| One of the challenges of planning and getting | | | | budget for; where they overspent. Genuine |
| a new business off the ground is to establish | | | | business people are usually happy to share |
| what your start up costs are going to be. At | | | | their experiences and give you advice. Listen |
| best, it's going to be a stab in the dark or | | | | to what they have to say and take note. |
| a wild guess, but there are some specific | | | | |
| steps you can take to make your costings more | | | | If you don't have a circle of business |
| realistic. | | | | contacts, put the word out to all your |
| | | | personal friends. A few of them will have |
| Why Estimate Your Costs? | | | | friends or relatives who are in business on |
| | | | their own. Ask for an introduction or |
| But, before we look at where you can get | | | | referral. This will 'warm' them up before you |
| help, we should consider why you need to get | | | | ask your searching questions. |
| your estimate of start up costs to be as | | | | |
| close to reality as possible. Firstly, if you | | | | Bank Business Guides |
| are seeking bank finance the dreaded Business | | | | |
| Plan is required! The Bank Manager is not | | | | Many Banks provide comprehensive brochures on |
| going to be impressed by a comment such as, | | | | starting up in business. They usually contain |
| "I think my start up costs are going to be | | | | a Business Plan template which will include a |
| around £10,000 but hey, who knows!" | | | | section on start up costs. Some go further |
| | | | and produce guides for specific industries |
| Secondly, you need to go into any new venture | | | | and sectors. They provide in depth analysis |
| with your eyes open. You have to be as sure | | | | about the business, the market, the |
| as you can on how much it's going to cost to | | | | competition and estimated start up costs. |
| get your new business started. There is | | | | Call in to your local Bank and ask to see the |
| nothing worse than getting 90% of the way | | | | Small Business Manager/Advisor. |
| there, only to fall at the last hurdle | | | | |
| because you didn't cater for one major | | | | Suppliers |
| expense. | | | | |
| | | | If you are looking to cost your raw materials |
| Lastly, as a start up you are likely to only | | | | or partly finished stock for buy in then, as |
| have a limited pot of money available. You | | | | a key part of your financing, call your |
| have to prioritise which costs are essential | | | | potential suppliers and ask for quotations. |
| and which can be delayed until the business | | | | Tell them that you are starting up and they |
| is more established. You can only do this if | | | | should be more than helpful, after all you |
| you have researched and understand what your | | | | could be a potential customer! |
| costs are going to be. | | | | |
| | | | Examples of Start Up Costs |
| Where Can You Go For Help? | | | | |
| | | | If you haven't got the time to try any of the |
| It's easy to think that you have a good idea | | | | above (and there's no reason why you |
| of what your start up costs are likely to be, | | | | shouldn't find some time!) here are some of |
| but do you really? Once you think about it, a | | | | the key costs you will have to cover: |
| whole can of worms starts to open! But there | | | | |
| are sources of help you can turn to, which | | | | - Equipment |
| will ensure that you don't face oblivion | | | | |
| within the first few weeks. | | | | - Fixtures and fittings |
| | | | |
| A good starting point is your country's | | | | - Installation |
| government support and business advice | | | | |
| agency. These are government funded | | | | - Initial stock |
| organisations which are there to provide free | | | | |
| and impartial advice on all aspects of | | | | - Advertising |
| running a business. | | | | |
| | | | - Decoration |
| Call and book an appointment to see an | | | | |
| advisor. They will have a wide range of | | | | - Legal and other professional fees |
| material and experience which will give you a | | | | |
| good grounding in the costs you will have to | | | | - Licenses |
| cover. The service is usually free, so that's | | | | |
| one cost you won't have to worry about! | | | | - Specialised computer software |
| | | | |
| Chamber of Commerce or Local Business Club | | | | - Up front rental payment |
| Group | | | | |
| | | | - Initial cash float |
| If you have a local arm of the Chamber of | | | | |
| Commerce or any formal or informal business | | | | - Cash to cover trading for the first month |
| group, then they are a good source of | | | | or two until the payments start rolling in |
| knowledge and information. Within the group | | | | |
| you will find a wealth of experience and | | | | The list is by no means exhaustive but it |
| people who have been through it all - good | | | | will provide you with the first step to |
| times and bad times! You may be lucky enough | | | | finding out how much it will cost you to |
| to attend a meeting when a speaker is there | | | | start up. |
| on just the topic you are looking for. | | | | |
| | | | Who Said It Was Going To Be Easy? |
| Colleagues and Other Business Owners | | | | |
| | | | Getting a new business off the ground is |
| If you don't have a club or group you can | | | | difficult enough, even if you fully |
| attend, then seek out business people | | | | understand what it's going to cost you. Doing |
| yourself. Ask all your contacts to tell you | | | | it with no idea is not a recipe for success. |
| about their start up experiences. What costs | | | | Devote some time to this exercise and you |
| they budgeted for; what costs they didn't | | | | will be amply rewarded. |