THE FINANCIAL IMPACT OF OWNING YOUR OWN BUSINESS
Many of us dream of owning our own business. Whether it’s for the joy of doing something we love, the allure of being our own boss or the thought of building our own empire and leaving a lasting legacy. The dream, of course, is that owning your own business will ultimately lead to the financial freedom required to enable you to live the lifestyle you desire.
If it were as simple as setting up a business and watching the cash roll in though, everyone would be doing it. It’s important to remember that whether your business is large or small, turns over hundreds, thousands or millions, there will always be expenses involved.
Staff and subcontractors are often the main expense as when cashflow issues strike, they still have to be paid. Even if you work alone though, there will be travel, computers, stationery and accounting costs to consider.
INSURANCE AND LICENSING REGULATIONS
Depending on your industry you may need public liability and professional indemnity insurance. Are there any other licencing costs or legal documents that must be obtained?
PRODUCTS AND SUPPLIES
How much stock do you need? Where will you hold it? What are the lead times if you run out and when do suppliers need to be paid? All of this will affect your cashflow.
MARKETING AND PROMOTION
How will people know you exist? A website requires building, maintenance and ongoing content. Will you pay for print or digital advertising? Will you have networking or membership costs?
LOANS AND BORROWING
Do you need to borrow from the outset? When will these costs be repayable and how will they affect your daily cashflow? What happens if you can’t make your repayments?
GETTING YOUR DUCKS IN A ROW
The expenses associated with owning and running a business might sound terrifying, but if you have a profitable business then they don’t need to be. It’s all about striking a balance between money in and money out and, importantly, having a financial plan.
We can help with many of the financial aspects involved in running a business, from business protection and private medical insurance to group pensions and auto-enrolment. For more details, please get in touch.
This article does not constitute financial advice and should not be construed as such.