The Hidden Costs: 5 Key Considerations When Starting a Business

So, you want to start a business and are wondering where to begin and what it will cost… most would advise that you start with putting together a business plan, and I don’t contest that… you should, but it’s essential that you’re aware that most business plans, including all the research and financials that they include, do not give you an overall picture of what your start-up costs will be. This article gives an overview of the ways to determine, realistically, what the costs involved in setting up a business will be.

A solid plan? Probably not! A well-formed, flexibly applied plan? Absolutely!

It’s true that the usual manner in which businesses start up, is through an opportunity being identified, determining the ways in which this opportunity can be milked for all it’s worth, (carefully explained in the business plan), and figuring out how much capital is required in order to build the business as outlined in the above-mentioned business plan.

Whilst this is ‘the usual’ and can often work, there is one flaw with this model… It is all developed on the premise that the business will work out right, and as planned, the first time! The reality, is that it is exceptionally rare that everything goes exactly to plan, and most often, even if it does, it’s not first time around.

Often, between the time that a business plan is written, and the time comes to implement, it’s hardly worth the paper it’s written on. Harsh, but true.

In order to more accurately, and relevantly determine your start-up costs, it is essential that you reflectively review assumptions held within the business plan, and be prepared to adapt toward a more flexible approach. Now by no means am I advocating that you don’t need a business plan… I think they are immensely helpful for allowing us to consider as many of the elements required in starting and growing a business as possible… but the plan is only as good as the action you take, and to get the greatest return on action, having plans that are relevant and based on the most current context is key.

Part of your plan should always be to revise the plan… You may have to change things repeatedly as you learn more, determine the impact of what you’ve learned in your business, and then add it to the plan accordingly.

Consider Scaling Down and Pilots

I know what it’s like… you have a fantastic business idea, you see the potential, you see how great it can be, and you want to put in all you can to make that vision a reality. While this is the only way to go for some business concepts which are pretty much, ‘Go Big, or Go Home,’ this isn’t always the case.

Where it’s possible, consider the option of scaling down, and testing the concept. This will allow for you to start up, while saving money, learning from the pilot and being able to action changes, and raise more funds based on proof of concept. This approach not only reduces start-up costs but provides valuable insight around the business, in real terms. It may not generate much profit, but it will offer a wealth of verified information that will help you to determine the next steps… If you decide to proceed with expansion, it is a great basis for second stage funding.

Consider Realistic Timelines and Pricing

Part of calculating your start-up costs will involve figuring out your initial cash flow. Without having actually operated the business this can be tricky. It’s also not uncommon to fall into the trap of under-pricing products and services in order to stand a better chance of competing, and to ‘tempt’ in more business. Be aware that you don’t necessarily need to do this. If you do, raising prices to the market standard could become difficult at a later stage, and you’ll have to do a lot more work in order to break even. My advice- recognise your worth, and price it accordingly.

Consider a Realistic Time-frame for Starting-up

Time is always potential money, and when you’re starting in business, this is true even more. If you’re going to have fixed costs like property leases, if improvements or modifications are required prior to opening this impacts on both time, and money (quite directly). These additional costs add to your start-up costs, but also add to the time before you can start earning. Don’t fall into the trap of under-estimating when you’ll be ready to trade, and build in a good time cushion before you ‘need’ to see funds coming in from business activities. Failure to do so could result in a significant amount of stress, and in some instances, can even result in a business shutting down before it’s even had the chance to take off, simply because there wasn’t enough time allowed to give it a chance to get going.

Consider the Cost of Money

Many entrepreneurs who have a great idea that they believe strongly in, will make the decision to finance the business themselves. At times, this can be at great personal cost, using the credit on credit cards or loans, and tapping into equity from homes etc. While for some smaller ventures the impact may be negligible, for larger ventures, self-financing should be considered exceptionally carefully before committing to this option. If funds are in abundance and potential delays, changes, etc. will have little impact and will be offset by the return, however long it may take… then go for it! If this is not the case, and any delays and progress are not going to plan will cause a great deal of personal and financial strain that could jeopardise business success anyway, then definitely consider other options.

To Conclude…

As you can tell, starting a business does not begin and end with a business plan, but goes beyond that to wider considerations. This article lists some of these.

Finding Time To Start A Business

One of the 1st things we look at during my Amazing Business Creation Workshops (in fact, it’s part of the pre-work!) is actually making time to start planning your business – sort of ‘getting ready to get ready’!

