Starting a new small business is filled with pitfalls but if you know the cost up front, it might just be possible. Here’s our list of the essential expenses.
Starting a new business is VERY hard. In fact, around 90% of new small businesses fail within their first few years. That’s why it’s so important to know the cost to start a small business.
Accurately calculating these relative costs before you invest is key, according to Forbes, so we’ve broken it down with this handy checklist.
You can’t really operate a new business in 2019 without a functioning website and domain. Your potential customers are going to expect to get information about your business with a few clicks.
Hiring a professional web designer is ideal, but according to experts could cost around $7,000 in your first year.
DIY website building services like Squarespace are much cheaper. The downside is it’s a lot more work and will likely come out less professional and less unique because your site will be based on a template.
This is where you need to evaluate your skills honestly. Do you have an eye for tidy design concepts that can communicate information to customers efficiently? And how willing are you to invest a large amount of time learning web buildings skills?
If this is in your core competency, a do-it-yourself approach is best. If not, you want to invest your time building the parts of your business you understand.
If there’s anything I’ve learned as a small business entrepreneur, the internet and social media have not replaced the need for old fashioned business cards.
Potential clients may want to swap Instagram handles, but the number one request I get at networking events is to hand over my business card.
The main thing to know is that your business card is a reflection of your brand. So just like your website, the design is everything.
This means you want to stick to the number one rule of design: simplicity. Both the look and the message on your card should be straightforward.
Business cards are also like websites in that you can get the best results by hiring a third party. However, cheaper template-based cards are easy to order as well. This kind of service can charge between $15 and $60.
The best attitude when starting a new small business is humility. Realizing how much you don’t know is crucial.
This means business mentoring is essential before you invest actual cash in your ideas.
Forbes claims these services can run between $400 and $4000. Or even much more. It really depends on how many areas of knowledge you need help with.
But remember, the biggest cost to start a small business is the wrong advice. Bad input can derail your idea before it even gets off the ground.
Fortunately, there are now lots of free business mentoring tools available on the web.
We just gave our detailed review of Google’s new small business tools. They could be considered essential for anyone concerned about the cost of starting a new small business.
The bottom line here is to always take advantage of free resources when possible.
Now set your goals
There are now nearly 40,000 single person small businesses in America bringing in over $1 million a year, according to Forbes.
Many entrepreneurs are deciding corporate life lacks the flexibility they want, and also may not offer the most money in the long run compared to a successful small business.
If you’re thinking of leaving your job to start a small business, experts advise you need to aim to earn 130% of your old salary to cover the cost of paying your own benefits.
However, the cost to start a small business has never been lower since entrepreneurs can use the web to bootstrap their new venture from home and market themselves on social media at no cost.
Still, it won’t be free. Experts say the base cost is between $5,000-$10,000, but that all depends on how much you can save with DIY projects like putting together your own website.
And as always at Velocity Capital, we offer competitive alternative financing for interesting new ventures, because entrepreneurs have never been more empowered.