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How Much Does It Really Cost to Start a Business?

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You have a great business idea that can change people’s lives. You are eager to turn your ideas into reality. However, you are afraid that you might not have the budget.

You must be wondering how much does it cost to start a business. You be surprised by the answer, and there is a possibility of making it happen. Continue reading to learn more about the costs.

How Much Does It Cost To Start a Business?

When starting a business, there are several costs to consider. We’ve detailed everything you need to be aware of here. From one-time expenditures to recurring expenses.

Fees for incorporation

Before incorporating your company or opening a business bank account, you must choose a business structure. Your company structure sometimes called a “legal structure,” is critical. It affects how your firm is taxed, your responsibility, and your organization’s capacity to obtain capital.

There are four primary company structure types:

  • A corporation with limited liability (LLC)
  • Individual proprietorship
  • Corporation
  • Partnership

Small company owners often choose LLCs due to their tax advantages and liability protection. Additionally, they need less paperwork and are usually less costly to create.

The fees associated with forming an LLC vary by state. For example, in Arizona, there is a one-time filing fee of $50. However, Massachusetts requires a $500 filing cost and an extra $500 yearly charge. 

Purchasing Commercial Insurance

There are many kinds of company insurance available. Some of which are mandatory if you have workers. Because state regulations vary significantly, the following is a list of typical insurance plans you should be aware of:

  • Worker’s compensation
  • Unemployment insurance
  • Disability Insurance
  • General liability Insurance 
  • Property Insurance 
  • Errors and Omissions 

According to Progressive, small company owners spent an average of $732 per year for BOP and $2,304 per year for workers’ compensation in 2017. While the overall cost may vary, business insurance is a necessary safety net for the life of your company.

Renting a Commercial Space

Rent varies significantly by company type and location. For example, some internet companies avoid the expense of rent and overhead entirely by operating from home. While others operate from coworking spaces to save on office space expenditures.

To quantify it, however, we need to go beyond rent averages and consider what percentage of your income is on rent. The following is the average rent proportion of income in their respective industries:

  • Restaurants: 6% – 10% of revenues
  • Retail shops: 5% and 10% of yearly revenues
  • Automobile dealerships: 12–13% of yearly revenue
  • Law firms: 6% – 7% of income

To make this more applicable to your circumstances, you should crunch the figures yourself to see if a place you’re interested in is financially feasible. To begin, you must ascertain your sales per square foot.

Costs of equipment

If you’re beginning a landscaping company, you’ll need to buy the required tools and equipment to transport it. You’ll need espresso machines, refrigerators, coffee pots, and coffee cups if you open a coffee business.

If you lack the means to purchase your equipment, you may check out top SBA lenders. The lender can provide you with a business loan and payment plan.

Costs of labor

If you want to hire assistance, then you need to think about costs of labor. Apart from wages, you must consider other forms, such as perks and employment taxes.

If you’re having difficulty calculating employee payroll expenses, there is a rule of thumb that may assist you. You can expect to pay up to 1.25-1.4 times their annual wage. If you pay someone $35,000, you may pay them between $43,750 and $49,000.

So, How Much Is the Startup Cost of Starting a Business?

The truth is that it depends. Depending on the kind of company you want to establish, here are a few benchmarks to consider:

  • $11,000 for administrative and custodial services
  • $14,000 for construction
  • $14,000-$18,000 for professional services
  • $27,000 for healthcare
  • $32,000 retail
  • $75,000 for real estate
  • $125,000 for restaurants

Most small business entrepreneurs lack the money necessary to finance their ventures. If this describes you, one possibility is to investigate small business loans. The best loans for businesses are the ones with low-interest rates and low monthly payments.

The Startup Prices of Starting a Business in Different Industries

The following are some typical starting expenses. These are just averages and estimates. Many small company entrepreneurs launched their ventures for less than half of these typical expenses.

Restaurants

The average cost of opening a restaurant is $125,000. You may also choose to purchase a restaurant franchise, which would substantially decrease your start-up expenses. Restaurant franchises typically cost $25,000 to $50,00 on a modest budget.

