What costs should start ups be thinking about?

Once you’ve had the inspired business idea and you’ve wooed investors with your plan of action, what else should you be thinking about as you establish your business?

Before you get to the interesting part of cracking on with the job itself, you must complete all the necessary tasks that will ensure your business becomes a well-oiled and profitable machine.

The practical issues

Whether you are starting up on your own or going into business with a partner, it is vital that you have all your legal bases covered before you start trading. Amongst the legalities and formalities are:

The set up tasks

There are a number of important costs to think about to make sure your start up has ticked all the right boxes, before you officially open for business.

• Contact HMRC – they’ll want to know that you are now self-employed.
• Banking – set up a business account and make sure that you keep track and records of all in-goings and out-goings from that point on. You’re self-employed now and your accountant will need this information in order to complete your annual tax return.
• Source your equipment – whether you choose to work from a virtual office or from a fully fledged office building with four walls, floor and ceiling, you will need to consider the price of filling your space with necessary hardware such as laptops, phones and furniture. It is worth discussing discount opportunities with the seller if you are able to buy in bulk.
• Finding suppliers – the providers you will need to contact will depend on your business. However, it is likely that you will require an energy provider, broadband and a telephone line amongst other utilities in your workspace - it is important that you thoroughly research your options and negotiate a good price, as it may be that you are unable to withdraw from a contract for up to a year.

Protecting yourself and your property

You will need a solicitor and an accountant to take care of your assets. While your accountant will ensure that your finances are HMRC ready, a solicitor will protect your personal interests:

• Intellectual property - this is particularly important if you are in a creative industry and your ideas are your bread and butter; your solicitor will ensure that you have the right paperwork in place should any copyright issue arise.
• Insurance – it is crucial that you are aware of the potential risks within your workplace and your legal responsibilities as a business owner. For instance, when you are welcoming prospective clients, visitors and eventually employees onto your premises it is crucial that you have the correct insurance in place.
• Licences – dependant on your industry, you may find that you need licences in order trade or practice. These should be in place prior to your business opening.

The cost of establishing your start up

Setting up a start up can be costly, yet it is possible to reduce outgoings in certain areas and ensure that as much of your available funds as possible are channelled in a profitable direction.

In order to achieve this, concentrate on negotiating to save money on necessary items where possible. For instance, you can reduce your energy bills by thousands of pounds per year by thoroughly researching and negotiating with a provider. Similarly, by purchasing office equipment, including laptops, printers, tablets and work phones in bulk, you may be able to negotiate a substantial discount.