In this competitive business world, starting a company is challenging if you don’t have enough experience.
Starting a business from the zero-level requires rigorous planning and consideration— particularly in terms of start-up costs.
If you’re in the initial stages of establishing a business and want detailed information about start-up costs, keep reading this helpful guide to understand how much start-up costs and how to reduce them.
In our detailed guide, you’ll find
- What is the cost of establishing a start-up?
- How to calculate start-up costs?
- Tips to reduce start-up costs
What is the cost of establishing a start-up?
As per a US small business administration report, to start a microbusiness or small company, owners must have $3000. Also, a home-based franchise costs between $2000 to $5000.
Although it is a good indicator of what you may pay for a business to get on its feet, but within a year, you’ll see the start-up costs may be considerably more. For instance, you need to invest in effective business software and communication tools to streamline workflow.
RingCentral’s offers an all-in-one communication solution that reduces costs. With the desktop and mobile apps, you can enjoy all applications in one unified tool with one payment instead of paying particularly for one video conferencing tool, messaging app or phone app.
Since every business has its own needs, so to understand start-up costs, business expenses are significantly divided into two categories.
Investigatory Costs: While establishing a start-up, you’ll need to go through the investigation process; however, it involves hefty costs in some cases. As an entrepreneur, you need to find out the potential of your idea and whether anything similar in the market exists.
Pre-launch Costs: A start-up incurs many costs e.g., creating a website, promotion costs, communication tools, digital infrastructure installation like Wi-Fi and phone system.
Investigatory and pre-launch costs are crucial for your company to prepare for launch. However, many of these costs may be for one time, but you’ll need to consider the ongoing costs that help business stand.
How to calculate start-up costs?
As discussed earlier, when it comes to figuring start-up costs, you need to find out one-time business expenses as well as ongoing expenses. So, to calculate start-up costs, create a budget template to keep track of all kinds of expenses.
This budget template will provide a detailed breakdown of initial costs and ongoing expenses.
1) One-Time Costs
- Website development
- Broadband set-up
- Business phone deployment
- Office Furniture and other supplies
- Deployment of equipment
2) Ongoing/Recurring Cost
- Rent (if you’re renting a place for start-up)
- Product Shipping
- Software update
- Business insurance
- Equipment Servicing
Some of these costs may vary based on business needs. However, there are some “fixed” costs for a business, such as rent which will be the same for every month. So, to prepare yourself for future expenses, try to estimate organisational costs for the next few months.
Structuring these expenses for initial few months helps to increase your profit margin. Being able to keep your rent and other expenses in order allows you to relax and not worry about financing and spend more time focusing on expanding your company.
Tips to reduce start-up costs
1) Streamline business application
As an entrepreneur, you’ll need to start everything from scratch. It includes deployment of software, equipment and other tools & services. But for a small business and start-up, it is hard to manage costs. Try a complete business solution of RingCentral.
RingCentral’s business solution consists of messaging, video conferencing and a phone app, all in an integrated form. In simple words, you don’t need to invest in multiple tools rather than you can enjoy the benefits of everything in one place. Here are the key features of RingCentral communication tools for start-ups:
- Team messaging
- Conference call
- File and data sharing
- Excellent calling features
- Mask phone numbers
2) Start Online
Renting a physical space for establishing a company is likely an expensive deal for many business owners. So, as a beginner, one of the best things you can do is start small. For instance, if you’re selling homemade gifts and you may find it doesn’t need an office or store to keep business running. So, you can launch your business online with good branding and a solid marketing plan.
Depending on the type of business, you may find moving business online to be more viable option. It not just expands the service reach but also gives a competitive edge.
When you have an online business, you can stay in touch with clients virtually by utilising the RingCentral business app. It offers an all-in-one communication solution to support your online business requirement.
3) Secure funding for your new business
As a small business, you may face difficulty accessing loans from lenders because they only consider those with a solid reputation or portfolio as a company. Luckily, there are funding options for small companies and start-ups.
- Bank Loans
- Small business loan
- Credit card
The above options are ideal if you’re finding it difficult to pay upfront costs or have an issue with cash flow to process business plan.
Why Choose Workanywhere?
Workanywhere is a leading and trusted partner of RingCentral that furnishes all-in-one business communication solutions. We offer message, video, and cloud phone solution in one integrated application. We have a carrier guide cloud-structure that helps your business to function from any part of the world. Partner with us to streamline your business workflow.