Knowing the exact costs of starting and running your business is very much important before you take a start, because you can set clear and achievable goal only when you know what it takes to do so. Consulting businesses normally do not require a large capital investment at first. By this very statement I mean you start your consulting business while remaining in budget.
This article will detail you about all possible investments that you need to make initially as well as the running or operating costs. We will also discuss the points through which you can eliminate some huge expenses or cut startup costs at most.
1- Office Setup: of course it depends on the location you select. You may think of starting as a home office, but if you are able to, must consider operating out of your home.
Things to consider before setting up a home office
What do I need to set up a home office
Common challenges of setting up a home office and how to tackle the same
Home office design ideas for small spaces
2- Overhead Expenses: if you are operating from home then, of course, you don’t have to worry about rent and utilities, but when it comes to a separate office, add these expenses to the list too.
3- Salaries: No matter you are operating from your home or have a separate setup, if you need and have a staff, you need to pay them. Experts recommend outsourcing as it will save you the setup cost for staff. Moreover, you will save a lot of overhead costs while outsourcing.
4- Licencing Fees: Depending upon the nature of consultancy business you may require certain specific licenses . Moreover, these fees vary from state to state, and of course country to country, so it’s better to get in touch with a local office of the state department or local chamber of commerce for accurate details. Licencing and permits also require you to file documents in a professional manner for which you must consult an attorney because he can save you a lot of money and time.
5- Other Expenses: of course you will have to travel, i.e. to meet people and to entertain them with tea/coffee if they visit you, so keep a petty cash account for that.
Besides saving a lot of costs with a home based setup (till you get a good clientele) there’re lots more benefits of operating from home. Flexible working hours, no rush-hour nightmares, tax-deductible setup etc are some of the most common advantages. So, do consider operating from home if you have a limited budget and you are new to the business.