When you first step into your role as a new business owner, it can be easy to dismiss the need for services like business support, legal advice and HR.
In those first heady days when you just want to get your business off the ground, it can be all too easy to prioritise investing in beautiful branding, sturdy equipment and a comprehensive marketing strategy, leaving your other expenses to take a back seat.
However, ignoring these now can lead to costly mistakes later.
Here we take a look at some of the main costs you should be factoring in from day one, ensuring you have a budget set aside so that you’re fully covered when you need it.
Costs and fees to consider
Firstly, you’ll need to register your company so that HMRC knows you exist and knows to expect your tax return at the end of the financial year.
The good news for sole traders is that there is no fee associated with this, but you still need to make sure that you are registered for self-assessment.
If you’re setting up a limited company through Companies House, there is an associated fee for this, currently set at £50 if you’re doing this online.
You could choose to do this yourself or use an agent, which may be another fee you’ll need to consider.
Depending on the nature of your business, you may wish to legally protect your ideas, brand and creations from copycats. This is where intellectual property protection comes in.
You can protect your brand name, logo and slogans using trademarks. These are relatively low-cost, at around £170 at the time of writing.
For product-based businesses seeking legal protection for designs, patents may be necessary. While the application fee is low, there are additional fees to consider further down the line, and you’ll almost certainly require advice, as applications are complex to get right.
And as an employer, you have a number of legal obligations, including the provision of contracts, workplace policies and health and safety standards.
It may be necessary to seek advice early on in order to make sure that each of these is being met. Expert eyes can sometimes notice problems you didn’t even know to look for.
Employers’ liability insurance is a legal requirement if you have staff, and should also be budgeted for.
There may be fees involved for seeking the help of business advisers, solicitors and HR consultants to ensure that you meet these obligations in your business.
Depending on your sector, there may be additional licences or permits you may need to seek to comply with regulations.
For example, anyone serving food will need to register separately for hygiene regulation purposes. You may also be applying for licences to serve alcohol or provide live entertainment.
Costs vary widely. Some require a free registration, while others may have a fee attached. In almost all cases, the cost of the fines if you’re found not to have the correct documentation will far exceed the upfront cost.
Budgeting for expenses
Your costs can feel daunting when you’re building a business from scratch, but they can be managed by budgeting from the outset.
Setting aside £1,000-£3,000 should be enough to cover the essential costs for most businesses, including registrations, insurance, and ensuring you have robust contracts in place at the start, though this is dependent on the sector and nature of the business.
Consider investing in some professional business advice so that you can identify any gaps early on and factor in any future costs.
It can be tempting to DIY your expenses.
As a sole trader working without premises or much intellectual property to protect, this might be possible, but this isn’t realistic for most businesses.
Hiring employees, bringing in investors, signing long-term contracts and applying for patents all necessitate seeking advice to ensure that you and your business are protected.
How can Buckler Spencer help?
Your start-up costs don’t have to be overwhelming if planned for properly, but neglecting them now can create a lot more stress down the road.
Our advisers at Buckler Spencer can help you ensure that these expenses are an integral part of your business plan, allowing you to forecast and budget for them before they arise.
Get in touch today to find out how we can help ensure your business is built on solid foundations