What financial outlays should you be prepared for as you get this Business of yours up and running?
20 years ago, the costs associated with starting a business were huge and it was something that we could only really consider if we had an independent source of funding or were independently wealthy. So for a lot of people, it really wasn’t an option.
Thanks to the amazing advances there have been in technology it is now possible to start a business with a much lower level of investment.
We don’t usually need premises. Businesses can be run from home, meetings can take place online, in coffee shops, even from your car. All we really need is a good wifi connection.
Face to face meetings and delivery sessions will usually take place at the Client’s premises and if needs be there are serviced offices where you can book a meeting room for a Day, a half day or just a few hours.
So here is my take on what you do – and won’t – need to plan to spend your money on in the early years of setting up your business.
Good quality home office equipment
A laptop, a printer, a mobile phone with a decent data allowance, a good wifi connection. These are the tools of your trade and it is important that you have reliable equipment.
A website, a domain name, an email address, hosting fees, an ssl certificate
You don’t need an expensive bells and whistles website – as long as it is well put together and is easy to navigate. Lots of people spend a fortune on their first website and it isn’t necessary. A good virtual assistant can get a site set up for you quickly and easily – or you could learn how to do it yourself. All you really need to get started is a simple site with
- A Home Page
- An About Page
- A Services page
- A Blog page (if you are using Blogging)
- A Contact page.
- Domain names are easy to register online and very inexpensive. Always register it yourself – If you decide to use a website developer and they register the name then you won’t be able to take it with you at a later stage and you will lose access to your website.
- You will usually get an email address with your domain name but if not you can order one separately. Don’t be tempted to save money by using a free one to start off with – it will make you look cheap and unprofessional to potential clients.
- Hosting – you will need to pay a hosting company to get your website onto the internet. These fees can be paid annually or monthly
- SSL Certificate – there is an additional fee to get an ssl certificate for your website (this secures and encrypts it so your website visitors don’t get a ‘Insecure site’ message when they click on your website – not exactly good for business!!
Business Networking fees
These range in price from free (just pay for your drinks) to upwards of £25 for a meeting. Some also charge annual membership fees. There are 4 main types of networking groups
- Free – Informal, unstructured, drop in sessions
- Pay as you go – Meeting fees but no membership fees. Booking is usually required. There will often be a theme and / or a speaker and a structure to the event.
- Membership (open) – formal, structured sessions. Regular meetings – weekly, fortnightly or monthly. There will be an annual fee to be a member and usually meeting fees as well. Most groups will allow you to attend as a visitor for a few sessions but for ongoing attendance you will need to join. Membership is open to anyone who wishes to join.
- Membership (closed) – formal, structured groups. Meetings will usually be weekly but can be at wider intervals. There will be a strong emphasis on generating referrals and business among the members of the group. There is an annual fee to be a member and individual meeting fees. These types of groups will only allow one member from each sector so if there is already a HR person in the group then you won’t be able to join.
Insurance, legal fees – You will need to do your due diligence to identify exactly what insurance and legal fees you will be required to pay. It is likely to include some or all of the following.
- Professional Indemnity insurance
- Public liability insurance
- Employers’ liability insurance
- Membership and subscription fees for statutory industry bodies
- Registration with the Information Commissioner’s Office
- Limited Company registration fees
(Please note that this list is provided for illustrative purposes only)
An online diary scheduler
Not essential but something that will take a lot of the hassle out of your day. You can input your availability, send the link out to potential clients and then they can schedule in a time that suits them which then links straight to your online calendar. It looks professional, it prevents all of that, “Can you do Tuesday at 10am?” to-ing and fro-ing and it’s much less subject to error.
The fact you are working for yourself now doesn’t mean that it is time to stop investing in your skills and personal development. There will be a lot of new skills that you need to master now that you are a Business Owner.
A Client Relationship Management (CRM) system
Again these do not have to be high end and expensive but you will need a system to keep track of leads and clients.
These are becoming less widely used now that everyone is directly connecting online but you will still need some to give to people if they ask.
(Or a good accountancy service) – also it is really important that you remember to put money aside to pay your business taxes
You are unlikely to need
- Headed Paper
- Compliments slips
- A massively expensive website
- An e-commerce system
- Branded pens and mouse mats or mugs or any of those other gimmicky things.
- An office
You will definitely need some start-up money. Access to the internet doesn’t mean that you can start a Business for free – well not if you want it to be successful anyway! But most things you need are widely available and often at a very low level of investment.
A lot of Businesses fail in their first 12 months and in my experience one of the main causes of this is not planning for how to meet your financial obligations while you are getting your business established. It may take longer than you think to start getting clients and making money so you will need a financial plan to cover you in the meantime.
The absolute key rule of thumb is that you need to be investing in things that will make it easier to run your Consultancy Practice in a way that builds trust and a sense of reassurance with your potential clients, and you need to meet any legal and regulatory requirements.
At The HR Business Consultancy School, we help HR Consultants to grow and develop their businesses at all the different stages including,
- The Pre-Launch Business planning stage (From 12 months before launch
- Start Up (0 – 3 months)
- Getting Established (3 – 12 months)
- Business Growth (12+ months)