Small Business Advice: Determining Start-up Costs for Your Business

I wish I can tell you a ballpark figure of how much it would cost. But without knowing your specific business venture, it's virtually impossible to say exactly how much it would cost to start your business. But I do know a variety of things you should consider in determine what that cost would be for you.

Type of Business: One of the first things is to decide what type of business you are going to be in. Brick and Mortar - that means you have a physical place that you rent or purchase to start a business. Startup costs are much higher for this type of business and typically require loans to get started.

Internet Business - most of your business happens online as is true for me. Startup costs can be darn near zero, but there some things to consider nonetheless. More on that below. Bricks and Clicks - Your business happens both offline (in a physical location) and online. Startup costs will depend on which side of the business you start with.

There are others like MLM (multi-level marketing) where you sell other people's products etc. which I won't go into here.

First, do Your Research: Before you start any business, I would recommend talking with someone who has already been down that path:

Find someone who has already started a business such as the one you have in mind. Ask them what costs are involved.

Check out your local Small Business Association and they can probably help estimate the costs or help you find someone in a similar business who can help you estimate the costs.

Libraries and web sites are great sources of information on the business you would like to start.

Brick & Mortar Expenses: If you are venturing into a brick and mortar type business, meaning a physical location that you are purchasing or renting, then you will need to consider things like inventory, capital loans, employee wages, equipment, utilities, licenses, permits, office supplies, insurance, signs, lease or mortgage.

Other Expenses: Remember, you don't need all of this to get started, but I figured it would be good for to you begin thinking about the different cost aspects. Most people start their businesses while still employed as I did so that they can fund their startup costs comfortably:

Marketing: Your business cannot survive without marketing efforts. This may be offline where you mail out sales letters, postcards, or having your marketing materials and ads etc. online Registering Your Business Name Registering Domain Names: A domain name is simply the name of your web site.

Business Email: Having a free service like AOL, Hotmail, and Yahoo makes your business come across far less professional. Yourname@yourbusiness.com is much more professional

Setting up your web site - hiring a web designer or purchasing the software to do it yourself, purchasing domain names, and web hosting.

Business Cards - You can get those very inexpensively at www.vistaprint.com

Phone/Fax - I rarely ever get faxes but I still have an eFax account at www.efax.com so that faxes come to my email.

Online purchasing software: If you are planning to allow your customers to purchase online, you will need something like www.1Shoppingcart.com. Software/Hardware: Word processing etc.

Business checking account

Accountant: to manage your finances and do your taxes.

Associations/Memberships/Business Coaching: Being disconnected and on your own is a recipe for failure. Join an organization or group where you're connecting with like-minded people at least monthly. I had a business coach when I first started and I have one even today. With the above list, you can begin to get estimates on what it would cost you to start your business. But first, connect with someone who is in a business like the one you one you'd like to start. Preferably someone who is successful at it. As I said earlier, what you need to start depends on what type of business you are starting.

I started my first business (teaching leadership workshops) with nothing more than the knowledge in my head, PowerPoint slides and $20 to make copies of handouts each time I did a workshop. My marketing was public speaking which didn't cost me anything. In fact, it was pretty cool to actually get paid to market myself by speaking at association meetings.

You want to be sure you have at least 6 months worth of business expenses saved up. Twelve months is more appropriate and that is aside from your living expenses. Most people start their own businesses while they are still employed. I started my first business long before I quit my job as well. My job funded my dream. When my dream took off, so did I. :-)

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