Creating your own business is not only a huge decision, it’s a scary one. You’re literally giving up every sort of security and financial safety net you have to pursue your dream, and for that, you should be commended, but you should also be very cautious.
There are numerous ways that you can make your start-up a cost-effective enterprise, and you should utilise every one. If you’re not being cautious with money, your business is going to fail and your life will be infinitely more complicated. Here are a few things and fees to consider when you’re budgeting for your very own start-up.
Business Filing Fees
Among the first fees you’ll encounter are business filing fees. This includes your business license, a fictitious name statement, and reseller license feeds. The fees are usually paid annually, and the cost varies, but the price is £100 a year for a sole proprietorship. Corporations can range from a few hundred pounds to a few thousand pounds.
Phones & Computers Keep Your Business Connected
For a landline, you’re going to pay about £20 a month. For a cell phone, you’re looking at £50-£100 a month. If you consider the cost of a cell phone for every individual employee, and it quickly adds up.
You’d be wise to implement a BYOD, or Bring Your Own Device plan. This will allow you to restrict access to certain company documents while still allowing them to do work and share it with other workers. You could save money here by ditching the company landline — there’s no need for it.
Perhaps even more significantly, though, a BYOD policy will help you cut down on the number of devices that you have to supply to employees. After all, another huge fee for start-ups is the cost of computers and other devices. Implementing a BYOD plan for computers will allow your workers to use their own laptops, tablets, and other devices at work.
Accountants Keep Everything Organized
You don’t want to handle all of the finances alone, do you? Hire an accountant to deal with your business taxes, especially if you work from home. This is more of a necessity than other items on the list. Accountants can range from £300-£1000 annually. There’s no way to cut corners here, you need an accountant.
Insurance Protects Everyone
You’ll need to pay for various types of insurance as well. Liability and errors and omissions insurance can vary, but it usually runs from £1500-£2500 annually. Disability insurance runs from £250-£500 a month. Life insurance is fairly inexpensive, especially if you’re young, and will run you about £10-£20 a month. As you age, the rate will increase. The earlier you sign up, the more you save.
Lawyers Help With Business Structure
It’s always smart to have a company lawyer should the issue arise. If you want representation, you’re looking at spending about £150 or more an hour. You’ll need a lawyer for the formation of your company, financing, for website and customer agreements, and the day to day legal work of the company.
Advertising Your Business
Another crucial financial pit for start-ups is the unexpected advertising that comes with a start-up. You’ll want to advertise everywhere, from newspaper ads to the Internet. A decent online campaign will run £100-£600, but hopefully, it’ll pay for itself. Rather than putting ads in the paper, you could cut that cost completely by advertising on social media. Social media advertising is completely free.
Another important business fee that a lot of companies don’t factor in is the cost of Internet. You’ll want a fast connection, and one that can hopefully withstand multiple people connecting at once. The cost of an upgraded cable Internet connection can be around £75, but if you want a T1 connection, you’re looking at several hundred pounds a month.
For a decent website host, you’re going to have to shell out about £40. There are cheaper ones available, but they’re probably cheap for a reason. Pay the extra pounds and go with a hosting service that offers twenty-four hour support. You’ll also want a fairly flexible host, one that allows you to upgrade and fix issues whenever the needs arise.
There are many hidden costs and fees to consider when starting your own company, and these are just a few. Are you financially able to start your own company? Can you think of any other things to consider?8