How much does it Cost to Start your Own Business?
What is a start up cost for a business? On the average, how much money do you need to start a small business? What are the monthly costs of running a business?
Starting a successful business is the dream of every entrepreneur. This desire comes with huge expectations on the growth of the business as well as how much profit the business will attract to the owners.
However, an all too common hurdle which needs to be surmounted is the issue of financing the business. A business can either be underfunded or adequately funded. However, questions regarding adequate financing for a business are always raised. One of such is the topic under consideration; “how much does it cost to start a business?”
What are the typical business startup costs?
How much capital is needed the first year of a new business to be successful? We will seek to find out how much money is required to properly fund a business venture. There are several types of businesses, and most of these require financing to start.
The funding required largely depends on the size or scope of the business, as well as the type of businesses, as there are businesses which require more funding to successfully kick-off than others. These types of business are known as capital intensive business ventures.
Ultimately, the cost of starting a business will depend on the type of business engaged in. So how much money does it take to start a small business?
Types of Business + Starting Costs Calculator
As briefly stated above, the type of business engaged in will determine the cost implications of the business. Businesses are of different types, however, all businesses can be categorized into 3 major types.
These include the small businesses, the medium sized businesses as well as large scale business organizations. Sole proprietorships are categorized under the small businesses, while other business types such as corporations and LLC’s (Limited Liability Companies) are categorized under the medium scale businesses, and also the large scale business.
Corporations are mostly large scale businesses.
The Cost of Starting a Business
Do you how much it cost to start a business online? The cost of starting a business is relative. It largely depends the type of business venture you are interested in starting or establishing. To have an idea on what it takes to start a business, you will need basic information on what it cost to pay for registration, tools, machinery and equipment among a long list of other requirements including buying, renting or building a business outlet or office space.
If the nature of your business is online, equipment still need to be purchased, with the option of either renting an office space or working from. Money has to be expended on the purchase of computers and other related equipment and accessories. An important way of knowing the cost implications of starting a business is to have a full knowledge of all the requirements needed to start or float the business.
How to Estimate the Cost of Starting a Business from Scratch
Depending on the type of business, the cost implications may range from a few thousand dollars to millions or billions of dollars. There are other forms of business establishments which buy into existing businesses such as franchises. The cost of owning a franchise can range from $25,000.00 to $5,000,000.00 depending on the franchise. There are major franchises which have multinational presence.
Buying into these types of franchises can be quite costly. Some of these include KFC, McDonalds among several others. There are also small scale franchises which require considerably lower franchise fees among other requirements.
Acquisitions of other existing businesses are also made by others. There are businesses which are established to be later sold after having built the business to full functionality. People may do this for a lot of reasons, but the fact remains that profits inspire all of these actions. The cost of purchasing an existing business may range from a few thousand dollars depending on the size to millions or billions of dollars.
Get Information from People in Such Businesses
Whatever type of business you are interested in starting, getting information from the right sources can be invaluable. One of such places to look is finding people/entrepreneurs with successful businesses in the same field of interest. Although you may be seen as a competitor by those within your geographical territory, you can get this information from a entrepreneurs outside your geographical territory about the cost of starting this business.
Look for Suppliers within Your Field of Business Interest
Suppliers are constantly eager to offer their services to new clients. You can take advantage of this by asking them the cost of materials needed for starting your business. This is a good way of finding out the cost implication of starting your business. This option is very reliable because the quote given by them is always up-to-date, as they include the current cost of equipment and tools required to start/establish your business.
Consider the SCORE Option
The Small Business Administration (the SBA) which is a sponsor of SCORE (The Service Corp of Retired Executives) is provides a ready alternative to easily finding out the cost implications of starting a business venture. It has a pool of retired and experienced business men who are paired to people seeking information on how to start up their businesses, including the cost implications. These experts guide you through the entire process of setting up your business, as well as referring you to resources which will be of immense benefit. To find out more, visit http://www.score.org .
If your business is a product based business, then you may want to consider getting a product liability insurance. However, this can significantly increase the cost of starting a business as several product liability insurance programs are beyond the reach of small scale businesses grappling with adequate financing for their businesses. However, you can research cheaper product liability plans as a way of significantly reducing your startup costs. Go to online to find out more on this.
How much does it cost to start a business? An attempt at answering this question has been made, with the aim of providing ready information for persons in need of a clear picture of the cost implication of starting a business. As has been highlighted above, cost is relative to the type of business you intend to start.