How much does it really cost to set up a new business?
I recently set up my own solopreneur business as a writer, editor and proofreader for less than £500.
Potentially, you can too.
Earlier this week I tweeted about how frustrated I was regarding investing in my business – whether it was better to get everything perfectly in place before launching, or to develop as time went on?
However, the very next day I was fortunate enough to secure my first two clients, meaning that the hard work and £500 I had already invested had been enough of a catalyst to result in initial success!
Therefore, I want to share the investments I have already made in the hope of giving anyone about to/hoping to set up their own solo business a realistic insight. These are my genuine outlays in my first 5 weeks of business, which have led to securing clients already.
Website domain (WordPress premium) £7 p.c.m. = £84 p.a.
Insurances (professional indemnity and public liability – getdinghy.com) £10.20 p.c.m. = £122.40 p.a.
Professional costs (SfEP and ProCopywriters memberships) £145 + £75 = £220.
Resources (professional books/business cards/logo/stationery) £24.79 + £10 + £10.83 + £13 = £58.62.
Miscellaneous (petrol/parking at events etc.) = £14.
Obviously some of my start-up costs are relevant to my particular niche but the general concepts still apply.
You should also factor in additional costs. Although I have not yet incurred any of these extra costs, I will be investing in them in the future in order to develop my business. I have already conducted my own extensive research into prices and embedded them into my business plan so that I am fully prepared. To reiterate though, I have not paid for anything other than my start-up costs yet.
If you are working from home and therefore spending more time there, your utility costs may increase. If you have a dedicated work room/office you may be able to claim partial utility costs as a business expense.
Do you need/want a separate business phone or add-ons/upgrades to your exisiting phone in order to be able to run your business remotely if necessary? If so, this will be an extra expense.
As per your marketing strategy, are you going to require leaflets and/or adverts in local publications or on certain social media platforms, or are you perhaps considering radio advertising? However you decide to market your business, you will need to determine a budget.
As you are now CEO, the HR department and the Financial Director of your own business, attending training courses and/or events related to your area of business is extremely important in order to maintain/develop your skillset and manage your business effectively. You may be able to claim for some professional development as business expenses, if they are for the direct benefit of your business.
Personally, I consider certain outlays luxuries rather than necessities – you may not agree and choose to invest in these ‘later luxuries’. However, I am not a spend-thrift and as I want my business to thrive I am investing in its core – me! It will be *my* skills, expertise and knowledge that speak for themselves in the professional service I provide, so these luxuries are for me to consider in the future.
Professional website design:
Your website is the only online platform you own and control, therefore it is worth professionally investing in – if you are in a position to do so. However, it can be expensive for a solopreneur, especially when your own WordPress website can be up and running immediately and fully tweak-able at any time. It is your choice whether to invest in a professional website from the outset, or upgrade it at a later date. Bear in mind, however, professional websites are not built overnight, so ensure you plan ahead.
In order to be able to offer an efficient service, or produce certain products, you may need to invest in additional equipment/software. For example, a photographer may need to purchase, or lease, a better quality camera or printer, or a proofreader may find certain computer software will make their job a lot quicker. What you already have may be perfectly sufficient but additional equipment/software may be required in the future.
It is imperative to keep financial records for your business, either by outsourcing a freelance accountant or completing a professional book-keeping course yourself. In the meantime, Sage, Xero and Quickbooks have been recommended to me.
Branding is important but you do not need to be a Kardashian to get work! High quality, professional profile/flat-lay/product shots may benefit your business but ensure you have the substance to match the style: gorgeous photography may tempt potential customers in, but it will not keep them unless you have the personal and professional qualities to match. Professional photography may be something to consider when you are ready to expand/re-brand if it is not an outlay you can justify at the beginning of your business hourney.
Co-working office space/premises:
Co-working office spaces or separate premises may be required in instances of mortgage lenders not allowing you to work from home, or if you need extra space for example, or simply as an alternative to working alone all the time. Informal co-working arrangements such as coffee shops and/or arranged meet-ups with friends/other business owners can be inexpensive, but dedicated co-working spaces and premises do require more of a financial commitment and usually have a variety of ad-hoc/hot-desk/monthly membership options available.
So, there you have it – how to set up a solopreneur business for less than £500!
My free business start-up costs template can be accessed on my useful resources page – please tell me if you find it useful and good luck to all the new solopreneurs out there!