In today’s society, where unemployment is high, more people than ever before are taking the self-employment route to bring in income.
Unfortunately, due to poor business planning, many businesses fail within the first year.
Effective planning means taking stock of your financial situation. A business can be started with a computer and a product idea, but various costs need to be taken into account, some of which can be quite significant.
These include the cost of stock and equipment for the day to day running of your business, and hiring business premises if you are not operating at home.
These are some of the other costs you need to consider at the beginning of your business venture to help you budget effectively.
Your lifestyle
Not only do you need enough money to form a capital, but you also need to live. Take into account your family situation. If you are the breadwinner, is going self-employed a risky venture?
With household bills to pay and hungry mouths to feed, you need to ensure you have reserves in your bank account.
With the various costs involved in your start-up, you might want to consider waiting before you bring your idea to fruition.
If you are already in paid employment, it might be worth beginning your business slowly while still making an income.
Marketing costs
Your business won’t succeed if people don’t know you exist. Good marketing is vital if you are to find and sustain customers. This includes taking out adverts in the local media, and the cost of flyers and business cards.
The internet can be a free source of marketing with the use of social media. There are many online services which help you to create your own website, some of which are free and others with a monthly fee.
It is worth spending some money on your site, for example, hiring a service to help you with search engine optimisation.
Professional costs
Not many of us have the experience behind us to set up in business efficiently. For that reason, professional advice is essential to help you plan your new venture.
As there will be legal and accounting aspects to consider, you might think about hiring a solicitor and accountant to help you.
Initially, they will give you a free consultation, but you will need to pay for their services if you decide to hire them permanently.
The other aspect to consider is business insurance. For example, public liability will cover the cost of legal and compensation claims if your product or business causes injury to somebody else.
Insurance should also be taken out to cover your business premises and any expensive equipment you use.
It is worth shopping around on comparison sites for the best deals available. Yes, it will add to your monthly costs, but without it, you could face a huge financial outlay if anything goes wrong.
