ust Started A Business, So I'll Start Making Lots Of Money; Right?
Start-ups seem to be a dime a dozen in this digital age, and the associated costs can be all the more important. Why? Well, because the early stages of a business are all the more volatile – you can never be sure whether the business will succeed or fail, and most start-ups don’t turn a profit until at least two years. In fact, James Burchill states that tech start-ups rarely have any revenue.
But what are the costs that young start-up businesses incur? And how can they save on costs for a more viable business plan that might result in an overall more successful company?
But what are the costs that young start-up businesses incur? And how can they save on costs for a more viable business plan that might result in an overall more successful company?
Space
The world is getting smaller and smaller, as a result space is at a premium. Nowhere is this truer than in the property market, which means that office space is incredibly expensive and a huge cost for start-ups who need an office.
If you’re a young tech start-up it’s easy enough to imagine a huge office in some trendy loft in a hip city, filled with sleek computers, glossy desks and punctuated with silly toys and giant bean bags for downtime. It’s an amazing vision, perhaps purported by the media more than anything, but it’s not realistic. It might be feasible for Google, but your little website will have a very long way to go to even begin to reach those levels.
More likely your start-up will start in a very small rented space, or perhaps even at home. It’s not all doom and gloom though, this is a great way to save on costs.
If you’re a young tech start-up it’s easy enough to imagine a huge office in some trendy loft in a hip city, filled with sleek computers, glossy desks and punctuated with silly toys and giant bean bags for downtime. It’s an amazing vision, perhaps purported by the media more than anything, but it’s not realistic. It might be feasible for Google, but your little website will have a very long way to go to even begin to reach those levels.
More likely your start-up will start in a very small rented space, or perhaps even at home. It’s not all doom and gloom though, this is a great way to save on costs.
Equipment
There are so many different types of equipment you might need for your start-up, this can range from basic things like computers and office equipment to more advanced equipment like vehicles or machinery for manufacturing.
Tech start-ups will often have the more simple equipment needed, but there can be added expenses. For example, aside from computers, things like software licenses can be very pricy – a small graphic design agency start-up might find it a little difficult to afford 10 licenses.
Manufacturers will face significant expenses when it comes to equipment, especially when it comes to things like textile manufacturing. So a young fashion company may find it difficult to balance costs. With any kind of manufacturing or production there also has to be consideration for materials.
There are many different ways of making a saving on equipment, for example by using second hand computers or just renting them – this will save on costs when the comes time to upgrade. There are also certain allowances for energy efficient equipment for example, which will allow you to claim back some tax and therefore reduce costs further.
Tech start-ups will often have the more simple equipment needed, but there can be added expenses. For example, aside from computers, things like software licenses can be very pricy – a small graphic design agency start-up might find it a little difficult to afford 10 licenses.
Manufacturers will face significant expenses when it comes to equipment, especially when it comes to things like textile manufacturing. So a young fashion company may find it difficult to balance costs. With any kind of manufacturing or production there also has to be consideration for materials.
There are many different ways of making a saving on equipment, for example by using second hand computers or just renting them – this will save on costs when the comes time to upgrade. There are also certain allowances for energy efficient equipment for example, which will allow you to claim back some tax and therefore reduce costs further.
Storage
Any start-up that is involved in delivering goods to customers will have a huge issue when it comes to storage. Bigger companies will have their own dedicated warehouses, however most start-ups will not realistically be able to afford this. Conservator Blog said “warehouse space results in significant start-up expenses”. Smaller companies with storage needs, whether you’re delivering textiles or anything else, can save on storage costs by using sharedwarehousing services that will have a large space that is rented to a number of small businesses. This is a great way to save on costs.
This type of warehousing is also beneficial because if you need more or less storage space; then you can easily get it in the same location.
This type of warehousing is also beneficial because if you need more or less storage space; then you can easily get it in the same location.
Fees, Insurance & Permits
One of the more often overlooked costs that are incurred by almost all start-ups is fees, insurance and permits. Registering your company, getting your taxes in order, buying permits to trade and insurance for your employees, offices or customers will all cost money.
As a result, it’s wise to factor in all of these costs into your budget – otherwise you will have an inaccurate projection of your costs and without proper insurance in place you could quite easily end up with some unexpected expenses.
Name registration fees and business licenses are not only potentially costly, but they are also essential. There is no easy way around these costs, but you could certainly save on insurance by shopping around for a good deal.
As a result, it’s wise to factor in all of these costs into your budget – otherwise you will have an inaccurate projection of your costs and without proper insurance in place you could quite easily end up with some unexpected expenses.
Name registration fees and business licenses are not only potentially costly, but they are also essential. There is no easy way around these costs, but you could certainly save on insurance by shopping around for a good deal.
Conclusion
Although it is impossible to avoid costs in a start-up, it is certainly possible to reduce them. It’s not about completely removing the costs, but rather about mitigating them and making them have less of an impact on your overall financial situation.
Thanks for reading. I’d love to know what you think so please feel free to comment below. Also, make sure you check out the rest of my work on WikiNut. I would particularly recommend “Art Deco Buildings In America”.
I write on a number of subjects, and on a number of platforms, so make sure that you follow me on Twitter for all the latest news and updates - @BradYoung04
Thanks for reading. I’d love to know what you think so please feel free to comment below. Also, make sure you check out the rest of my work on WikiNut. I would particularly recommend “Art Deco Buildings In America”.
I write on a number of subjects, and on a number of platforms, so make sure that you follow me on Twitter for all the latest news and updates - @BradYoung04
Resources
Information Resources
Jameschurchill.com
Conservatorblog.com
Image Resources
Image 1 - http://i.telegraph.co.uk/multimedia/archive/02303/green-velour_2303570k.jpg
Image 2 - http://upload.wikimedia.org/wikipedia/commons/5/5e/Rgc3.jpg
Image 3 -http://upload.wikimedia.org/wikipedia/commons/thumb/8/86/HTS_Systems_JCM_Manufacturing.JPG/640px-HTS_Systems_JCM_Manufacturing.JPG
Jameschurchill.com
Conservatorblog.com
Image Resources
Image 1 - http://i.telegraph.co.uk/multimedia/archive/02303/green-velour_2303570k.jpg
Image 2 - http://upload.wikimedia.org/wikipedia/commons/5/5e/Rgc3.jpg
Image 3 -http://upload.wikimedia.org/wikipedia/commons/thumb/8/86/HTS_Systems_JCM_Manufacturing.JPG/640px-HTS_Systems_JCM_Manufacturing.JPG
No comments:
Post a Comment