The True Cost of Start-Ups
Starting a business can be a rewarding experience, but it takes a lot of work. It’s important to research and consider all the risks and costs associated with taking on this venture before stepping out blind:
Licenses and fees
This includes the cost of licensing your company with the state, local business licenses, copyright and trademark fees. You’ll need to speak to an attorney and an accountant.
Cost of living
If you’re planning on stepping away from your only source of income to start this venture, you should have a good idea of how much money you need to live at your current standard while maintaining the costs of the business.
Building and equipment
Will you need a structure? Will you be leasing or buying your equipment? Even if you start your business out of your home, there are regulations in place that monitor at-home workers. If your service is food, your area will have to be inspected. Many municipalities also require you to have a business permit, even if you are working out of your home. This needs to be researched before you get started.
What do you need to manufacture your product or deliver your services?
This includes utilities, office supplies, subscriptions and anything else you will need to operate day-to-day.
You’ll need to maintain business insurance, auto insurance and health insurance.
You will be responsible for paying employment and any other taxes that may fall under owning your business.
Will you take a salary, and will you have to hire employees to get the job done?
Getting the word out is important. Your budget should cover advertising and marketing materials.
While all these items are relevant, the most important piece of the puzzle is financing. Are you financially prepared to take this step? Will you be securing a business loan to get started, tapping into your investments or borrowing from family and friends? Now that you have a general breakdown of the costs involved, you can make an informed decision. The rest is up to you.