Another possibility is establishing a food truck. It may cost you from $30,000 to $200,00.

Real Estate

After completing the course, which costs around $700, you have to take an exam. After passing the exam, you will need to locate a real estate broker. The broker takes responsibility for the day-to-day operations saving you those expenses.

Most brokers charge anything from $25-$500 per month, so you may function as an agent. Tax-related expenditures include yearly membership dues ($200) and marketing fees ($1,000+) for:

  • Business cards
  • A website
  • Promoting your properties
  • The gas money you’ll spend seeing homes
  • The lunches with clients
  • Expenses for a home office. 
  • Continuous education ($50-$300 each year)

All of these costs can rapidly pile up as start-up expenses in a real estate company.

Health Insurance

Providing health insurance to companies and people may be a profitable venture since everyone needs protection. The cost of establishing a company in this category vary from $5,000-$50,000 and include these common expenses:

  • General education and ethics courses that costs $300-500 per course 
  • Licensure test which is $50 per exam
  • Fees for an office
  • Management software which is about $50-$300 each

You may strike the ground running by buying another agent’s customers. These fees are negotiated between agents and constitute most of your start-up expenditures.

Are You Ready to Start Your Business?

Now that you know the cost to start a business, it’s time to budget wisely. You can save up for a few years, get small business loans, or ask a family member for help. The goal is to turn your dreams into reality.

If you are still unsure and want more information, we are here to help. Read our blog to learn more about starting a business.

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Business

5 Revenue Accounting Mistakes You Don’t Want to Make

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Revenue Accounting

Many people think that accounting is boring and fail to appreciate just how much value it creates for the modern world. In the United States alone, the market for the accounting industry is worth more than $119 billion every single year!

Of course, there are a lot of common revenue accounting mistakes that detract from the value of proper accounting. Avoiding these mistakes can mean saving your company a lot of stress, time, and even money.

So just what are these common revenue accounting mistakes and how can you avoid them? Read on to learn all about the most common revenue accounting mistakes!

1. Keeping Records Incorrectly

Many people fail to keep records correctly because they do not find the work very interesting. Even modern digital filing techniques, which have made the whole process much more convenient, have failed to make the process interesting for most people.

If you end up in a tax audit, it is absolutely essential that you have all of your records on hand. Your receipts and other records need to be organized so that you can find them if you ever need to prove that you have been conducting yourself appropriately.

2. Few Checks and Balances

In some businesses, especially small ones, a single person is in charge of all financial matters. Unfortunately, that means that there is a single point of failure. Checks and balances are important to make sure that everybody is doing their absolute best to engage in accounting with integrity.

Setting up checks and balances can help everybody feel at ease about the integrity of accounting decisions.

3. Fiddling With Closed Periods

It is important not to mess around with closed accounting periods. Once they are closed, the data in them is used to inform financial statements and other official documents. Changing them can cause disagreements in your records and statements.

4. Falling Behind on Bank Reconciliation

It is important to reconcile bank and credit card statements regularly. Although this can be tedious, it has to be done over and over again to avoid serious errors. Don’t think that you can skip it without exposing yourself to problems down the line.

5. Exaggerating Revenue

There is a long list of reasons that people can accidentally overstate revenue. For example, people can mix up received revenue with accounts receivable. Whatever the reason, a lot of people accidentally overstate revenue.

Look at every category of transaction that could be mistaken for revenue. Make sure that everybody understands what counts as real revenue and what does not.

The more you learn about the most common accounting mistakes and business accounting errors, the more interested you might be in finding small business accounting solutions for payroll mistakes. To learn more about how to manage cash flow mistakes and other common errors, click here.

Avoid the Most Common Revenue Accounting Mistakes

We hope that you were able to learn something helpful from this short piece on some of the most common revenue accounting mistakes that you would want to avoid in your business. Although it can take a long time to learn all of the nuances of proper accounting, doing so is an investment in your future business success.

