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