Calculating your startup costs when starting a business

by Startacus Admin

In this new-normal you can be guaranteed that plenty of people are going to get inventive and consider starting their own business. Is that you too? 

In this quickfire post we outline some of the key startup costs that you are going to have to consider when starting that business. 

Assets and expenses

First up, try and pipeline what costs when starting a business will be assets and what be expenses. Without being too accountancy technical here, assets can be considered as things that you buy that are an investment into the business with some future sell on value if need be - a laptop, your intellectual property, company van, and so on, whilst expenses are costs that you will have to pay back each month / year - accountancy services, a loan, insurance, seo services, subscription services, website hosting costs etc.

Be frugal 

It’s easy to overspend when setting up a business and over think what you might need. The best thing to do is wait until you need it - and then consider if you have the budget. In your costs when writing a business plan for setting up and sustaining your business, have a contingency plan for additional costs, but don’t go out and buy everything at the very start. Be frugal and wait! 

Incorporation

There will always be some costs to incorporate your business (registering it officially as a business), and once you have decided what type of business it will be (Ltd, social enterprise, Charity etc) pencil in how much it costs to make sure everything is official! Incorporating your business will vary depending on where you live in the world of course. 

Employee costs

Taking on staff? There is of course an expense to add in there! Paying tax and employee contributions? Add that in too. Paying yourself a director wage? Don’t forget that! 

Advertising and Promotion

Need to promote your new potential global business empire via more than just goodwill and word of mouth?  Consider costs for digital advertising, social media ads, and even physical adverts and signage. Every business will be different, but promoting your business, and at the right time, will surely be key! 

Office space / shop front space 

Unless you and your new workforce will all be working remotely (which in this new normal, is more likely to be the case) consider how much it will cost to set up shop / be based in that glossy co-working space. 

Monies borrowed

Apart from friends and family lending you money which you will need to pay back (unless they are an investor into the company and don’t want the monies back), consider what other costs you are in debt to. The credit card, the loan, the company car insurance etc, are all costs that you will have to pay for each month. 

Now you’ve pencilled in all of those costs (and most likely other additional costs too that we’ve not mentioned) workout how much money you’re going to have to make each month to at least break even. All good? Great good luck!

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Published on: 9th August 2020