8 Biggest Start-up Costs of a Small Business You Need to be Aware

8 Biggest Start-up Costs of a Small Business You Need to be Aware

Unfortunately, starting a new business isn’t as simple as getting a room, plugging in a laptop, and pulling a couple of chairs up to a table. But, you will have start-up costs.

In a world where every industry space is fiercely competitive and most fledgling businesses fail, you must have every area of your business plan mapped out, including the start-up costs.

Whilst building an online business is very different from opening a little café on the street, here’s a brief outline of common start-up costs that a start-up needs to consider.

1. Market Research Start-Up Costs

Before you do anything else, you need to research your proposed market.

This might be something you choose to do yourself. However, you might not feel comfortable that you can do this effectively. Some will choose to hire a market research firm, in which their costs will need to be incorporated into the budget.

2. Lending Costs

Unless you’ve saved some serious capital in advance, you’ll likely need a financial boost via a start-up loan.

Whilst you can potentially source a loan through the government, this is still a cost you will have to pay back at some point, with interest.

3. Premises & Energy Consumption

Your first office space might be modest, but there will still be rent to pay or the cost to buy.

Likewise, think about your initial utility costs and what they’re likely to be. For example, if you’re running servers, you’ll need to consider a quality generator to keep things going.

4. Relevant Documentation

Depending on the industry you’re going into, basic or industry-specific permits may be required to operate legally.

Various types of insurance to cover your assets, customers and employees are an absolute necessity to protect yourself against any liability issues.

5. Equipment

Again, industry-dependent: equipment start-up costs could range from minimal once the lease is paid through to one of the major outlays of the business.

You must consider what your business initially needs to survive and how much of your budget you can afford to devote to supplies.

6. Technological Start-Up Costs

This can be the cost of a website, an ERP system, accounting, and payroll software, or similar.

Of course, many start-ups will initially outsource these services as they get up and running, but that will still come at a noteworthy cost to the business.

7. Advertising Start-up Costs

There’s not much point in everything else if nobody knows you exist.

Promotional activity can mean anything from a local newspaper advert to an external company to produce a targeted campaign. Whatever the level, advertising is essential to a new brand.

8. Wages

If you are starting with the staff, they need to be paid.

Realistic rates, expectations, and planning around this are essential, as late or unpaid wages can cause employee disillusionment, bad publicity and rip the heart out of a start-up before it can get off the ground.

There are many factors to consider, but the more you devote yourself to the nuts and bolts of start-up life, the better chance you have of making a success of your brand.