How Much Does It Cost To Start A Business?
If you’re reading this article, then I figure you have a job that you want to leave or maybe you want to try another business. Perhaps you have very little money or a fair amount in savings to get started. There are so many different businesses to start but I’m going to focus on a few that cost more time than money.
The Bare Essentials:
The first cost of starting a business is time. You need time to do research, to learn new skills, to implement, to evaluate your results and then to do it all over again, again and again.
But the ability to use time isn’t free. You need somewhere to live while you’re setting up this business. Internet, phone and food to survive. What are your monthly expenses? How much can you reduce them to the bare essentials while you get your first business off the ground? What? You think you didn’t have to cut back?
If you have a job, your bills will be paid but your time will be severely limited. It’s hard to work on your business after a full day at your job. You’ll have less energy and perhaps you’ll miss days entirely.
It’s a trade off you’ll have to think about. If you have savings, is it worth it to live on and focus on the business, or keep the job and work on the business in your spare time?
The Cost of Starting A Business:
Depends on the business. If you are looking at selling physical products then you are going to need A LOT of money upfront. Designing the product, finding manufacturers, paying the manufacturers to create an inventory for you to sell. Huge upfront investment.
But what if you want to sell a service or in other words, your skill? Then you’ll be happy to hear that the startup costs are very very low. In fact, you don’t even need a website when you first start out.
What you need is time to develop, learn and practice the skills you need to succeed. The obvious things you need to learn are how to actually deliver the service well enough that people are happy to work with you. Sales skills so you can convince others to work with you and overall develop the right “business mindset” that will pave the way for your success.
Finding clients will be your biggest non “bare essentials” cost you experience at this stage. Luckily, there are fantastic websites that let you find ready to buy customers then and there for cheap. The two biggest ones are Fiverr and Upwork. It’s free to join and set up a profile. So if you’re looking to startup with as little money as possible, they’re a good choice.
Though in exchange for money, once again, you are trading time. You can speed it up by having a small budget of $300 or so but even then, it takes time to build your profile, especially on Fiverr.
And upwork and Fiverr are only two ways you can find clients. There’s Facebook, forums, cold calling and a whole lot more free methods and paid methods that cost more than $300. For example, the copywriting community copychief costs $1200 a year now. But it’s a great source of high paying clients. How much are you willing to invest at this stage?
Other than that, there are few other costs. You don’t have to form a corporation to start a business, you can start for free as a sole proprietor. You don’t have to register with any agency, private or government, to get started. All you need to do is get started, decide on a business, start finding clients and get revenue.
What I Recommend You Spend:
When you’re just starting out, what’s important is learning the skills you need to be a PREMIUM provider of whatever you do. You don’t want to compete on price, you don’t want to get clients with discounts. You want to be so good that clients WILLINGLY pay you a princely sum because you end up making them much much more than what they pay you.
If you can spend a lot of money, I recommend spending it on a mentor or a course that will teach you everything you need to know. Ideally, you should find a mentor who’s “been there and done that”. This will slice years off your learning curve, truly, if you are taught by someone. What took them 4 years might take you 3 months.
If you can’t spend the money on a mentor, then you’ll have to learn your craft from free sources. It will take a lot longer. If you value your time, this isn’t the way to go. It can take years to master a skill alone, I’ve known entrepreneurs that needed 3 years to “figure things out”.
And I recommend you spend $300-$500 on finding clients for your new business. You don’t have to spend all this in one month but at least buy the $10 a month membership on Upwork and the equivalent on Fiverr. That’s the minimum investment, the premium memberships give you a number of benefits that will help you on the platform.
If you’re wondering how much it’ll cost to start a business, the ultimate answer is: it depends.
If you have money to spend, spend it on a mentor/resource that teaches you how to deliver your service at a top-tier skill level. This will ensure you can deliver good results that get you paid very very well.
And spend money on getting clients which won’t cost you much since beginner places like Upwork and Fiverr are cheap.
If you don’t have the cash, focus your time on learning the skill on your own and still join Upwork and Fiverr. They are your best bet for your first clients and revenue.
That’s how much it costs to start a business.
Good luck and spend your capital wisely on your new business venture.