Financial Considerations of Starting a New Company

| April 9, 2015 | 0 Comments

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Starting your own business can cost barely anything, or it can require more money than you’re able to get hold of. If you set up as a freelancer, you often only need a desk, a phone and a computer with an internet connection. But many other businesses have more complicated requirements, especially if you need to manufacture and sell a physical product. There are lots of financial aspects you need to think about if you want to start a business, and it’s essential to do so before you make any significant decisions. While you’re doing market research, think about some of these major costs. Find out how some of your potential competitors handle the following issues, especially when they began as a small startup like you.

 

Budgeting and Raising Funds

With any business, you need to budget your costs and work out where the funds are going to come from. There are lots of options for financing a business if you don’t already have the means, but that doesn’t mean any of them are easy to access. One option is a bank loan, for which you’ll have to convince your bank that your business will be successful, and you can pay back the loan. Some people look for angel investors or even hold fundraising events with friends, family and business associates. Crowdfunding has also become a popular way of raising money in recent years, but you will need a clear angle that makes your business different. You need to have a detailed business plan to get people interested in investing in your company.

Suppliers and Manufacturers

If you want to sell a physical product, you need to think about the cost of making or buying it. You’ll need to find wholesale suppliers either for products you want to sell or for the materials you need to make them. These will be a significant part of your overheads that you need to factor into your finances. You’ll need to think about how to balance costs and quality to sell a product that customers are happy with.

Insurance

Insurance is another essential consideration for your business. What sort of insurance you need will depend on what your business does. For example, many companies will need protection for their business premises. But some will need specialist insurance policies like fleet insurance from http://insure-fleet.co.uk/car-fleet-insurance/. You need to consider what your business processes involve and the risks that you could face. Some of the types of insurance you might need include liability insurance, worker’s compensation and property insurance.

Business Premises

Of course, you’ll need somewhere to run the company from too. Many people who launch a small business start off running things from home. But you may soon find that you need a proper office, even if it’s just an ex-storage container or a small room in an office block. You’ll need to think about the rent and other costs associated with it, and perhaps even the price of purchasing somewhere.

Starting up a business involves a lot of costs, but could be lucrative if you go about it in the right way. Just make sure to do your market research before making any big moves.

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Category: Investment

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