Starting a small business can be incredibly daunting, especially when you see just how much you could invest in. It’s tempting to throw yourself into the deep end and invest in everything you could possibly need but if you do that, you’ll soon be saying goodbye to this fledgling business due to lack of funding. Knowing what to spend on and what expenses can be avoided is essential if you want to keep track of your finances and invest in the right areas.
One of the most important aspects that you will need to consider is business insurance. With so many different covers available, you need to have a good understanding about what types are essential for your business type. Learn the answers to popular questions, such as ‘what is liability insurance’ and ‘do I need professional indemnity cover?’ If your business will be coming into contact with the public, for example if you’re a start-up mobile hairdresser, you will need to cover yourself in case of accident, damage or injury – this is where public liability cover comes in. You can get a liability insurance quote online and, for a small cost per month, you can save yourself a lot of hassle if things were to go wrong.
While it may be tempting to invest in professional advice at every turn (after all, it’s natural to want to lay the best foundations you can), you shouldn’t need to use financial advisors to gain the information you will need to succeed. With plenty of advice available online without having to spend a penny other than your broadband costs, a trip to the advisor can be avoided, meaning your pennies will be safely in your pocket for longer.
When it comes to doing your tax returns, understanding each aspect is essential, particularly in the first year of business when you’ve never even seen a tax return form before. Enlisting the help of a tax advisor or accountant can be beneficial but you have to remember that their services cost, and they can cost big. Are you willing to part with hundreds of pounds when, with the help of factsheets and online information, you could probably get away with doing it yourself? Weigh up the pros and cons. If you’re a whizz with numbers, you could probably do without them. If you hate receipts and paperwork, they may save you your sanity.
Don’t be afraid to invest in employees if the volume of work or custom you are receiving is too much for you to handle alone. Sure, you will have to pay them each month, but if your business is thriving, they will be an incredible investment that will help you in the long run. Don’t hire people just for the hell of it – make sure that the staff you have are essential to the operation of your business so that you’re not over-spending for any reason.
Be careful with what expenses you have each month. If you need office space, for example, but can manage in a home office, you can save a bundle on the rental of premises. Be savvy with your spending and stick to the essentials and your start-up business will have every chance to shine and succeed.