How much do you need to start a business?
A key question for people setting up in business is how much capital you need to start.
Well, like most answers to business questions, it depends. In this case it depends on things like:
- Are you leaving a job and taking clients with you?
- How good are you at sales and marketing?
- What price point are you going to market with?
- What is your personal network like?
- How good is your idea?
- How strong is your personal brand?
- What are the set-up costs?
All of these questions determine how much money you will need but so does your goals.
For example, at one extreme you maybe a highly regarded market research consultant who has many years experience and lots of business contacts. A simple Website, some business cards and some LinkedIn messages maybe enough to get you to the position where you are making the same as what your salary.
But, if you want to create a leading edge Market Research Agency then the funding required will probably be very different. This is because you will need to consider winning business outside personal network which will require a significant commitment and investment in marketing.
As well as the marketing you will need to fund employing people to do the service delivery (because you can’t do it all), premises, equipment and administration costs.
As a rule of thumb I think £25,000 is required. This may not be all on day one, and you can test the market before you leave any job, but at some point you will need to go full time. And, at that time you will probably not have enough money to cover all the business costs and your wages.
If you are thinking of setting up in business and want to work out how much you’ll need then our Get Set service will help you.