To keep up-to-date on the latest developments in business, finances, and more, take a look through our other articles!

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Scale a Business: 3 Tactics for Operational Success

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Scale a Business

Are you looking for some growth strategies that can help you scale your business in the upcoming year? If you want to grow your business successfully, you need to make sure that you have a clear plan in place. 

For some tips on how to scale a business successfully, keep reading. In this guide, we will give you some business strategies that can help you scale up in the new year. 

1. Team Build for Success 

In order to scale your business, you need to make sure you have the right people on your team. Growing your business is impossible to do on your own. Rather, you will need assistance from professionals and talent in your industry to work on moving your business up to the next level.

As a business owner, you want to start by ensuring that you have sharpened managerial skills, as properly managing your team is a must for success. Additionally, before attempting to expand your company, you will want to make sure your managerial processes are streamlined for optimal results. For example, look at where there is a need for improvement in areas such as training, onboarding, and recruitment. 

This will allow you to ensure that you are prepared to properly grow your business and team, as you will effectively find and bring new talent onto your team, setting them up for success so that they can integrate as an integral part of your team. Many business owners chose to hire recruitment as a service in order to save time while finding the best talent available. 

2. Focus on What Sets You Apart 

Often, when it comes time for organizations to grow, the leaders behind the business will begin brainstorming on what new products or solutions they can offer their clients. However, this is not the best way to grow your business and can result in chaos. Instead, it is best to take a look at your current core offerings as well as what sets your brand apart from others in your industry. 

Then, make sure that you are optimizing these areas in order to make sure quality is at the core of your company. By capitalizing on what makes you different from your completion, you are able to fill a niche while targeting a very specific demographic. 

3. Streamline Business Processes 

Before you even begin to work on scaling your company, you will want to make sure that all of your business processes are streamlined and optimized for success. This will ensure that your business is even able to grow at all. Improving all business processes will allow you the efficiency and effectiveness you will need while working to grow your company. 

Scale a Business With These Tips and Tricks 

When it comes time to scale a business, you will want to start by working to improve all areas of your current company, team, product, and more. 

Head to the “Business” section of our site for tons of additional info and advice that can help business owners. 

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How to build a career with Business Analysis

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How to build a career with Business Analysis

If you are a professional who wants to be a change-maker in your organization or you wish to upskill in a data-driven discipline, opt for a Business Analysis Post Graduate Program and learn to manage complex business problems. 

Master the necessary tools and frameworks that set you apart in the hiring landscape. Become recognized in Business Analysis fundamentals with hands-on experience and tools that facilitate better business outcomes. A Business Analysis Master’s degree prepares you for job roles that call for advanced data analysis, complex decision-making, and management skills. It can help you grow within your company and increase your earnings. 

As organizations witness digital transformation, they are implementing more and more analytics, and those professionals who have the necessary Business Analysis skills stand a better chance at getting hired.

What is Business Analysis

Business Analysis is the technique for enabling change in an organization and solving business problems. It adopts methods that deliver the business objectives and identify solutions that maximize the business value. The set of tasks are prescribed in the Guide to the Business Analysis Body of Knowledge. The reference guide is the yardstick for the practice of Business Analysis and is designed for professionals who perform Business Analysis tasks in the organizational context. It mentions the core knowledge areas of Business Analysis, the skills required, the deliverables, and techniques to be used by serving analysts for desired business outcomes.

The practice of Business Analysis is a specialized body of knowledge that maps the path of leading a business to the target destination. It includes the effective use of analysis and techniques to achieve benefits, cut costs, identify new opportunities, and improve the way business is done. The business analysis adopts a data-driven approach by incorporating technology, statistics, and data modeling to harness new insights.

Why pursue a master’s program in Business Analysis

Postgraduate programs in Business Analysis are an emerging avenue of learning. These courses recognize that Business Analysis is used in most companies and tech start-ups keen to exploit market opportunities. Thus the demand is high for candidates with a master’s degree who can analyze data to solve business problems. Companies are also acknowledging skills required for the task of Business Analysis that only specialized programs can offer. 

