Before launching their own business, many aspiring entrepreneurs ask themselves how much money they need to open a business. A new business is opened as a sole proprietorship or LLC if working with partners. You can start with self-employment – to test and fine-tune the idea. Self-employed status does not allow you to hire staff and limits income but offers a favorable taxation system.
The start-up capital of an aspiring businessman will depend on a host of variables: in what area do you plan to develop your business? Is there a need to rent or purchase a separate space? How much do materials cost to purchase? All these questions, as well as a hundred others, require careful analysis and a balanced approach. Business brings a stable income when the main issues are solved initially.
How much money you need to start your own business
There is no unambiguous answer to this question. Some businesses require a compulsory license, such as those that trade in alcoholic beverages, pyrotechnics, medicines, etc. In these cases, the start-up capital is included in the cost of a license for a year.
To launch a franchise business, you must pay a lump sum. At the same time, you will also have to bear other costs: if the bar has alcohol, you will have to draw up your license.
All these important trifles should be taken into account at the stage of planning your own business. The cost of starting a start-up comprises many factors, starting from a notional thousand rubles, but has no upper limit.
What is included in the cost of starting a new business
Invest in market research. This is an optional process, but it helps increase the chances of a successful idea launch. Studying the chosen market before launching is common to assess competition, draw a portrait of the target market, and check demand for goods or services.
Market research will help you understand if your business will be profitable. The cost of the procedure depends on the depth of the question. You can buy a ready-made market analysis, which will cost about 100 thousand. The network has sites of research companies with free information, which provides a brief squeeze of information.
Beforehand, you need to plan the monthly expenses that you will incur for at least the next six months:
- Salary. Consider all employees without whom running the business will not be possible. To save money, it is recommended to form a permanent staff of those whose duties cannot be outsourced, and non-permanent tasks should be outsourced to contractors.
- Taxes. Consider all taxes and contributions to be paid. These include VAT (if your business has it), taxes for employees, income tax, and property or transport tax (if the business is related).
- Procurement. When choosing suppliers, look not only at the prices of their goods but also the terms of cooperation. If deliveries are planned a few days after the order, you should have a stock of products for this period.
- Credits. The monthly payments are included in the expenses if you open a business without money.
- Advertising. The amount depends on the chosen marketing strategy.
- Rent. Find out at once whether you will have to pay the full amount for the entire range of services or will have to pay separately for electricity, heating, and cleaning services.
The “other expenses” column includes the maintenance of the premises (consumables, internet, subscription to paid programs, etc.). When deciding how much money you need to start a business, consider all the above factors and do not forget possible unforeseen expenses.