The True Cost of Setting up a New Business
Few would think that setting up a new business is a cheap ordeal. After all, building a sustainable company comes with many things in mind to consider, and each one of them has a financial cost attached to it. In the end, it can get overwhelming, and suddenly expenses are appearing out of thin air as the company begins to grow. Unfortunately, company’s collapsing under these circumstances is not uncommon.
It would be handy to know the true cost of setting up a new business, but the truth is, there is no ball park figure. It simply depends on what you do and how you do it. However, there are a few things to consider that might contribute to the cost you end up with.
Of course, the most common cost people associate with staff comes in the form of wages. There’re no surprises here, staff need to be compensated fairly for their work, but this can go a variety of different ways. They could be paid by the hour or by commission, the latter meaning that the more work they do, the more money they make. If you’re setting up a business to this policy, costs here will fluctuate depending on their productivity.
However, wages aren’t the only associated costs with hiring staff members. If you’re working in the food industry for example, you’ll need to pick up different insurance models for health and safety etc. Different insurances come with different industries, many relating to what the conditions the staff are working in. Additionally, as soon as you become an employer you’ll need Employer’s Liability insurance too, and you can be fined £2,500 every day if you don’t have it. Make sure that as soon as staff are hired, you address these costs.
Many businesses quickly get overwhelmed by their workload, especially if they’re growing at an exponential rate and have numerous clients to satisfy. The body of work that comes in simply can’t be assigned to all the staff members who are bogged down already. Of course, additional staff can’t be readily hired either due to the expense… at least not permanently.
If you’re new business takes off with a boom and there are many clients to appease, then outsourcing work can be a viable, if costly solution. This means you can take on freelancers and contractors to pick up some of the work that your business just can’t take on right now. They’ll do it in your name and meet those deadlines you need, but of course, it’ll come with a financial cost.
If your new business has a building all its own, then many costs can come into effect here. In many ways, it can be like leasing out or buying a residential building, in that your responsible for getting broken and faulty machinery fixed and in order, or at least reported to the real owners. You’ll likely also be paying all the bills too, which will be a hefty fraction of your overall costs.
Of course, you may also need to replace faulty equipment here and there, and use services like JLA to get those replacements in quickly and affordably. Whether it’s laundry, catering or heating machinery, such companies will outfit business premises in the most convenient and cost-effective way possible. In the end, though there are affordable solutions that are readily available, your utility costs are always something to keep in mind.