The best businesses can flourish with just one simple idea, but a truck-load of cash to back it up with can also come in handy – the trouble is there aren’t many who are in a position to fully fund their own venture and the banks are still wary about lending.
All is not lost though, and a little lateral thinking and the odd bit of cost cutting means you can start up your own business with minimal overheads.
Here’s what you need to do to get started…
Calculate the costs
Once you’ve come up with a winning idea, the next thing you need to do is work out how much it will cost to start up and maintain the business.
To work out the start-up costs you’ll need to take into account how much it’ll cost to get the company off the ground operating for the first 12 months.
This needs to be a thorough process that takes every cost into account, no matter how small. Your start-up costs could include things like equipment and installation, stock and materials, marketing costs, legal and professional fees, staff uniforms, and a vehicle with road tax and insurance. Sites such as https://www.quotegoat.com can help you compare insurance quotes and business energy costs.
The ongoing costs could include premises-related costs, including rent, rates and upkeep, wages and ongoing stock costs. If you decide to rent or buy a property you’ll also have to factor in any deposit you’ll have to pay.
Once you’ve worked out your start-up costs you need to compare them against your sales forecasts and then work out if you need to cut cost and, if so, where you can make these cuts.
Here are some of the ways you can help to keep costs down…
Work from home
If there’s no immediate need to rent an office or retail space, then don’t – the cost of running a business premises can make a massive dent in your budget so it could be wise to put it off for as long as possible, especially if yours is a web-based venture.
If you don’t fancy having your home address as the physical point of correspondence, it’s worth considering a Post Office box or a virtual office.
Post Office (PO) boxes allow you have mail redirected to and kept in a numbered box in a post office in your local area, while virtual offices provide a communication address without actually providing a physical office space.
Virtual offices are a great option for online businesses, as websites with a real physical address are a lot more trustworthy than those without.
Get a kick-start
If you’re struggling to raise the money for your venture it could be worth considering a crowdfunding platform such as Kickstarter – if you’ve got belief in your business, there’s no reason why others won’t.
Kickstarter works by pitching your idea to people online who will then invest in your idea, usually for some sort of perk or acknowledgement, and while it’s open to everyone and innovative ideas will usually get the nod, if it looks like you’ve already got enough funding in place your Kickstarter could be knocked back.
Account for everything
When starting a business it can be tempting to go out and buy the best of everything, especially if you’ve got a customer-facing retail unit to furnish, but it’s vital you don’t get ahead of yourself and only buy what you can afford.
So give yourself a strict budget and stick to it, and make sure you can justify and account for every single item you buy – it’ll be difficult, but then no-one ever said starting up your own business was easy.
What would your number one tip be for cutting back on start-up costs? Share your wisdom with our young business community here…
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