Hey! Tell me something. How fantastic is it to solve an existing problem in society? Being that one individual or name, that understands a problem and comes up with a solution. Do you understand the feeling? If yes, then you are that one individual who aspires to build a startup or has done that already. Am I right?
Well, this comes with a lot of hurdles, I agree. But none of them are impossible to overcome. I mean, there’s a solution for every problem and you know that best (being an entrepreneur).
And the resource you’ll need the most is–you guessed it–
But, do you know how much it will cost to turn your idea into a viable business? It is absolutely crucial that you’re aware of the various costs associated with building a startup. Only then will you be able to plan your budget accordingly.
And we all know how important budgeting is! That’s why in today’s article, we will examine the various startup-related expenditures.
Make sure to keep them in mind in order to make your startup successful!
In addition to that, get the perfect startup starter kit with TheCodeWork’s Startup Ecosystem! Be it tech support, funding, branding, or legal framework– find everything under one roof!
And now, let’s get to the matter at hand– startups and their related costs. Bring out your notebook and pen (and your inner accountant); let’s jump straight in!
The Top 5 expenses to build a startup
How much will it cost to launch your startup? The truth is, it’s difficult to state exact numbers. However, you can –and should– make an estimate based on your business plan. It’s crucial that you start planning early to avoid any major unexpected expenses.
So here’s a list of the top 5 startup costs that you should keep in mind when you build a startup:
➡ Your product development
First and foremost, you have to get a working prototype of your product idea up and running. Now, you have two options here:
(a) Spend tons of time and money on making the best, swankiest possible version of your product, or
Go for the second option and build a Minimum Viable Product for your business. A minimum viable product (MVP) is the most basic version of your product that showcases the exclusive features of your idea. It is like a cake without the icing–basic but does the job. Not to mention it can be developed in a fraction of the time and money!
So in order to build a startup, the choice is pretty obvious, don’t you think? What’s more, deploying an MVP will let you obtain some (much-needed) market data and customer feedback. It’s a win-win, for sure!
Want to find the best product-market fit for your awesome idea? Build an MVP!
The next most important part of your startup–after your key product/service–is your team. And you don’t want to skimp on the talent, do you?
So, once again, you have two broad options here:
Hire an in-house team– Here, the team works together to deliver results efficiently and consistently. Your team is in it for the long haul and will help you to overcome challenges. But, in-house teams often come with a steep price tag. Not to mention it takes time to hire the perfect team members. And honestly, it is not advisable for early-stage startups. However, if you have the financial backup, why not?
Outsource your work– Until you build your own team, you can always outsource the talent. Outsourcing is very cost-effective and convenient for budding startups, and it gets the job done! And how can we miss the experience of the outsourced team that comes at a budget?
You can choose to outsource your talent separately– for tech support, marketing, branding, or legal framework. Or, hear me out– you can get all of these under one roof with TheCodeWork’s Startup Ecosystem!
So you have got your product and your team. Now what? Well, now you have to promote your business and create an online presence. Keeping this in mind, you must set aside a reasonable amount of money for sales and marketing.
You have to make your presence known on multiple platforms. This is the digital era, and digital marketing is the name of the game. So, set your sights on digital marketing strategies to attract–and retain– your customers. You can opt for –
online PR, and, most importantly,
Or a mix of all these. But remember, you must adjust your budget according to the number and type of marketing strategies you choose.
Additionally, in today’s digital landscape, you’ve simply got to have a website. Very few businesses operate without one these days. Whether you build your own site or outsource an expert to build one for you, you’ll need to budget time and money to establish your presence online. That’s what scales you to the concept of branding anyway.
Last but not the least, your office space is another expense you need to allot funds for. In fact, a workspace is one of the biggest expenditures when you set out to build a startup? In an early study done by professor Amarnath Bhide, 80% of startup capital is used up to get office space (sighs).
But things are slowly changing. Wherever you are, it is less expensive to start a business nowadays. Things like cloud services and work-from-home policies have revolutionized how–and where–people work. (one of the silver linings of the global pandemic I believe)
Even so, there is no real substitute for face-to-face work interaction. At some point, you are going to have to get yourself a workspace. You can always rent an office space.
You can save some major bucks by adopting work-from-home policies or opting for coworking spaces. Co-working spaces are not only cost-effective but also give you the opportunity to network with similar small businesses in a shared space.
Tell me, doesn’t that just sound awesome?
Summing it all up
Starting a business is money-consuming. There are so many expenses you need to think of and save up for.
But you know what? It is also extremely rewarding. And now, with TheCodeWork’s Startup Ecosystem, it is easier than ever to raise funds for your startup. Allow us to connect you with potential investors and turn your dream into a reality!
In the meantime, we are here to help you get your business up and running–in every way possible. Reach out to us if you have any startup-related queries. We are in this together!
Our Content Team at TheCodeWork believes in quality content. We write everything related to startups and products at large. We publish our blog every alternate Wednesday. Subscribe to our newsletter to get notified of our awesome content.