Business Costs – Setting Up A SME

So you’re taking the plunge and starting your own business? You’ve got a great concept, a brilliant marketing plan and the best spot in town to start selling it all from. So you’re set, right?

Wrong.

To establish a good small medium enterprise, you should know from the beginning, the most important plan you will make is your financial plan. A great idea is not worth much if you run out of money after three weeks. A financial plan is more than just working out your rent and stock costs, small business cost is difficult to predict, a comprehensive plan may save you money in the long run.

Buy Established or Starting Your Own Business from Scratch?
One of the first decisions you will make starting your own business, is whether to purchase a business already running or to start afresh. Of course, the benefits of an established business are many when it comes to small medium enterprise. You will have a name that is known, a customer base and records of past profits available.

However, this is often the much more costly option. Starting your own business, you will need to make a name for yourself and seek out opportunities much more fiercely. It is likely that you will have to find a shop front and put up the costs for a fit out. This can be expensive, particularly if you are looking into retail. Small business cost for an office space also escalates quickly; desks, phones and computers don’t come cheap. Perhaps the greatest small business cost will be your stock; buying established means this will come along with what you buy, but this will be factored into the price.

Getting Started – Marketing and Advertising
A friend once told me she had leased a shop to start her own small medium enterprise. When asked what she had planned, she replied that she didn’t want to say as she was keeping it quiet.

She went broke in six months.

If you are starting a small business you are going to want everybody to know about. Your marketing strategy is going to make you; be sure it’s a great one. Word of mouth is only going to get you so far. Think about newspaper advertising, the internet and mail outs. It’s also a good idea to get outside the square and consider a grand opening party. Try and make contact with as many people as you can, make sure you give them a card or flyer with your details on it and do your best to get theirs. Email addresses are a great idea; there is minimal cost in sending out a newsletter this way. Print mail outs and cold calling can reap benefits, but are much more costly ways of generating business.

The Everyday Costs.
You’ve probably already thought about the small business costs; your recurring monthly expenses. Of course there is rent, wages and utility bills. Don’t forget stock or any ongoing advertising you have committed yourself to. There is also unexpected small business cost that you need to consider.

Whatever you find your break even point to be, add another twenty percent as a safety net. Think about what could happen – you could suffer a break in, have stock damaged in transit, an equipment failure or a power surge. These are only a few examples of things that can go wrong, they do happen and they probably will, so make sure you are leaving a little bit aside for that rainy day.