6 costs you’ll need to weigh up when starting your business
In all businesses, there are start-up costs you can’t avoid. These include taxes, salaries and keeping a roof over your head. But what are some of the costs you might not be foreseeing, and how can you keep these costs down as much as possible?
Paying for an office can be a revenue killer. It’s not just the space you’re paying for; it’s also the cost of heating the place, getting the right furnishings set up, keeping the water running, the internet working. Most business owners think they need an office regardless and usually try and get space in the most desirable neighborhood in the city, but if that’s your goal, you’re going to rack up skyrocketing bills.
Is it possible to work from home? Can you go to clients directly instead of trying to impress them with a space of your own? Is it possible to make use of a co-working office that you pay for per month (and which comes with amenities included)? Might it be an idea to open up a spot in a cheaper neighborhood?
Consider these options before you take the plunge.
Research shows that the average business in America with fewer than five employees is unlikely to have a website. That’s a shame, because a website is a brilliant way of attracting business.
However, if you’re unfamiliar with how much websites cost you can quickly find yourself staring down the barrel of a big invoice.
You’ll need to buy a domain name (the bits after the www.) and pay to have your website “hosted” online at a minimal fee. The actual building of the website is where the price increases, and where you need to be smart. Either partner with a website builder who will keep the price low and develop the website in “Wordpress”, or build a site yourself using Wix or Squarespace – both are cheap website builders designed for the layman.
The cost of traveling can rack up quickly, and if you’re in the consulting business, you’ll be commuting more than most.
Consider getting a travel business credit card which will give you rewards. Also, consider using Skype for those long-distance meetings. Once you’ve met a client face to face once or twice, it’s usually not necessary to make repeated stops at their place of work.
Cash flow is always a huge issue for SMEs and late-playing clients can be a real headache. Specify your desired payment policy upfront (30 days after the invoice is received, etc) and get it written into the contract.
Also, always make sure you’ve got cash in reserve to keep you afloat during a tricky month. Cash flow tends to be the number one reason SMEs go out of business.
Wouldn’t it be nice if word of mouth made you rich and famous on its own? In the likely event this doesn’t happen you’re going to want to consider advertising your service. Why not Google AdWords, which will let you bid on key terms/phrases that best describe your business? Bid enough, and your business will show up on the first page of Google any time a user looks up this search term. The good thing about Google’s tools is you can track the success your ad is having and make quick and easy changes on-the-fly.