Contents
Do you have a business idea you’re itching to get started? The same was true for Chidi. He said it would have a greater impact than Hiroshima when asked.
Tinder for Traffic is a mobile application that lets people connect while stuck in constant Lagos traffic. A grant from his uncle allowed him to start researching the app and writing the code. As he closes in on finishing the app, guess what? His business was already running out of funding before he even got started.
New businesses are exciting, they come with their own thrills. Before the startup even begins, excitement can quickly turn into anxious anticipation. As we often say, “Sell First, Launch Later,” it’s because you cannot have everything covered on your first day. As long as you launch quickly, you can be successful. We have an entire day’s lesson ahead of us, so let’s get started.
This post stems from the belief that we at Triift Africa want greatness to exist before it even commences; we root for your ideas. As a way to prepare individuals who plan to start a business for the overlooked costs involved with doing so. When you start a new business, you will probably have to pay for these things.
Do you have a promotion and advertising plan when your new business launches? How much does this plan cost? Is that something you’ve considered? Are there any cheaper ways to reach prospective customers with the news about your business?
Finance Costs: If you need a loan to finance your business. Whether or not the business is profitable, have you considered the interest you will need to pay?
Business owners usually only think about the rent when they consider getting office space. Equipment and supplies can also be important. Besides the obvious costs, there are a lot more to consider. For example, furniture, decorating, electricity, and cleaning.
Fees associated with the establishment of a new business: It is expensive to register a new business. Every opportunity counts, though it may not seem like much. Business licenses are sometimes required too. The Foods and Drugs Authority requires a license if you plan to own a food-related business.
Expenses for market research: Do you know how much will be spent on this? We admire people who are intoxicated by their ideas; however, it is critical we keep an eye on the behaviours of our customers so that our products can meet their unique needs. There are a lot of expenses involved in understanding audience behaviors, so be sure to budget that in.
Due to the fact that most businesses now operate online, technology expenses are high. It is possible you will need to purchase software for accounting, website development, etc.
Business owners generally do not consider employee expenses. Regardless of whether you plan to hire any employees soon, you are already the first to work for your business. To avoid taking money from the business, set plans to pay yourself no matter what the profit is.
How to get ahead of startup costs
As part of your business plan, prepare a preliminary expense budget. Prepare a business plan that includes the costs of each of those items. A business’ profitability depends on it as well.
In drawing up a budget, you will find that some costs can be minimized or entirely eliminated. Here are some ideas:
- A small business’ marketing budget should not break the bank. Most of it can be done for free. You can read our previous article here.
- Consider continuing to run the business from home until you grow your business.
- Paying huge interest rates on loans can hurt your business. Save up your money, get donations from family and friends, or talk to us at Triift Africa. We offer loans at very low interest rates to small business owners.
- Engage freelancers to do your work instead of hiring permanent employees. For freelancers, none of these benefits are required.
- You can manage your website yourself if you learn how. Make sure your business uses free software until it expands.
In our free profitability checklist, which is available for download, we discussed some of the ways you can keep your eye on profitability and the key metrics that matter.