Save Money in a Home Business Start-Up Washington DC
College Park, MD
College Park, MD
Save Money in a Home Business Start-Up
When Times are Hard, Keep Your Start-Up Costs Under Control
By Nora Caley
The economic downturn has caused many businesses to decrease their spending. If you are starting a new home-based business, you can keep costs under control from the very beginning. The key is to plan ahead, and shop around.
First, estimate how much it will cost to start your business. Create a spreadsheet that lists your probable expenditures. You can use Microsoft Excel, which comes in the Microsoft Office suite of software products. There are also open-source, or free, programs such as OpenOffice.org Calc, Google Docs, and other online spreadsheets.
Make a list of your start-up expenditures. Start with office equipment such as the computer, fax machine, telephone, printer, and software. Don’t forget to include the cost of learning how to use certain software, or the cost of having a technology professional set up the computer.
If you’re in catering or another food-related business, input the cost of the mixer, utensils, oven, and other equipment. You might need to buy a larger washing machine, a new sewing machine, landscaping equipment, or other items.
You might need furniture, such as a desk, tables to assemble your products, file cabinets for your sales and other paper records, and shelves. Are you going to have people come to your home, such as for daycare? Check with your state and local government regulatory agency for rules about square footage, how much fencing you need around your yard, and other details that will add to your costs.
If you are making a product, include an entry for your raw materials. That could be fabric, food ingredients, or even paper. There’s also packaging.
Don’t forget miscellaneous items such as cleaning supplies, printer cartridges, and books that describe how to write a business plan. If you have people coming to your home, do you have to take a class in first aid?
Another category is transportation. How will you ship your products, or will you be delivering them to customers? Are you providing a service for people at their homes or offices? Do you have to pick up your raw materials?
There’s also insurance. If you have people coming into your home, you will need liability insurance to cover you if a customer or employee is injured.
You might want to buy disability insurance, if you are self-employed and you will be income-less if you become too sick or injured to work. Disability insurance payments can cover about half of your monthly income. Make sure you have enough auto insurance to cover those extra miles of client visits.
Your homeowners’ policy might not cover your business equipment if your home is damaged by fire, theft, or weather. Also, the policy might not pay for an employee becoming injured while working in your home. Check with your insurance agent to see what your policy does cover. If you are renting, find out what your renters’ insurance covers....