What It Really Costs to Launch a Start-Up

The majority of potential entrepreneurs either overestimate or underestimate the amount of money that it would take them to start a business of their own. The underestimation usually comes from a false presumption that their business will be profitable from the first minute, while the overestimation starts from a false presumption that they have to make a grand entrance. The truth, however, is neither here nor there. Launching a startup is a task whose cost is determined by your industry and your ambitions. Here are several things you need to know in order to be able to determine what it will really cost you to launch your own business.

Costs to Launch a Start-Up

Technology is a lot cheaper

In the past, buying a server, a software license and building your own website was incredibly expensive. Nowadays, fortunately, things are not so. Instead, you have a low-cost alternative to outsource, find a DIY platform or get a package deal on anything you want. Cloud-based services are also making these things a lot easier, which is what has made the cost of starting a business plummet down to a more acceptable level. Even if you intended to start a business in the e-commerce industry, you would be able to find a third-party marketplace option (Fulfilment by Amazon) instead of building your own platform.

A lease on the office space

The next major advantage of launching a startup in this day and age lies in the fact that, if you don’t feel the need for such a thing, you don’t have to get a traditional lease on the office space, at all. Instead, you can work from home and hire people from all over the world as remote workers. If you have a micro-sized staff and want traditional office space, you can look for shared office spaces in your area. Sure, once your business starts growing, you can move to a proper office and hire migration agents to help you get work visas for your international talent. However, up until this point, you can stick with a more frugal method.

The delivery system

The next expensive and important aspect that you’ll have to invest in is your delivery system. On the one hand, you’ll have to provide enough vehicles for the enterprise, however, you could also hire owner-operators, thus significantly reducing the up-front costs of your fleet. As we’ve already mentioned, you can also opt for a drop shipping model.

delivery system startup cost

Other than this, you’ll also have to hire a fleet manager and due to the fact that you can hire a seasoned expert online (as a remote worker or freelancer), this too can become a lot less expensive. By getting the right fleet management software for your business, you’ll create a scenario where even a layman can efficiently manage your fleet, come up with optimal routes and more.

Marketing campaign

Investing in a great marketing campaign is the most definite must-do for any business just breaking into a new market. The problem with this idea lies in the fact that a marketing campaign costs you an arm and a leg. Still, in the digital environment, it’s possible for you to get a great ROI at all times. For instance, methods like PPC make you pay only for the traffic that you actually receive. As far as the ads that aren’t generating any traffic… well, they don’t cost you a thing.

Ordering supplies

When it comes to ordering supplies, you have two methods of handling this in the modern era. The first one is to save money by buying in bulk, which requires a bigger up-front cost and a smaller cost-per-unit. On the other hand, by investing in a sophisticated inventory management system, you’ll be able to perform more accurate inventory audits. Needless to say, this will allow you to make timelier orders in order to never run out of supplies. This will allow you to make comparatively more expensive offers but smaller in volume and, therefore, easier to fit in your budget.

The payroll

What It Really Costs to Launch a Start-Up

Finally, you need to consider the issue of the payroll and even though you may make a model that revolves around performance pay, it’s questionable whether you’ll receive a payment from your clients in time. This is why you need to have some money stashed away or a method like a paycheck loan available to fund it. A way to finance your startup is one of the most important prerequisites of making it in the business world. Overall, you need to think about bonuses, as well, if you want to keep your staff motivated. This, on the other hand, can definitely wait for the client payment.
In conclusion

As we’ve already stated, the amount of money that it will cost you to launch a startup mostly depends on what you’re aiming for. The biggest advantages of starting a business in this day and age lie in the fact that every single aspect of business that you’ll have to pay for has a significantly more frugal option. In other words, if you want to go the low-cost way, you have the option but if you want to make a grand entrance to the business world, hire a lot of people, rent out a huge office downtown and spend a fortune on marketing, there’s nothing to stop you from doing so.

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Alexander Hunkin

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