Starting a business is a thrilling experience that will test your limits and teach you a lot about yourself and the world. On the other hand, if done right, the journey to becoming an entrepreneur usually comes with financial freedom and stability, professional fulfillment, and increased opportunities.
But to get there, you have to start with the right foot forward. This involves a period of preparation and research during which you’ll build a reliable business plan and a budget to get you started.
So, how much do you need to set aside in order to give your brain project the best chance to succeed?
Trendy Business Models
The startup cost of any business is influenced by a series of factors, but you can make a rough budget idea based on the type of business you want to follow.
For instance, the e-commerce sector is on an accelerated ascending trend ever since the start of the pandemic and it doesn’t show signs of slowing down. According to recent data, the overall e-commerce share of total global retail sales should be around 24.5% by 2025, which is quite impressive.
Plus, the costs of an e-commerce startup are rather low compared to a brick-and-mortar business. You can start an ecommerce business for as little as $100 and the initial costs with site development, hosting, and domain are around $5,000. On the other hand, a brick-and-mortar location may request a hefty investment that goes well over $50,000.
Businesses that involve preparing/handling food and deliveries are also trending due to the pandemic, but the startup costs can go as high as $750,000 for a full-service restaurant and $25,000 for a local delivery business.
Overall, it’s best to keep an eye on business trends in order to understand which model works best for your current budget and plans.
Plan for Success
Some of the most often cited reasons for startup failure are money running out, being in the wrong market, or a lack of research. However, with a bit of planning and good research, you can learn to keep costs down and test the waters before diving in full.
Here are two aspects every new business should consider:
Plan for the Worst-Case Scenario
Business insurance is often the last thing on a beginner entrepreneur’s mind and among the first things on an experienced business owner’s mind. That’s because beginnings always involve risks.
Luckily, providers like iSelect business insurance have a wide range of policies that provide businesses with a safety net in case things don’t go as planned. This way, you can prepare for scenarios like cyberattacks, claims for damages filed by customers, problems with the use of specialized tools, and so on.
Start Small but Not Too Small
The desire to make it big and get a larger piece of the market pie can push you towards large investments in rent, tools, and raw materials (among others). However, unless you run the numbers and the estimates show there is a good chance for your business to succeed, investing too much too fast is a recipe for failure.
On the other hand, you shouldn’t be afraid to make the necessary investments for growth. If your business needs a brick-and-mortar store in a busy area of the city, prioritize your rent costs and find ways to cut down on other costs.
A successful business has a solid foundation designed on good planning and smart investments. And this is something anyone with an entrepreneurial spirit can do – after all, most successful businesses start small and find the right path to grow.