– How much will it cost to get your startup business off the ground in South Africa?
According to The Small Business Institute, more than 90% of the South African economy comprises of small and medium businesses. Yet, on average, it is estimated that about 50% of South African startup businesses fail within the first year of operation. This failure rate is largely attributed to a lack of proper planning, which includes the planning of startup costs.
Before focusing on cost estimates, first ensure that you’ve covered the basics by answering the following questions honestly;
- Am I a self-starter?
- Am I willing to work long hours?
- Am I good at making decisions?
- How well can I plan?
- Am I willing to invest?
Now you are ready to get to cost estimation, to start;
- Arrange all expected business expenses into lists.
- List all long-term assets the business might need.
- Make a list of expected recurring monthly expenses.
Beware of the hidden costs
When it comes to starting a business, you should always be aware of all the hidden costs associated. The costs you can incur are very dependent on the type of business you’ll run. Nevertheless, these costs can be a make or break situation if they are neglected. Here are a few of these potential costs to help you prepare;
- Market research
- Registration fees
- Website related expenses
- Start-up inventory
- Property costs
- Interest on a bank overdraft
- Maintenance costs
It is important that you keep an updated list of your expected monthly recurring expenses together with actual expenses. This will help you better estimate expenses for the next month. It is also a great way to identify any unexpected or unnecessary costs.
Here at Enslins Auditors we also offer a broad range of services that can help you and your small business plan and execute with better precision. For more, view our services here.