As working mums we can often feel like we have very little time to do any of the things WE want to – and so often I hear women tell me they’d love to start a business ‘one day’ but they just don’t have time right now.

Well, I have news for you – you will NEVER have the time to start a business (or any of the other the things you want to do) unless YOU take serious action to MAKE it!

You see, your time is like a vacuum. As soon as you free some of it up, it naturally gets filled with something else – and if YOU don’t determine what that is yourself, I’m afraid it just gets occupied by ‘stuff’. ‘Stuff’ that’s about as useful for getting you where you want to be in life as a chocolate fire guard.

Think about it – your mum/friend/partner offers to watch the kids for a couple of hours. What do you do? Do you find yourself complaining to your friends that you don’t know where the time goes? Because you spent the whole time sorting laundry/washing up/picking up toys/sweeping the bits off the floor, only to have to do it all again an hour after they get back?

What if you spent that 2 hours really focusing on one particular goal that you’ve had for ages (like starting a business!)? What if you left the other ‘stuff’ until the kids had gone to bed and you knew it was going to stay ‘done’ at least until they get up again?!

It’s difficult isn’t it? It’s very easy to get totally caught up in trying to be everything to everyone – trying to be a supermum – but there really does come a point where you have to make some decisions about what you really want for you and your family IN THE LONG RUN.

Now, seeing as you’re reading this, I’m assuming you’ve made the decision that you would like to take steps to find a better work/life balance, and to do that by starting a business. I’m also assuming that your no. 1 priority is your family.

That’s certainly the case for the mums I’ve worked with so far and it is for me.

Virtually all the mums I speak to, with very few exceptions, say that the main reasons they want to start a business are a) they want to (or need to) spend more time with their family or b) earn more money to enjoy with their family or both.

So, accepting that family comes first, we have to find a way to give enough priority to starting a business in order to actually make it a reality while also recognising the whole reason why you’re doing it in the first place.

You need to find a balance between spending the time you want to with your family AND dedicating enough time to following this path to creating a better life for you all.

Now, I’m not going to say it’s easy – because I’d be lying.

But if you’re determined to create a business you love that can provide for you and your family for years to come AND give you the life balance you’re looking for, finding time to plan it properly is absolutely crucial.

The following tips for finding the time you need to start planning a business around your family come straight from my Amazing Business Creation pre-work. We use worksheets to help us with most of them but you can do the work without. I hope you find them useful:

Find the ‘leaks’ in your time.

Take a pad of paper and write down every single thing that takes up your time during the day. I mean EVERYTHING! Work tasks, kids tasks, the school run, shopping, meeting with friends, running errands for parents, walking the dog, updating Facebook – whatever.

Once you’ve done that, cross out all the things that, if pushed, could go altogether for the next 6 months. Now identify the areas where you could SAVE or MAKE time – limiting time on Facebook for example or, better, getting rid of it altogether (unless it’s for business purposes!); staying up 20 minutes later on a night to prepare packed lunches, set out uniforms and lay out breakfast things; doing your food shopping online.

Maybe you could meet friends less frequently but for longer, or meet them at your house instead of travelling somewhere? Could you use the time when your baby or toddler is asleep, instead of catching up with the laundry? Could you arrange for your child to go to a friend’s for tea after school and offer to return the favour another night? Could they go to after school club for a while?

Once you’ve identified what you COULD do, commit to actually doing it!

Remember, action is what’s needed here, not just ideas. It’s all well and good completing the worksheets and saying ‘well I COULD DO THIS’ and ‘I COULD DO THAT’.

DO IT NOW!

And it’s important not to get fed up about it – remember, it’s not forever, just for right now to allow you to focus on what you want out of life. Then you can slowly start to add things back in (and actually, some things you’ll probably realise you’re just better off without doing altogether!)

Identify your goals

For each area of your life (we do some work on all your individual ‘roles’ during the workshop), start to create a list of all the goals you’d like to achieve.

So create a ‘mum’ list, a ‘wife’ list, a ‘business owner’ list, a ‘daughter’ list and so on.

Write down everything you want to achieve on those lists – long term and short term goals all count here.

Do you want to help your children learn to read? Do you want to re-connect with your parents? Do you want to move to a new house in 2 years? Take the kids to Disneyworld? Do you want to be able to buy your partner a new car or to retire at 50?

Take an hour to really think about what you want your life to look like in a few years time – from all angles.

