I have been right where you are….
I have found my passion and daydreamed about making it a business reality…
I even went so far as finding other people (though, of course, they had much more luck or ability than me🙄🙄) who have made a successful business in healthcare as a coach and consultant.
I’m the first to admit, the thought of leaving the stability of a predictable, steady, safe income stream seemed to threaten my peace of mind …
I couldn’t ignore the feeling I was meant to do more – I was being called to lead others in creating their own freedom and independence from the corporate 9-5. I started researching and setting meetings with successful entrepreneurs. What did I learn from speaking with the individuals that seemed to be living the dream reality I so badly desired? I learned they wanted to share their tips, learnings, and expertise to help others find their own pathway to entrepreneurship. The network of entrepreneurs I have quickly established is fun, supportive, kind, and did I say supportive?
I’m here to share with you some tips on Planning & Budgeting for Startup Costs in Your Business because I believe in your undiscovered entrepreneur!
First things first, it is important to know there is no set cost structure to starting a business. Each business is unique and it is most helpful to start with a business plan to navigate and analyze budgeting factors; however, there are several common business costs to get you started and on your way! In most instances, a business plan will be required if you are seeking an outside funding route to open your small business.
Incorporation Fee – One of the tasks you will need to complete when you form a business is choosing a business structure that includes sole proprietorship, partnership, corporation, or Limited Liability Corporations, LLC. It is best to consult with an accountant to discuss business incorporation models.
Licenses and Permitting– These requirements will vary by industry and by state. For permitting, certain inspections and certifications may be required. Be sure to have a recurring reminder for renewal in your book-keeping system to avoid any lapses in requirements to operate your business.
Equipment Costs: All businesses require some type of equipment. Even if you’re starting a virtual business, do you have a computer that is not the property of your current employer? The costs may be one-time capital costs or ongoing if you decide to lease equipment. In either case, make sure you closely review the maintenance, warranty, and service policies to avoid unbudgeted costs for equipment malfunction.
Market Research: Included within your business plan, market research is critical to the success of the business. Market research will force you to consider strategies to acquire market share, be competitive, and ensure consumer retention – a requirement for business longevity. Understanding your target audience and fixing a pain point is a requirement of any successful business. The niches are in the riches so find a powerful paint point and do something that no one else is doing to resolve it!
Website Development: Built from your diligent market research, your website will bring credibility to your brand, products, and services. You might be able to design your own starter website through services like WordPress that have templates available for you. If you are ready to go through a website design and copywriter services often, the brand consistency benefits your business as well.
Marketing: Advertising, promotions, PR strategy, and industry conferences are all ways to generate leads into your business. Sales and marketing costs should be padded to test different marketing strategies. You won’t know the true customer acquisition cost until you pilot many different channels both offline and online.
Software and technology: If you are running a brick-and-mortar or an online business, the software is a definite cost of doing business. Outline our customer journey in addition to business operations in your business plan to help you identify the applications necessary. Also, don’t forget to factor in 2.9% of credit card fees from payment processing.
Insurance: It is important to consider insurance to protect your personal assets from any business-related liabilities in addition to protecting our customers. If you are exiting a corporate job and carry health insurance through your current employer, you will need to find another option. If you can purchase through the employer of your spouse that is the next best option, otherwise COBRA is an option for ~ 18 months which should provide ample time to research and find a comparable plan on the exchange.
Payroll: Human resources includes wages, salaries, bonuses, and benefits. Planning for competitive wages with incentives may help reduce turnover and disruption early in your business. Contractors are a low-risk staffing solution for businesses just starting out that may not need full-time employees upon opening.
Professional Services: If you are like most business owners, you have identified your passion and superpower and are beginning to contemplate bringing that to market. However, your skillset doesn’t include all professional services such as (business coach or consultant, lawyer, accountant, etc). Professional service expenses and payment structure (ie hourly or annually) will depend on the business need and frequency.
Utilities: Your place of business will have a physical location whether you are considering a retail location or a home office. Common costs include water, electricity, phone, and internet services.
Inventory: Businesses in retail, restaurant, or consumer goods may need to purchase initial inventory to start and flex this budget as the business expands. The importance of good inventory management is critical to ensure proper order fulfillment without carrying too much overhead on goods that could spoil or expire.
Calculating your Start-Up Costs
Creating a budget template to include both revenue projects as well as start-up costs is important to attract investors but also to serve as a personal guide to avoid the anxiety of unplanned financial impacts personally.
Create a list of the expense categories and subcategories including both one-time and ongoing costs.
Research suppliers for each cost category. Request a proposal for services to conduct a competitive analysis to help you minimize cost while not sacrificing quality.
Add a cushion for forecast sales. Six to 12 months will help keep your operations going without the stress of ‘keeping the lights on while you are working diligently on your sales and marketing plan to attract your dream customers.
Total up the worksheet to include the cushion and arrive at a final number.
Are you ready to validate your passionate business idea and see if you too can make your dreams a reality?
Apply for a free discovery call here: https://anucoaching.com/discovery-call