to drive across the country or to take flights out to different countries, the cost of this needs to be taken into account.
This should take into account the purchase of a van/car/flights and of course insurance.
Equipment purchases
Again, depending on what you will be doing as a business, you may be looking to start a hair and beauty business and therefore will need to buy make-up, hair products and electrical equipment and perhaps furniture if you are renting a salon space.
Professional services from accountants and lawyers
They are essential in order to help you with your business, in the beginning, giving you peace of mind.
Marketing your business
You may hesitate to do marketing for your business, however, in the beginning, you can do your own marketing for free through the power of social media!
After you are financially comfortable then seriously think about investing in a digital marketing agency such as (list and found) to take care of your marketing.
If you are swayed by the cost of hiring an agency just think about the amount of income it will bring from new customers and helping to retain previous and current customers! Not exactly possible without it.
Business insurance
Most businesses will need insurance from the first day of operating, without it you will be risking big financial outlays if the worst should happen.
That’s why it is really important to make sure you are covered for when those unexpected situations are to happen in the future.
Here at IPro, we provide Professional indemnity insurance, public liability insurance and employers liability insurance, – recommended for when you are just starting a business.
If you need any help with your insurance needs for your new business or if you are going freelance and have any questions, don’t hesitate to get into contact!
