When you first set up your new business, it can be easy to get carried away with fanciful dreams about everything you’ll achieve, the products you’re going to make and the impact it will have on people’s lives.
However, nothing is ever so straightforward, and there will always be many challenges to face along the way. The biggest of all these will undoubtedly be financial, so below are just five of the start-up costs most entrepreneurs are guilty of forgetting.
1. Slow growth
Although you’ll have visions of your company exploding in popularity from day one, the reality is actually much slower growth, and this will have an impact on everything else. When you create your budgets, don’t just cover the first couple of months assuming you’ll be inundated with orders which will pay for everything else after that point – the likelihood of this happening is quite slim. You should always have enough money to cover the first 6 months comfortably.
2. Networking can create huge bills
When you think of networking with industry professionals, it’s probably huge, glamourous events that spring to mind, but have you thought about the reality behind that dream? Industry get-togethers and conferences are incredible opportunities, where you can meet some of your greatest clients, but you must factor in the ticket cost, transportation, hotels to stay over, as well as going out with your new business pals. Networking can be profitable, but initially expensive, so don’t leave this out of your equations.
3. Your own learning curve
You’re the one leading the team, so your knowledge and skills must be second-to-none in your field. Most entrepreneurs are so busy running the company that they forget to keep abreast of industry developments and new products themselves, which can have a huge impact on your company further down the line, when you realise just how behind the times you are. Always allow time and money in your schedule to invest in your own learning and development.
4. Improving service providers
You probably pulled together your initial costings by getting everything as cheap as possible, but as your business grows and you need better reliability and a more polished service for your customers, you will need to look at improving your list of providers. For everything from parcel delivery to software support and office operations, work out what is and isn’t working about your current set-up, and research what other options are out there.
5. Maintaining efficiency
Once you’ve gotten everything up to a high standard, you have a steady stream of customers and life seems good, this is when you need to be most vigilant about maintaining those operations. Training new team members and providing development for current staff is critical to keeping your workforce happy and your turnover low. Keeping quality control to a high standard means you must perform regular SWOT analysis. Factor these kinds of assessments into all your calculations.
Can you think of any more costs entrepreneurs forget?