Starting a business is not only hard work, it takes time and money to do so. You may have planned and prepped for months, even years, and netted a little nest egg to make your start-up plans flow more smoothly, but have you thought through all of your potential expenses that will be a part of your initial operating budget?
With nearly 40 percent of all start-up businesses failing in the first five years of operation, many business owners cite that the reason for their failure is not being able to balance profit vs. cost. Taking control of your financials as you start will give you an advantage over those who don’t put pencil to paper and plan out their growth. Here are some start-up costs you may not have anticipated yet you must plan for in order to ensure your success:
Research and development Yes, you can do your own research on market trends to see how to best hook your customers, but you may not be able to dig as deep as a professional research company that is paid to find strategies to promote your business. Take a little capital upfront and get the information you need to start on the right path, and it will pay for itself in dividends as you see profits come in consistently.
Equipment and materials Most new business ventures need equipment and supplies right out of the gate. For example, you can’t start a moving company without trucks, moving supplies, and liability insurance. To do so would be putting a nail in the coffin of your business before you even start. Set aside money for necessary equipment and supplies, so you have what you need to meet customer supply when they demand products and services.
Taxes and fees It does cost money to register and start a business. In reality, most small businesses don’t see a significant profit until three years in, yet you are still required to pay taxes and fees to continue legally operating. Pay these on time and in full to keep the ball rolling. Many of these fees can vary from state to state, so talk to a financial advisor about the best way to get your corporation off the ground while tucking money away for taxes and fees that will keep your organization legal.
Office/operating space While it may be more cost-effective to begin your business out of your home, you’ll inevitably grow to a point where continuing to mesh home and work will not work any longer. You’ll need to invest money in an office or operating space that meets your needs. Rental or purchase of space will likely require a monthly fee; make sure to factor this in when planning your monthly and annual budgets.
Inventory Unless you’re selling an intangible product or service, you’ll need to house inventory to ensure that you have product when your customers call for it. You’ll find yourself going under pretty quickly if supply cannot meet demand, so plan carefully for expenses that involve sellable items that customers clamor for.
Advertising Starting a business will not fly unless you have a budget for advertising and making yourself visible to potential customers. Consider investing in print ads, web and online presentations, social media campaigns, and other means of putting your brand out there. The more visible you become, the more likely it will be that your target audience will find and begin to build a relationship with you.
Insurance Much like your health, car, and house, your business needs to be insured in order to protect you and your family against loss, legal issues, and other snags that might otherwise drain your assets. Shop around for deals, and take proactive measures to ensure that what you have worked so hard for is protected.
MaxGroup: Helping you manage all the details
MaxGroup Business Solutions have firsthand knowledge of all things related to business. We have the tools, tips, and tricks to help you achieve your professional goals from start to finish. Contact us now to begin planning for significant business success; visit www.maxgroupbusiness.com for more information.