Hidden Costs in Getting Your Start Up Off the Ground

Starting your own business sounds like a great idea. Finally you can be your own boss, work your own hours, make your own decisions and so on. You then plan and decide on what business you would like to do, the location you want to be in and even the name of our company.

You are ready to go, or so you think. You thought you saved enough money to cover all the expenses that come with starting your on company but then those pesky hidden costs raised their ugly heads and start eating into your savings.

It happens all the time so before you do a start up there are some hidden costs you need to prepare for and be ready to pay. Here is a list of some of those hidden costs.

Staff Training—They may already have experience but they do not have experience in the way you want things done or the way they need to be done. You will have to provide some form of training so they can do their duty correctly

Business Insurance Premiums—This differs from business to business as liability differs between different business operations. What this will cost you will depend upon the type of coverage you want and what you are required to have.  Here is how you can save money on insurance premiums.

Taxes—What most new business owners do not realize is that they may have to pay their taxes whether they have income or not. Some companies have to do a prepaid tax, so you need to watch out for this cost. It can really hurt

Permits & Licenses—you wouldn’t believe this but if you own a bar or restaurant you have to have a music license to ply music in your establishment. Permits and licenses are sneaky so you better research and find out all the ones you need to have before opening day.

Processing Fees—Even processing your customers’ credit cards come with a fee. This fee usually is in the 1-3% range on every transaction. I t is okay to shop around the different banks to see who will give you the best rate.

Deposits—If you are a new customer, don’t be surprised if the utility companies demand a deposit for their product service. The electric company, gas company and other utilities may not trust you like other people do so be prepared

Hidden costs always arise so don’t think it won’t happen to you. The experts say that you should add another 20% to your start-up cost estimates in order to be better prepared to handle them. These nuisance costs can make things really difficult for you if you do not get ready and set some money aside to pay them

Creative Ways to get Funding for Your Start-up

get funding for your start-up

Money, it is what can keep a would be entrepreneur from becoming a business owner.  When you have the desire to start a business but lack the capital there are several things you can do to help fund your start-up.  Before you start looking for financing you need to have an effective business plan along with financial statements before any potential investor will give you the time of day.  Bank loans for business are harder if not impossible for many potential business owners to secure, here are some other ways to get funding for your start-up.

Crowdfunding

This is a new way of securing funding that the internet has made possible.  Instead of having just one investor you can have multiple investors all contributing various amounts of money to help you get your business of the ground.  Websites such as Kickstarter or Indiegogo can help you kick off your funding campaign.  You put together a description of your business, your goals, how you plan to make money along with how much money you need and how you plan to spend it.  Bear in mind that most Kickstarter campaigns remain unfunded, you need to be very creative in your campaign to attract both money and attention.  Here is how to set up your own Kickstarter campaign.

Venture Capital

Venture capitalists are money guys that look for start-ups to invest in, and for many these are the ideal type of investor.  There are downsides to working with venture capitalists, first you need a sound business plan in place and they usually look to invest in larger start-ups.  Facebook and Twitter built their businesses using venture capital while the average neighborhood plumber or restaurant owner doesn’t.

Find an Investor

Investors work like venture capitalists only on a much smaller scale, think of Sharktank as an example.  Just like on Sharktank they are going to take ownership of a portion of your business.  In effect you end up with a silent…or not so silent, business partner.  This isn’t necessarily a bad thing as you keep control of your business, you not only get money but oftentimes you get a mentor as part of the package.

Small Business Loans

For many entrepreneurs this is the first place you go to when looking for business financing.  The government has put together a whole department to help you get business funding.  The problem lies in cutting through the red tape and mounds of paperwork to qualify for a loan.  For a first time business owner with very little credit history a small business loan may not be possible.

Self Financing

If you have a solid credit history or you’re a home owner that may open up the possibility of financing your own business.  This is risky and be prepared to be obligated to pay back these loans whether your business meets income projections or not.  If you can make it work it can be the best option, you have complete control over your business without unwanted partners.

Three Steps that Will Take You from Start-up to Success

Three Steps that Will Take You from Start-up to Success

Each and every entrepreneur had to start somewhere, but what sets the successful ones apart is the path they take and how they overcome obstacles.  It is not the strong that survives it is the most adaptable and nowhere is this truer than in business.  Here are three steps to take that will get you from start-up to success.

Make a plan

You have already been bitten by the entrepreneurial bug and now you need to figure out what that looks like.  Dream big, you want to be the next Richard Branson…good!  Now make a plan on how to get there.  Many entrepreneurs have the drive to get started but what they lack is the follow through.  Many get bored quickly and move on to something else.  Writing a detailed plan allows you to hold yourself accountable and that leads to progress.  Without a detailed plan all you have is a dream and everybody has those.  People with written goals are far more likely to achieve them, here is a Harvard study that backs that up.

Know what you want but be flexible getting there

Once you have started making your plan you need to prioritize the tasks that will get you there.  Many business owners get caught up in the day to day minutiae and fail to keep an eye on the big picture.  Focus your efforts on what will create revenue and allow you to grow to where you want to be, outsource the rest.  If you try doing everything yourself nothing gets done well.  While in the beginning you will need to plenty of the work yourself, but every start-up reaches critical mass and then it is time to hire.

Be prepared to fail

The road to success is paved with failure and every entrepreneur from Edison to Bill Gates has failed.  That doesn’t make you a bad entrepreneur but not learning and growing from your failures does.  Most entrepreneurs embrace risk, otherwise they would still be sitting in an office working for someone else.  Mistakes are not something you can avoid so take them as learning opportunities.  Learn quickly and often!

You created a business and put together a plan with the goal of going and thriving, until you reach the point where you can step back because your business is self-sustaining.  Don’t be afraid of failure, failure will only bring you closer to your goals.

Site Footer

Copyright Spider ITX | All Rights Reserved | Privacy Policy