Many small businesses can be started with only what you have at hand. Consulting, design, writing, mowing lawns or tutoring all require only the tools that many people already have.
But, there are additional costs you need to factor into your start-up financial plan.
Filing Paperwork
While much small business work can be done without official paperwork there will be a point where you have to file paperwork.
You need to budget for this. From discussions with a lawyer and CPA to filing fees, you can expect to spend a minimum of $500 making your business a separate entity from yourself.
Budgeting Your Growth
After paperwork, the next major area of capital to consider is the cost of growing your business.
When Small Time Marketing helps businesses grow, the minimum recommended budget is usually between $1200 and $2400 a year.
Many marketing plans cost more.
Of course, you often can get by without spending money on marketing. If you are able to sell your business to customers and capture referrals from them, you can grow a lot in the early stages with limited spending.
Property, Plant and Equipment
This line item in a business plan is the largest capital cost that any business startup will have to face.
Everything else can be cashflowed.
Manufacturing, certain service jobs, or a business that requires certified equipment to use (think food service) will require additional funding sources beside cashflowing.
In the following series, I will go more in depth on different ways to raise capital: debt, equity, cashflow, and crowdfunding.