class=”id99″You have this wonderful business idea that’s been cooking in your mind for years, and now you think it’s about time you put it in motion. This is quite an exhilarating moment, isn’t it? You’re thrilled at the prospect of bringing your concept to life, but still fretful that your new venture could fail before it even gets started properly.
To be specific, you’re concerned that you might not have enough funds to get your business up and running. If that’s the case, we can help you prepare adequately by familiarizing you with the various start-up costs your new business will be faced with.
To be specific, you’re concerned that you might not have enough funds to get your business up and running. If that’s the case, Start-up specialists, Fusion Accountants can help you prepare adequately by familiarizing you with the various start-up costs your new business will be faced with.
Research
We can’t stress enough the need to conduct thorough research prior to setting up your business. It’s through research that you’re going to validate your idea, refine your planned offerings, and find out who your target customers will be.
The services of a market research firm will come in handy here, but there’s nothing to stop you from doing your own homework if you have the time. Either way, be sure to set aside funds for this crucial step.
Incorporation
After you’ve done the research and prepared a business plan, it’s time to decide what type of entity your venture is going to assume. If it’s a corporation, check with a local business formation attorney to see how much it’ll cost to file articles of incorporation in your state.
Even if you’re planning to skip this step for now, you will still need to apply for permits/licenses at both local and federal levels. The kind of documentation required will depend on various factors so, again, a lawyer might still be of help. Otherwise, consult other business owners and find out how much it’ll cost to obtain all the right papers.
Premises Costs
Even if you plan to operate from home in your formative stages, it’s important that you plan on how you’re going to acquire an official premise. Figure out the most suitable location for your business, as well as how much space you’ll require as operations grow.
Remember that you’ll be required to put up a security deposit when acquiring your premises. Also factor in the cost of re-fitting the space to meet your operational requirements. Make sure your premises budget has enough funds for all these expenses.
Staffing and Employment
While there’s the option of hiring freelance contractors, full-time employees seem like a more sensible bet when you factor in the cost of training and supervision. So once again, you need to plan on how you’re going to recruit manpower from the very start.
Consider what channels you’ll use to attract potential candidates: Will you advertise positions directly or just hire a recruiting agency? Figure out which route is likely to bring in the best talent and budget appropriately.
Also make sure you have enough cash to cover at least 3 months of wages upfront. The last thing you want is to suffer bad publicity and high turnover due to the failure to compensate your employees.
Insurance
Your business could definitely use the same protection you’ve afforded your car, home, and other personal assets. Insurance for business comes in various forms, and each kind of business will have different priorities when it comes to taking out coverage. Still, we’ve identified a few crucial policies that every business owner should consider:
– General liability insurance: This shields your business from claims of injury/damage suffered by third parties in and around your premises. Liability coverage can save you lots of stress and anguish if you work closely with the public (e.g., if customers will frequent your premises). Make sure your policy includes product liability insurance to cover claims resulting from the use of your merchandise.
– Worker’s compensation: This provides liability coverage for claims filed by your workers for injuries/losses suffered while undertaking one’s duties. Worker’s comp is legally mandated for all businesses with full-time employees, and penalties for non-compliance can be steep. So, make sure you’re covered before you start recruiting staff.
– Property insurance: Commercial property insurance can be structured to cover your inventory, furniture, and other equipment in the event of fire, theft, and/or natural disaster. And if you’re planning to take title of the building from which you operate — whether by procuring a mortgage or otherwise — you’ll want to include the structure in your policy as well.
– Professional liability insurance: Service providers and businesses that offer advice on top of their products should take out this coverage. It will step in when a client seeks damages due to perceived professional negligence, or failure to meet their expectations.
– Data Breach insurance: Just about every business collects data these days, and you want to make sure you’re protected in case of a breach. This coverage will foot the cost notifying the affected persons and restoring your reputation thereafter.
Check this article to see what other important business insurance you may need as a sole trader.
Marketing
Putting your business in the public’s radar is of utmost importance when you’re aiming to hit the ground running. Most startups prefer to advertise themselves through digital channels due to their lower cost. If you want to get the word out fully, however, you must use a combination of both online and offline mediums.
Be prepared to spend up to 5 percent of your budget on promotional initiatives when you’re starting out. The figure could then drop down to 1-2% as your market reach grows farther and wider.
Borrowing Costs
If you’re like most budding entrepreneurs, part of your start-up capital will be raised by obtaining debt funding. This too will cost money. You’ll be required to pay some initial fees when submitting your loan applications. Not to forget that there’ll be ongoing costs in the form of loan repayments.
