Business Set Up Expenses
Allsquare Accountants Edinburgh explore the cost involved in setting up a new business. Contact Allsquare to discuss our guide on Business Set Up Expenses today
Setting up a new business can be an exciting time. Many people find that discovering something they are passionate about gives them the energy and enthusiasm to work hard, with the aim of making it a success. For those who are not changing direction or industry, but who are branching out on their own after a period of working for (or with) someone else, a renewed sense of purpose provides a fantastic impetus to try their absolute best.
Alongside the more exciting aspects of starting a new company, there are also a myriad of less glamorous tasks that must be undertaken, including organising start-up costs and the management of cash flow as the business is established. Properly managing these areas is essential if the business is to become profitable in the long term.
Some of the most important costs to bear in mind include the following.
Accountancy or Bookkeeping Fees
It is absolutely crucial that an accurate record of all spending is kept. This is especially important during the start-up phase of the business. Although many do this independently, employing the services of an experienced accountant can actually save money in the long term. Contracting out the work will also enable you to concentrate on the core competencies of the business, maximising the chances of long-term success. Don’t forget to factor in the cost of producing company accounts after the first 12-18 months of trading.
Marketing Costs (12 Months Minimum)
In today’s competitive business world, marketing your product or service has never been more important. And while the technological advances of the last two decades have enabled organisations to reach out to a global audience, unless the right messages reach the right people at the right time, they will simply get lost in the ‘noise’ of every other marketing campaign out there. Effective marketing is vital for the generation of new business, as well as in sustaining it. Whether you decide to bring in an outside agency to help you to achieve this or do it yourself, allow for the costs involved for the first year at least.
When working out start-up costs, many people underestimate the additional costs associated with leasing premises. Utility bills, business rates and insurance costs are just some of these. Don’t forget to check with your local council to see if you are eligible for any rate relief.
Watch out for hidden costs. For example, when paying employees, you will be liable for Employer NI on top of Employee NI. This needs to be taken into account when you are costing for the first 12 months.