The one thing about modern startups that stands out above all else is their relatively low ‘starting up’ cost. It fact it is what they are known for. But are they really as cheap as we think, or are there hidden costs to pay that are forgotten in the excitement of starting a business from scratch? Read on to find out.
Obviously, no matter how small you start you will need some financial backing behind you to get going. The problem with this is that some forms of finance have more charges and costs associated with them than others.
For example, if you chose to sell part of your company to an investor, then you won’t have to worry about interest on borrowed money or late repayment charges. Of course, you will have to work out whether this is a fair tradeoff for the proportion of your business that they want. But it’s definitely something to think about before entering into any financial agreements to get your company off of the ground.
Another cost that can be quite expensive when starting up a company is training for your staff. Of course, it’s best to employ staff who have education and experience in the field that you need them for. But that doesn’t mean that you won’t still have to provide training on business wide issues such as company systems, or ways of working.
Of course, as money is often such a great factor in a startup, it may be more cost effective to employ people with a passion for their areas but without any formal qualifications. Then pay for the to get their education while they work for you.
In this way, you get a committed individual who is tied to work with you for a certain amount of time. That is also paid at a vastly lower cost that someone that is already qualified.
Equipment and storage
Now, equipment and storage is also a large cost that can be overlooked when you are starting up a company. For one, it’s easy to budget for the things you need based on the price as if you were buying them personally. But of course, the prices are different for many things when bought for a commercial purse such as diesel.
Also, it can be super easy to forget that you don’t only need crucial items and equipment but an effective way of storing these so they don’t get damaged. As well as ensuring that they are readily accessible all of the time.
Some companies solve this problem by installing bins and shelves in their stockrooms and warehouse areas. Although mobile firms would need to look at something like van shelving installation for this purpose.
Lastly, another massively overlooked but very crucial thing you need when starting up any business is insurance.
Of course, the insurances you need will differ depending what field you are in. But for anyone with a physical location, you will need commercial liabilities insurance to protect against injury on your premises.