Brilliant Business Idea but Worried about the Start-up Costs

Sometimes, people wanting to better their lives think about running a business and have some ideas that may be a game-changer. Even when the idea has a lot of potential, there’s still the big question: how can you bring things together and for how much?

Business plan

The very first step to getting your business on the right path is to draft up a whole plan to bring your ideas into a working business model. Consider discussing with an industry association, accountant, and financial adviser to iron out the more technical details of the plan. Their output would help you have an idea of the projected costs you will incur and the starting capital you need, which may be either savings, the amount of money you have to take out in an advance, or funding you would seek out from investors.

You will also need to conduct market research to ensure the viability of the product or service you intend to pursue for your business. Hiring a solicitor can aid you in managing the legal hurdles as you prepare to open the business. 

Sign up for an ABN and a business name with the Australian Business Register. While the ABN can be acquired free of charge, a one-year registration of the name is worth $35 while a three-year term is at $82. They apply to both sole traders and companies, but registering companies must pay a company fee starting at $479. You will also have to apply with the ATO for GST, and permits from your local government. If your prospect is in the food and beverage industry, account for application of health and food serving certificates. 

Wired business

In the age of e-commerce, some business experts may recommend factoring the costs of a Google Business listing and building a website, primarily through a professional web developer. Unless the prospective business owner has some good website development skills, that alone adds much to a projected start-up cost. Some digital marketing professionals claim that developing a business website with just one page can cost $2,000, and up to $3,000 for a website with eight to 16 templated pages, plus additional costs to make the website easily accessible on mobile devices. You must also factor in the annual hosting charges for a URL domain service, email hosting, website maintenance, and other online tools such as SSL encryption and software automation.

Location

The place where you will establish your business is key to attracting as many customers as possible, and whether your location budget can afford it. You need to first canvass the prospect commercial locations to identify the monthly rental rates and the security deposit. Even if the location is in an area with a good degree of customer traffic, make sure that your planning and budget accounts for, among others, the fitout, logo and signage, utility linkages, equipment installation, and operating permits. The fitout expenses may also include costs from the interior design, construction materials, and labour rates. 

Profitability

In line with the expected location of the business, some business coaches suggest that the business plan and marketing research note down variables such as the potential customer’s income bracket and projected costs to bring a product or service to the customer. Plan out the trading hours to take advantage of the customer traffic in your area. 

In drafting the business plan, you must identify the potential break-even point while drawing out the projected sales and profit margins, and cashflow. There may be a need to have wiggle room for unforeseen circumstances; some finance professionals claim it is normal to overestimate costs but at a realistic level to prevent surprises. 

Marketing

Promotion of the new business may proceed alongside the development of its location. Aside from the website, the promotional aspect of your business plan should cover funding for graphic design of the company logo, official corporate stationery (business cards, brochures, etc), and paid advertisements on print and digital media.

Operations

There’s much to deal with in the operations component of your business plan. If your business has a physical location, your blueprint should have secure space for an office, with budget set aside for office furniture and equipment including computers, stationery, and other office supplies. A working phone line and internet connection, EFTPOS or buy now pay later terminals, CCTVs, and cybersecurity protection is also important.

Some businesses may have transportation functions requiring official vehicles. Your plan must have details on acquiring fleet vehicles on lease or outright purchase, with the necessary insurance and maintenance arrangements. Plan ahead as well for possibly decking them out in official livery, if the business’ function requires full representation.    

Staff

If the manpower complement would be initially limited to the founders working the front-end and back-end functions, arrangements may be possible depending on their pay structure. However, if the business does show potential for growth and warrant staff hires, you have to be prepared for other variables. 

Your business plan must factor in the costs of hiring new staff. The items to prepare for include the expected pay scale for the employee, government-mandated benefits, health insurance, tax deductions, and superannuation contributions. Corporate training programmes, safety/first aid equipment, and investment in staff uniforms are also important. The plan should also cover the establishment of a corporate payroll account with your preferred bank; you have the option to arrange for your employees to have a payroll account linked to that account. It may even be a bonus if the employee already has an account in that bank and enroll it on the company payroll.

An accountant will make the difference in keeping track of all your expenses and tax returns.    

Backstop

It is highly prudent to not sink every dollar you have into the venture. To this end, you need to have sufficient reserve funding to cover possible emergencies. Plan ahead as well for business insurance variables, including income protection, stockholdings, and business funding.

Some may claim even the most successful operators out there started from humble beginnings. If you have a bright business idea, careful preparation and financial acumen will go a long way.

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