Today we´ll look at some of the start up costs associated with a new business. Keep in mind that these may vary depending upon several factors: the type of business you are starting (service or product related); the location of your business (home or rented office space); the location of your business (licensing fees and DBA procedures are dependent upon where you live); and additional factors that you might need to consider for your specific business.
Licensing: To begin, you´ll need to look into licensing for your business. This website by the SBA can be of assistance as you start researching licensing http://www.sba.gov/hotlist/license.html.
DBA: You may also need to apply for a fictitious name. This allows you to set up a business using a name other than your own. You can advertise, set up a checking account, and obtain a business license. To read more about fictitious names, see this article http://entrepreneurs.about.com/od/businessstructure/a/doingbusinessas.htm. To determine whether or not you need one, you can check with your city´s business authority. You may also need to publish the fictitious name in a newspaper for a certain number of weeks, which will cost an additional fee.
Corporation: Corporations have fees separate from sole proprietorships. If you are uncertain as to how you should set up your business (corp. or sole prop.), check out this site http://www.sba.gov/starting_business/legal/forms.html.
Phone: You should always have a dedicated work phone line if you are working out of the home. You don´t want business calls to go onto your personal phone. This also helps you keep your work life separate from home. Some work at home mothers use a cell phone rather than a land line, so that they can keep it with them as they run errands and drive around town.
Mailing Address: If you are leasing an office space, you will use your office space as your mailing address. If you are working from home, you´ll probably want to sign up for a mailbox so you don´t have to use your personal address. You can generally find business boxes, which are slightly larger than the small home boxes, for around $20. per month. In some places you have to have the business license with you when you sign up for your business bbox, so call ahead before stopping in.
Office Space: The amount you pay each month will depend upon your location and the size of your office space. This will probably be the costliest of your start up fees.
Website: Setting up a website can be expensive, depending upon how you go about it. You can hire a company to do this for you. They will work with you on what you want to see on your website, and then they will set it up and show you how to make small changes as needed. Or you can learn to set up websites on your own and design it yourself. This is great if you have a lot of time on your hands and you are creative and want to have a hand in it. FrontPage by Microsoft is one easy to use program, and some web site hosts have their own templates, though they may not offer as much variety as other programs.
You will also need to sign up for a domain name. Some web site hosts give this to you for free or for a minimal fee.
Then you´ll need to find a host for your website. If you are selling items and wish to use a shopping cart on your website, you´ll need to sign up for a merchant account. You can also look into accepting paypal rather than setting up a merchant account. I suggest doing some research on these two and comparing them for your particular situation.
Next week we´ll take a look at a few of the other start up fees associated with a new business.