If you plan on starting a small business
(rather than purchasing an existing business), you must weigh up the
advantages and disadvantages of this choice. You will find that by starting
your own business your capital outlay can be gradual, there are no pre-existing
problems with the business, you pay nothing for goodwill and you will
have the satisfaction of creating something new. However, you must do
your market research to ascertain that there is sufficient demand for
your products and/or services and ensure that you have a competitive
advantage, e.g. you will provide products or services to your customers
which are superior than those provided by your competitors.
On the other hand, creating your own
business means that you will have to do all the initial tasks of setting
up the business, including matters such as finding premises, meeting
legal requirements and obtaining the necessary permits and licences.
You may have to put aside some capital funds for your living expenses
until the business starts to produce a profit when starting a business.
The amount of start-up capital you
need, will depend on the level of sales required to achieve your desired
profit. For example, the higher the level of sales, the higher the stock
purchases, the more fixtures and fittings and possibly the more staffing
required.
You need to make a comprehensive list
of the assets and other expenditure required to start-up your business.
You need to research the type of assets required – the type of
financial software most suitable for your type of business, plant and
machinery, motor vehicles etc. You need to research the costs of assets
and suppliers of those assets. There may be some assets that you already
have, which will save you having to purchase them.
TIP:
How do you keep start-up costs to a minimum?
To keep start-up costs to a minimum,
it is worth shopping around, both for better prices and for other alternatives
such as office furniture from second hand suppliers.