Many people ask "how much does it cost to start a business". New research suggests it may be less than you thought
Starting up a new business may be more affordable than many entrepreneurs realise, according to new figures. A recent survey conducted by PeoplePerHour has revealed that the average cost of starting a business in the UK is just £312 - less than the average weekly wage of £442.
Similarly, just over three-quarters (76 per cent) of small businesses launched with less than £2,000 of start-up funds. Although the initial set-ups may be humble, as 86 per cent of respondents saying they initially ran their business from a spare room, many grew into successful enterprises.
These figures contradict the misconceptions of many Britons, that launching a business is a costly, risky endeavour. Rather, the research shows that “starting a business is now most definitely open to anyone. You don’t have to be from a wealthy family, have a background in finance or have started on your entrepreneurial journey while in your teens”, said Xenios Thrasyvoulou, chief executive officer of PeoplePerHour.
He added: “The belief that it takes thousands of pounds of start-up capital to launch a business is simply not the case any more. A large number of micro-businesses are launched from home offices with very limited funds.”
Founders of micro-businesses can keep costs down by utilising freelance staff and using a spare room as an office, at least in the early stages. Additionally, many entrepreneurs minimise risk by launching a business while employed. Further business start up advice suggests that entrepreneurs should save up the money to launch a business (which should take less than a week’s time), rather than taking out loans from family and friends.
Most adhere to this rule - 76 per cent of respondents used personal savings to finance their business venture, while only 20 per cent received support from relatives and loved ones. A further 13 per cent put their redundancy money to good use, utilising it to start a new enterprise. A small percentage funded their endeavour with a bank loan, grant or outside investment.
Mr Thrasyvoulou claims there has never been a better time to start a business. He said: “For most businesses, the first year is generally the make or break year, and many companies fail because they have cash flow issues. But now big expenditures ... can be controlled ... Starting a business from scratch is no longer the daunting prospect it once was. The internet has given everyone access to a global marketplace of opportunities and expertise - and that should encourage a lot more people to give it a go.”
Get expert advice for your new start up business by contacting Bradleys Accountants in Welling today.