Lists, lists, lists

From the goals you’ve identified, break them down into the tasks you’d like to do each day/week/month to bring you nearer to those goals.

Spending 30 minutes each night reading with your children, dedicating 1/2 day each weekend to spending with your parents, spending 1 hour 3 times a week dedicated to planning your new business – whatever you think you need to build in to reach the goals you’re setting yourself.

Take Control Of Your Time

The next step I recommend (and it sounds a bit extreme but it works!) is to take an appointments diary (I use the Franklin Covey planner system and provide this for mums who join my longer term programmes) – one of those that breaks each day down into 15 or 30 minute slots – and schedule your next week.

Try it once and see how you get on with it.

Plan slots for everything you want/need to do each day and try to stick to them. Try scheduling your WHOLE day for 7 days and commit to trying to stick to it – 1 hour to get the kids ready in a morning, 45 minutes for the school run, 1 hour to work on planning your business, 1 hour housework… whatever suits you. But remember to build in slots for all the roles we covered above. Just try it and see if it works for you.

I even used to schedule in time for the kids bedtime routine – to make me concentrate just on them for 45 minutes… nothing else. You’d be amazed how quickly they went to sleep afterwards! It has to be said, sometimes I really need to make an effort on the parenting front, I’m ashamed to admit!

Of course, things change, and you have to re-arrange things during the day, but having a plan to work to can really make a difference… if you want it to and you’re willing to really commit to giving it a go.

Well, there you go – just a few tips to get you started… I hope you’ll give them a try.

How To Start A Business And You Really Make Money In Your Own Business

Don’t let all the difficulties in running a business stop you from starting your business.

Don’t even let those who have failed in their businesses discourage you from making money and succeed in the business world.

Let this article be a great encouragement to you at this moment, it doesn’t matter whether you are now thinking of starting a business, in the process of starting your business or you are already in your own business.

Though it is not that easy to start a business, because there are so many things you need to do before you can really make money and succeed in business.

However, I sincerely believe you will make money and succeed when you are running your own business.

It is because I also believe the moment you decided to start your own business, you already have a very strong determination to succeed in the business world.

The most important thing you need to do now is – read this article seriously many times to make sure you really do one very important thing – a good preparation before you start running your business.

The first thing is to make sure you are truly well-prepared and you really know how to make money and succeed in this intense competitive world market.

The second thing is to make sure you are very confident in running your business and you truly know how to prevent earlier failure in business that is so common in the business world.

Moreover, any moment you feel discouraged when you are running your business, always remember to come back and read this article, it will inspire you and help you regain your self-confident, you will move on confidently until you really make money and succeed in your own business.

Here are the Three Important Steps that I believe they will help you tremendously when you are doing your preparation before you start running your business.

Step One: Preparation

1. Business documentation, accounting and taxes

Get a professional accountant to help you in business documentation, accounting and taxes. It will save you time and effort, so that you can immediately focus on business development to bring in profits into your new business.

2. Focus on one business at a time and make it a great success

Don’t be a jack of all trades, starting many businesses before you really make money and succeed in your first business. You can start another business if you want when you really make money and succeed in your first business.

3. Do your market research before you start your business.

Don’t simply start a business just because you think your new product or services can make money in this world market. Seriously put in your time and effort in doing your market research and know precisely whether there is a potential for you to really make money with your new product or services.

4. Get your success master plan ready

Write down your business vision in your success master plan and put in more details on how you want to succeed in business. Read your success master plan regularly and know your daily progress until you really make money and succeed as what you have written in your success master plan.

5. Learn and be a master in selling and marketing

Don’t start a business until you really know how to sell and market your business ideas, your products or services. Selling and marketing are the two main business activities that will bring in profits into your business.

You have to sell your business ideas, products or services to those who joined you and they are helping you in your business – your sales personals, your distributors and traders. You also have to train them and guide them in the selling and marketing of your business ideas, products and services to the consumers and businesses.

6. Create an effective business system

It will minimise your daily work pressure and stress in running the business. It will also make sure the business work flow is always stable and consistent and you truly give the best standard of services to the consumers. You may also franchise your business to expand your business market.

Make sure everyone in your business organization seriously follow your business system and they truly understand the benefits for them when they follow the system, whether it is a simple checklist or work flow chart and monitoring system. New employee will easily take over the work should someone suddenly leaves your organization. Keep on improving your system to meet the growing demand of the consumers as your business grow and expand in the market.

