Start-up costs when you start your new business
Start-up costs when you start your new business
Before you start your new business, you should work out the total capital you will need.
Startup costs are divided into two categories: Fixed (one-time startup costs) and recurring monthly expenses.
Depending on when you expect to receive payments for your goods or services, it may be best to start off with a few months of working capital.
The ongoing start-up costs you are likely to experience are:
- Your salary
- Employees’ salaries
- Website domain and hosting fees
- Marketing and advertising costs
- Rent/lease
- Supply costs
- Shipping/courier costs
- Telephone
- Water and Electricity
- Liability/insurance costs
- Tax and VAT
- Interest and bank charges
- Office maintenance, parking
- Legal/accounting fees
The fixed (once-off) costs you are likely to experience are:
- Furniture
- Building improvements
- Lease/rent deposit
- Starting inventory
- Water and lights deposits
- Legal/professional fees
- License/permit/franchise fees
- Advertising, website, promotion setup fees
- Operating capital
These are the costs you should expect from a start-up business. If you start small, the expenses are less (this is the best practice by the way!) but if you’re confident you’ll make a lot of money from the word go, then expect thins long list of expense you have to pay once-off AND monthly thereafter.
Remember, you have to make more money than all of these expenses to make a profit – EVERY month! That’s the difference between your expenses and your revenue. The bigger the difference, in the right direction, the better you’re off. Rather start small and build your business in scale with how much money you make every month. It’s the wisest thing to do to keep costs down.