A Business Analysis degree fits with a broad range of industries and hirers. Aspirants have a wide choice of job roles across industry domains.

With a master’s in Business Analysis, you can prepare for the following Business Analysis job titles:

  • Data Scientist
  • Business Analyst
  • Data Analyst
  • Business Data Analyst
  • Process Engineer
  • Product Owner/Manager
  • Digital Strategy Manager
  • Digital Data Analyst
  • Director of Research
  • Management Consultant
  • Systems Analyst
  • Process Analyst
  • Market Research Analyst
  • Project Manager
  • Senior Analyst
  • Senior Business Intelligence Consultant
  • Senior Business Specialist
  • Senior Staff Data Scientist

Very often, Business Analyst roles are hybrid roles, with responsibilities stretching beyond Business Analysis.

As Business Analysis professionals are highly knowledgeable about organizational processes, hirers are snapping up Business Analysis post-grads.

What is the career path for Business Analysis?

Most wannabe Business Analysts are faced with the challenge of how to land a Business Analyst job.  Do you start with experience in a small or medium-sized company? Is an entry-level job the first step to learning more about the world of business before taking a certification? Or should you take a course first? Confused with various definitions of a Business Analyst job role in different job descriptions?

To do away with any uncertainty, listed below is structured guidance on how to navigate the career path for Business Analysis job roles. 

1. Learn the fundamentals of Business Analysis

At the very outset, begin by building your knowledge about how businesses work. This is best achieved with internships or entry-level jobs. You get to learn first-hand the inner workings of an organization, whether big or small.

Before you commit to a career decision about Business Analysis, do some background research about what the job entails.

Understand what a Business Analyst does. There are many descriptions of a Business Analyst role. But some points are common and core to Business Analysis. The Business Analyst creates positive change within an organization and helps teams understand the why and what of the change and how they can contribute to the process. 

The Business Analysis framework starts with discovering the business objectives and defining the scope of the project. It is followed by developing a Business Analysis plan, defining the requirements in detail, ensuring technical solutions support the objectives, helping the stakeholders achieve the desired goals, and assessing the ROI of the value creation. 

Understand how a business operates and identify the skills you will need to become a Business Analyst. 

2. Sharpen your analysis skills

An analytical mindset is critical for the role. Sharpen your analytical thinking, and learn how to use data to define, study and solve business problems. Get a handle on the techniques used to measure a business’s operating costs, performance, efficiency, and so on.

3. Earn a Certification or pursue a master degree

Regardless of career history, a bachelor’s degree is a must-have. However, to become a Business Analyst capable of solving complex problems, you need to have additional specializations, either a certification or a master’s program that teaches you the necessary skills, tools, and techniques of Business Analysis. A master’s in Business Analysis not only advances your skills and knowledge base but also gives you a competitive advantage when looking for a job.

4. Work on projects

Apply your newly gained knowledge to real-world business problems. Practice on projects with different types of business problems and diverse data. Build projects that cover the various ways data analysis is used to meet business objectives.

5. Hone your visualizations skills

The analysis is incomplete without the ability to communicate your insights to the stakeholders and team members. Develop written communication and visualization skills. Learn to use charts, graphs, and interactive dashboards that allow team members to query and interact with your analysis. Excel and Tableau are good platforms to practice your visualization skills. 

6. Develop domain expertise

Different industries have varying business needs and challenges. Domain knowledge also gives you an edge over other applicants when applying for jobs.

7. Apply to Business Analyst job roles

Start with an entry-level role if you are a newbie. Internships and entry-level positions build your experience before you move on to a higher position. When searching for a job, watch out for titles like a junior business analyst or entry-level business analyst. Working and mid-career professionals must research the job, the company, and its business. What does the company do? What are the responsibilities of the job role? How do you fit in? Which role to apply for?

Summary

If interested in a career in Business Analysis, start by developing the above skill sets. Courses can empower you with a sound introduction to the profession. So get started by enrolling in a Business Analysis program for a career in Business Analysis.

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