7. Keep a business capital reserve in your new business

It does not matter how much business capital you have raised for your new business, but keep a capital reserve for two years’ business fixed expenses, because you may not make a profit in the first two years. This will enable you to focus on business development without financial worry until you really make a profit in the business.

8. Always be a major shareholder in your own business

Remember to keep at least 60% of your business shares and always be a major shareholder in your own business. Don’t oversell your business shares in the market if you are using your business shares as an exchange for raising your business capital. Otherwise, even though you are the founder of the business but you will easily lose your post as the CEO – Chief Executive Officer in your own business.

9. Maintain a good physical health condition

Daily exercise, having a good sleep every night and eating a balance diet everyday to make sure your physical health is always in good condition. You will then able to focus on your daily business activity, leading a team of people to really make money and succeed in this intense competitive world market.

Step Two: Start Running Your Business

1. Understand the grand purpose of your emotional feeling

You must truly understand the grand purpose of your emotional feeling and “why it is so important” you must always feel good and happy when you are running your business, so that you know precisely how to allow your wonderful emotional feeling to guide you prevent earlier failure in business and how to really make money and succeed in this competitive world market.

2. Become a great leader in your own business

The moment you decided to start a business, you are already a leader in your own business. As long as you are willing to learn and improve your leadership, you will truly become a great leader, unite and lead your team of people achieving your vision in your own business.

3. Focus on sales and marketing of business ideas, products and services

Your goal in business is to make profit and without making a good profit, very soon you will be out of business. Therefore, you must focus on sales and marketing that will bring in profits into your business.

4. Keep a healthy cash flow in your bank account

Without keeping a healthy cash flow in your bank account, it will also lead you to business failure. Always consult your accountant to make sure you wisely control your business expenses, so that you will never have to face with cash flow problem in business.

5. Create products or services that are truly great and remarkable

Make sure you create products or services that are truly great in solving the consumers’ problems. You must also make sure there is quality consistency in your products or services before you deliver them to the consumers.

6. Do not sell inferior quality products and services to consumers

If you are selling other people’s products and services, make sure you sell products and services that are truly great and remarkable. Inferior products and services will bring more problems and inconvenience to consumers and ruin all your efforts in building the business, and it can also bring you to earlier business failure.

7. Provide excellent services to consumers

Always give the world’s best services to the consumers. Make sure they really feel good and happy when they are buying your products or services and they truly enjoy a long-term good experience in using your products or services. The consumers will be very happy to recommend your products or services to potential customers.

8. Do not expand your business too fast

Seriously put in your time and effort to grow your new business. Make sure your business is stable and really make profits before you think of expanding your business in this world market.

9. Helping the world economic climate to improve

When you are in business, you are also here to help those who are starting their own business and those who are already in business to succeed in business. The easiest way to do it is encourage them to read this article. When many businesses in the world succeed, the world economic climate will improve. Consumers and businesses in the market will have more money to buy your products or services. Your own business will also easily succeed and flourish in this world market.

Step Three: Don’t Give-Up Until You Really Make Money And Succeed

1. Do not afraid of intense market competition

Intense market competition is always good for you and all business people. It is here to stimulate your powerful mind to think and you will then come out with new business idea, new marketing strategy, new product or new form of services to compete with others in this world market. Intense market competition is here helping the growth of businesses and the economic growth of this wonderful world you live, it is truly the wonders of the business world.

2.You must not afraid if your business suddenly turn bad

In every unpleasant situation that is happening in your business, there is always a great benefit for you – it is forcing you to make the necessary changes and you will see an impressive improvement in the way you run your business.

3. Have a strong determination to succeed in business

It is truly your determination to succeed that will help you go through all the troubles in business. It is also truly your strong determination to succeed that will make sure you will not easily give-up until you really make money and succeed in your own business.

Conclusion:

1. Read this article seriously many times until you really do a good preparation before you start running your business. Whenever you feel discouraged when are running your business, always remember to come back and read this article, it will truly inspire you to move on until you really succeed in business.

2. You must truly understand the grand purpose of your emotional feeling and know precisely “why it is so important” you must always feel good and happy when you are running your business, so that you know how to allow your wonderful emotional feeling to guide you really make money and succeed in your own business.

3. Sincerely share this article with as many business people as you can to help them succeed in business. When many businesses in the world succeed, the world economic climate will improve, your business will also easily succeed in this world market. Isn’t it wonderful in the world of business?