Thinking of starting your own business while you’re still in college? A small business can have some pretty big payoffs when managed correctly (and with student loans piling up, who wouldn’t want some extra cash?) but you’ll need to consider these five expenses before you decide to start a business. Sometimes it’s easy to overlook expenses like legal fees or graphic design, so read on to learn about these and other fees you’ll need to account for.
1. Legal Fees
Starting a business requires certain legal documents and filing fees to be accounted for, and depending on your state, the requirements may differ between business types. You can choose to register as an LLC, Corporation (which has a few variations), Sole-Proprietor, Partnership, or Cooperative. You can also apply for a Non-Profit license, which is usually a bit more difficult to obtain.
The filing fees for your business paperwork vary from state to state, but you can find all of the information you need, as well as personalized legal help over at LegalZoom.com. Legal fees are often an overlooked startup cost for small businesses, and should you decide to hire an attorney, these fees can be even greater than if you do the paperwork yourself.
Just be sure you know all of your state’s requirements before attempting to fill out and file paperwork on your own. If you miss an important document, it could come back to haunt you just as your business is starting to take off. Do your research, and if you’re really struggling with what exactly you need, don’t be afraid to pay the extra money for legal help. With taxes and business legality, it’s far better to be safe than sorry.
2. Equipment and Materials
If you’re producing a good of some sort, you’ll need the equipment and materials to do so; which can cost quite a bit to put together. If you need production machinery or hard to get materials, you’re looking at thousands of dollars right off the bat. Accounting for these expenses is essential to getting an accurate startup cost.
Compare providers of materials to get the best deal, and opt for used machinery in good condition instead of buying brand new equipment. Equipment is something you can always invest in later, upgrading your machines and production process once you start bringing in revenue. There are plenty of used machinery outlets available, or you can visit online marketplaces to find the right equipment for your business.
Don’t forget to include things like office supplies and video conferencing solutions in your expenses. These often-overlooked startup costs can catch you off guard when you suddenly need office furniture or a way to talk with clients. Be sure to account for even the most minor supplies, so you don’t end up with unexpected costs.
3. Graphic Design/Site Design
For a new brand, you’ll want a stunning website and a recognizable logo. For these things, you’ll want to set aside some money for a good site designer and graphic designer (some web designers will do both). This is one expense you won’t want to cheap out on; having a good-quality website and a logo that identifies your brand to customers is vital to your success in business.
Paying a little extra for a crisp, high-definition logo will make all the difference when you’re creating your website or merchandise. A good logo increases brand awareness and differentiates you from the competition, and a good website makes it easier for your customers to understand who you are as a business.
If you’re running an e-commerce site, you absolutely must have a web designer handle your design. DIY websites simply don’t offer the level of care and customization you’ll find with a professional web designer!
Marketing your products/brand is another essential expense for startups. If you’re not marketing your products or services, they’re not able to reach new customers, and your brand doesn’t grow. Don’t make the mistake of thinking that marketing only applies to new customers though; you need to market to all of your present customers as well once they’ve made a purchase.
Marketing costs will vary according to how and where you market your products, and whether or not you enlist the help of third-party services in your marketing efforts. Marketing should ideally account for a large portion of your budget since reaching new customers will be one of your top priorities.
Whether you’re making food, clothing, or any other tangible product, or offering a service of some kind, your business needs insurance. There’s simply no way around it, and some states actually require businesses to carry certain types of insurance.
Insurance can protect you when accidental expenses arise, like natural disasters, fires, etc. The last thing you want is to have to pay for fire or water damage to your building from your personal accounts! Keeping insurance will help protect your business and ensure its legitimacy in the eyes of the customers.
There are plenty of expenses that come with starting a business, and financial planning isn’t for everyone. Financial advisors can help in this area if finances aren’t exactly your strong point. Head on over to Careful Cents to pick one of the best financial advisors in Texas if you find yourself struggling to get finances together for your business.