While there can be significant costs to consider when starting a business \u2013 and potentially even more once you\u2019re up and running \u2013 a little forward planning can help you figure out if your business idea is financially feasible.<\/p>\n\n
This is an important question to answer for the specific business you want to set up, as costs can vary greatly depending on the location and industry you want to get into.<\/p>\n\n
Once you have the answer, it\u2019s important to work out whether you have access to the funds you\u2019ll need to get started and then keep your business going.<\/p>\n\n
According to the Office for National Statistics<\/a> less than half (42.5 per cent) of the UK businesses that were started up in 2014 were still going five years later.<\/p>\n\n Unexpected costs and poor budgeting are two of the main reasons for the high business failure rate<\/a>. You can keep track of your budget with our budgeting guide and free template<\/a>.<\/p>\n\n Keep reading to understand some of the most important start-up costs for a business in the UK.<\/p>\n\n Many new business owners don\u2019t seek any professional advice before starting their venture, yet the planning stages of a startup are likely to be the most important. It may, for example, help you to get professional advice to choose your legal and financial model.<\/p>\n\n Read through our advice and resources for UK small businesses<\/a> and guide to legal obligations<\/a> for some helpful signposts.<\/p>\n\n It\u2019s worth considering how much you might need to spend on legal advice and the services of an accountant<\/a>.<\/p>\n\n Many solicitors and accountants will give a first consultation for free, particularly if they think you\u2019re likely to go on to be a regular client.<\/p>\n\n If you expect your business finances to be particularly complex, you may want to think about paying an accountant a retainer fee so you can consult them whenever you need advice.<\/p>\n\n Depending on your circumstances you might choose to set up a limited company<\/a>.<\/p>\n\n While it is relatively cheap to do this directly through Companies House, most people choose to use an intermediary firm to complete the paperwork.<\/p>\n\n This process starts at less than \u00a315 for the most basic online service, but can easily run to hundreds of pounds, particularly if you use a registered office.<\/p>\n\n It\u2019s also worth remembering that The Companies Act requires company directors to provide their ‘usual residential address’ to Companies House.<\/p>\n\n If you also choose to provide your home address as the ‘service address’, this will be on public record. You can choose to use an address hosting service with a formation agent, solicitor or accountant, which will incur a fee.<\/p>\n\n Unless you\u2019re planning to work from home, you\u2019ll need to find business premises<\/a>. Relatively few businesses own their own premises \u2013 instead, most lease from a commercial landlord.<\/p>\n\n Many commercial leases, particularly those for retail premises, operate on a quarterly rather than a monthly basis. This can mean that you\u2019re landed with a hefty bill every three months, rather than a smaller bill each month.<\/p>\n\n This can be one of the main reasons retail businesses run into financial difficulties, so it\u2019s worth making sure you plan for this before you set up shop.<\/p>\n\n If you need office space rather than retail premises, you might want to consider serviced office leases. These offer you far greater freedom, shorter agreements, scalability, and the opportunity to pay monthly.<\/p>\n\n Finally, serviced leases almost always include business rates<\/a>, which can otherwise be a major financial burden over and above a regular lease.<\/p>\n\nBusiness costs \u2013 a guide for small businesses<\/h2>\n\n
Legal and business advice<\/h3>\n\n
Company incorporation<\/h3>\n\n
Business premises<\/h3>\n\n