Whatever new business venture you are thinking about or planning to start, no matter what industry or the size of the operation, many of the same costs need to be considered. Creating a business plan and budget to get it set up, along with a way of sourcing the required funding is vital. The average UK start-up spends £22,756 in its first year, according to research, with these costs spread out across many different areas that will make up your budget.
Renting out office space is usually the largest expense your start-up will encounter, which is the reason many begin working from home. However, for a truly professional feel and image, your start-up will require the use of actual office space. If clients, potential investors and employees see that your business address is in a residential area then it can make them have second thoughts. Using an address in a business area and having the use of actual meeting room facilities and more will be more impressive and generate a much more positive and successful image of your start-up.
Staff Wages and Expenses
Planning for employee wages, benefits and other expenses cannot be ignored, as you will need to hire staff at some point to help your business grow. An adequate wage needs to be worked out to attract potential employees in the first place, though don’t offer too much that your start-up can’t afford. Other employee expenses such as reimbursing for business trips to visit clients should be considered too, which can help boost morale and make employees feel more valued.
Depending on the type of start-up being set up, equipment costs can be large too. All businesses will need the basic IT gear, along with internet and other network connections. In some offices this may be included, though if you’re working from home or in certain others you will need to buy or rent such equipment. There may be further bits of equipment you need as well, especially if you are selling your own products. Even cheap items like packaging for deliveries must be included in any budget to ensure everything is covered.
Tax, National Insurance and Legal Fees
In order to run a legitimate business, all taxes and national insurance must be considered. Everything from Corporation Tax to VAT, along with ensuring the National Insurance of your employees are covered is vital. Plus, keeping some money to one side in case of any legal issues is good practice too.
Promotion, Marketing and Advertising
Once your start-up is up and running you’ll need to invest some funding into getting its name out there and attracting clients. There are cheap ways to do online marketing through social media and blogging but sometimes it can be worth investing more in advertising and marketing. These costs can vary from being minimal to overcharged, so it is worth seeking out the most cost-effective options to minimise the amount spent.
When setting up your budget it is important to consider all these costs and work out if they fit in with your budget.