Brace yourselves because this may come as a shock to some of you. Are you sitting down? Good.
When you own and operate a business all by your lonesome, you don’t actually get to keep all of the money you earn. Shocker, right?
People who are already in business for themselves learned this awhile ago (hopefully), but this could be news for those fantasising all the livelong day about being their own boss. So here’s a few things you’ll have to shell out some cash for before getting a pay cheque.
If you intend on opening a brick-and-mortar business, then you’ll have to buy, lease, and/or build it. Starting out, it will probably be less expensive to lease an office space or building. Depending on the arrangement, you could be looking at spending a few hundred or a few thousand pounds a month on rent. On top of that, you have to pay basic utilities to keep the place running such as electric, gas, and water.
Depending on your type of business, you could spend quite a bit of money on the equipment needed to run it. At minimum, you would need a computer and telephone to be able to communicate with customers/clients and to keep records. In addition, you’d need to pay for internet and phone services every month. Other expenses for administrative duties might be necessary as well—such as cloud accounting software and bookkeeping software.
Every business owner needs to keep money aside for marketing purposes. Today’s marketing strategy may be less expensive than (October 02, 2015)’s, but it can still be costly. Create a website to increase your business’ success. Expenses for this include domain and hosting as well as a web developer if you don’t intend to create the site yourself.
Email campaigns are useful for spreading the word to current and potential customers. Utilising companies that provide this service usually costs a nominal fee every month. You can create accounts for free on social media sites to help advertise yourself, and you can also take advantage of their paid advertising.
Incorporating traditional methods into your marketing strategy doesn’t hurt either. Examples of this are snail mail advertisements, signage, and television commercials.
Whether you intend to be a sole trader, limited company, or corporation, you’ll have to set aside money for taxes. Taxes may be due once every fiscal year or during every business quarter. It should be noted that credit cards, debit cards, and insurance policies are wise financial business investments which require regular payment.
No matter how hard to you try to prevent them, unexpected financial problems will crop up. They may appear in the guise of bank overdraft fees, late fees on bills, or equipment in need of repair or replacement. A wise business owner knows to plan ahead for these surprises.
Having the freedom to work when and how you deem fit seems a romantic affair. Spend time thinking all these things over to see if you’ll be able handle the stress and demand before venturing out on a business journey.Business & Finance Articles on Business 2 Community