At Sleek, we’ve done it lots of times, we help entrepreneurs like you, get going, get ahead and succeed. So, let’s find out ‘how much does it cost to start a business’
Don’t shy away when it comes to talking about start up costs, investment and money.
This is all part of your new business and we’re here to make it so easy, you’ll wonder what all the fuss was about.
As an entrepreneur, it’s easy to get excited and neglect some of the important details that will kick start your business.
But believe us, it’s much needed.
One of the ever-important details you need to work on is calculating how much money you will need to invest in your new business.
These are called start-up costs. They are the expenses you will need to invest in before your new business starts to sell.
How much does it cost to start a business?
It can be easy for a business to overlook start up costs when you are always looking at the big picture.
This is why careful planning and detailed accounting is needed here to collect the estimates to calculate how much you will need.
While reducing your startup expenses is wise, there are some expenses that you can’t ignore to cover the basics of business operations and ongoing costs.
From our experience helping new businesses, we estimate approximately $3000 to $6000 is needed to set up a small business in Australia.
Your business is different from other businesses, so you may require less investment for your start-up.
1-2-3 steps to calculating how much to start a business
Follow these steps and you’ll be able to answer the question – how much money do you need for your new business?
Step 1 Create an excel spreadsheet
If excel isn’t your thing, use a piece of paper, or even notes on your smartphone.
Write down all the items and expenses that you will need to set up your business.
To get you started, here are some examples of start-up costs:
- Business registration with ASIC (we can help you there, business incorporation will cost $538)
- Purchase of inventory
- Purchase of computers and software
- Staff hire costs
- Rent for premises
- New website
- Advertising and marketing costs
- Vehicle and equipment purchases
- Legal and/or consultants fees
Not all these expenses will be applicable to your business, so choose the ones that are and add other startup expenses.
Step 2 Research your start up costs
Once you have this list of expenses, it’s time to do some research to fill the gaps.
Chances are you won’t know how much some of your startup expenses will cost. The internet will provide most of these to help you in your calculations.
If you are unable to find out the cost of an expense, make an educated guess. You want as close to a realistic figure as possible.
Use this research to explore other expenses that you have not thought about. It may be wise to ask a work associate, fellow entrepreneur or an accountant as they may have a better grasp of business expenses.
We’re happy to help, so use our chat box to ask a quick question.
Step 3 Calculate your startup expenses
You’re almost there!
Complete your spreadsheet with the figures you have gathered and calculate the total.
You now have your new business start-up costs!
We highly recommend you add a couple of months of operating costs to this calculation as chances are it will take a little time before your new business is generating an income.
We like to err on the side of caution at Sleek.
We’ve added a few little tips about start-up costs
- Don’t be surprised if your start-up expenses grow as your business grows.
- Distinguish between essential expenses and non-essential costs – essential costs are the expenses that are absolutely necessary for the business. for example, a website for an online business. This way if capital is tight, you can remove the non-essential expenses.
- Once your business starts operating, it will become clearer what your expenses are, so you may need to adjust these estimates. You’re also learning more about your business.
It is easier than it looks to calculate how much it costs to start a business. Get started and take the time – you’ll be pleasantly surprised at how much better you will understand your business.
If you get stuck, Sleek is here – we work hard to help our entrepreneurs every step of the way.