What are the common costs associated with starting a business

[MarkJackson]

Hey Everyone,

Looking into establish my own company. Currently I have some friends and family that are willing to invest in the organisation.

I'm still in the process of planning and I was wondering, what are the costs associated with starting a business in respect to one time costs that most (if not all) small businesses have to pay for?

[Astrid]

Hi Mark

That depends on the business you are planning to set up... do you just need a computer with software, an internet connection and a phone? Do you need to rent office/warehouse space? Will you need a shopfront?
Think business registration, stock, website, business cards .. a logo ...

Maybe you have a bit more information, that would make it easier for others to comment.

chers
Astrid

[@HeatherSmithAU]

Yes more information as that question is so open ended.

Buying a business.

Buying a Franchise.

Starting from scratch.

all have different costs/expenses.

[Angela, communic8 design]

Hi Mark,

Yes obviously your set up costs will vary business to business, but the mandatory items are:

Software and hardware. There are some great hosted software solutions available now. The benefit of this is that you pay a monthly fee rather than a big up-front cost. Updates are taken care of for you and you can walk away at any time if it's not working for you.

Take it from someone who invested thousands in a CRM (customer relationship management) program that never got used, beware of committing to a large investment in the wrong software!

Space. Whether you work from a home office or leased/purchased premises, make sure your environment is one you're going to be happy in. In the early days I predict you'll be seeing a lot of it.

Consider your growth needs, if you plan to put on staff down the track, will your premises be big enough?

Does your work space look professional? If you will have customers coming to you, what impression will they get?

Brand. My favourite subject. Invest now and reap the rewards. Don't fall into the 'saving money' trap it will do untold damage to your business. Things like dodgy DIY business cards, you know the ones, the 'I did it myself on perforated paper and ran them through my laser printer' type business cards, ick! Or 'I can't afford a decent website, so I'll get my cousin to throw up a temporary solution'. How many 5+ year old 'temporary' websites are out there I wonder? Actively driving potential clients away in droves.

We are all visual creatures and we form instant opinions about businesses based on the way they present themselves. If you plan to run a professional and credible business, make sure your materials look the part.

Good luck with starting up your business.

[fiona@vas]

Hi Mark,

agree with all the posts above....and I would also suggest allowing some funds for legal & accounting expenses.

You mention having friends and family invest, so it's really important that you set up a structure that is going to work well for everyone..doesn't put your valued investors (or you) at undue risk and plans for what will happen if you sell (or heaven forbid!) need to wind up your business.

Some very sound advice given to me after the breakup of a business partnership was that getting into an arrangement is never a problem...it's getting out of an arrangement when the troubles can begin.

Don't mean to suggest that you should dwell on the negative, but if everyone's clear on best and worst case scenarios you can focus on the best with less worry.

[Merlin McCloy]

Hi Mark

You also need to take into account the expense of Insurance and depending on the type of business this can have considerable impact on moving forward.

In our role as an Insurance Broker we come across people everyday preparing their business plans looking at the cost of insurance.
We have recently been helping a person who was preparing a business plan for the hiring of equipment to new mothers. Finding Liability Insurance that they could afford in a new business venture was simply not possible.

Liability Insurance is a must for all Australian businesses.

Regards

Merlin McCloy
Mojomo Insurance Brokers Pty Ltd
AFS: 297464
Freecall 1800 24 33 12

[Burgo]

Sound advice especially Merlin.

It really dependson the type of business your going to set up.

Say for instance a cleaner needs a mop and bucket and a good vacuum cleaner, some insurance and a bit of low cost marketing.

A carpet cleaner needs machinery and some training plus insurance and some low cost marketing.

An accountant can either set up a work from home office or rent an office still needs insurance and more expensive marketing.

So for each industry there is a different set of costs

C'on tell us more

[MissieK]

One cost that should be a must is registering your business name & domain name/s. Many people forget that - as well as everything the others have already mentioned

Melissa

[MCards]

Hi Mark,

All of the above advice are very useful. You may want to find more information/guidelines on how to start a business (company structure, start-up and ongoing costs, etc...) in some websites as below:

Starting in Business

http://www.business.vic.gov.au/scripts/nc.dll?BUSVIC:LANDING:1001c=SEC01.html

Business Briefs - Starting a Business (Young Business Network)

Depending on which state you are in, most of the states have their own business websites and free workshops on how to run a business.

Good luck with your new venture!

[charlescalvert]

Hi,what type of online business entity I have to form? Are there any resources or training provided for this?