Before starting a business there are several important money questions you must ask yourself. Here are the three most pressing questions.
Is Your Business Selling a Product or Service?
Startup costs for product-based businesses are typically higher than those of service-based businesses. This is because of design, materials, production, storage, advertising, location, and selling costs like shipping and handling. You will likely need help as your product-based business grows so keep that in mind when starting a business. Service-based businesses may require some equipment purchase or vehicle purchase, as well as advertising, however, the costs are generally lower.
Do You Need to Hire Help Immediately?
Another important question to ask before starting a business is if you need to hire help immediately. This will increase the amount of money you need at start-up for paying employees. Many product-based businesses now use fulfillment centers such as Amazon to ship and receive packages for them, paying a fee for that service instead of hiring employees of their own. Having employees may also entail health care costs, insurance, worker’s compensation costs, retirement plans, and costs for equipment for their working spaces.
Where Will Your Business Be Based?
Many entrepreneurs are running their businesses, online or otherwise, from their homes. There are cost advantages to this including tax deductions for office space in your home as well as internet service and other deductions. In addition, this removes the cost of renting an office or building or purchasing a physical business location. When you run your business from home you may need to get creative with meeting clients as well. If you need to run your business from a physical location other than your home you must factor in that cost to starting a business.
Contact us at Grecco Capital for all your needs when starting a business and financing your endeavors.