Image via WikipediaAs a result, you may find funds a little tight for other things such as software, a computer and related hardware. So what options are there?
Firstly, lets take a look at most of the tools every business will need:
- Telephone & Fax Machine - mobile will do but a fixed line is handy as some customers may not like ringing a mobile number. A fixed line number seems more trustworthy to many. Also, if you want a real fax machine (as averse to a 'virtual fax number') then you really need a fixed line, though you could share the same line for broadband, phone and fax by using VOIP (Voice Over Internet Protocol) for the fax. BT offer this service with their Business Broadband option.
- Computer with broadband connection - an essential item these days, especially f you are going to have a web-site and use email. Yes you can get email on your phone but its not as easy to write an email on your phone as it is on a normal screen! Laptops have the advantage that you can take them with you on business trips or when visiting clients. Desktops tend to be cheaper for the same features and power. Of course, if you have a computer then you will need other things like printer, back-up drive and monitor etc.
- Office - you may work from home but you still need some dedicated office space, even if it's just as spare room or the garden shed! you need to be organised and have room for files, documents and if you sell stuff too, stock.
- Stationery - such as letterhead, invoices, files, writing materials, paper and inks or toner for your printer.
- Desk and comfortable chair (2 or more if you see clients at your office). Comfortable is very important and its worth paying a lot of attention to the ergonomics of your working environment - not just chair, desk height, monitor position, keyboard and mouse but also light and air, as well as heating. You want to be as alert and comfortable as possible when working. Poor environment can lead to health issues and tiredness.
- Vehicle - not essential if you don't deliver anything to clients and you don't need to pick things up. You can always use public transport or taxis if you need to get from A to B and back. It's also much greener. However, if you do need one you need to weigh up the various features and costs. A family car may do for the occasional trip with stock but if you regularly need to transport physical items then a van may be more appropriate and if you are VAT registered you will be able to off-set the VAT. Also, leasing is an option for a business. A compromise may be an estate car which can double up for family and business use, though the accounting side gets complicated. This brings us to the next topic.
- Accountant - every business needs an accountant. I recommend finding one before you even start your business in fact. They can help you decide what kind of business set-up is right for you (sole trader, partnership or limited company). They can even register everything for you, advise you about matters such as VAT, PAYE (if you employ anyone) and even register your company with Companies House if you decide to set up a limited company. They can advise you too about what software to use and may even have put together a spreadsheet you can use when first starting out that calculates things like your profit (or loss) at any given point in time. Some accountants are specialist so look for one that specialises in your sort of business.
- Telephone and fax - when starting out its tempting to spend lots of money on gadgets. believe me, unless your business revolves around being on the phone all day or sending out hundreds of faxes a week then you just need the basic phone and fax machine. Also, check if you provider has any deals. if you have an existing phone line then you may find that they will install an extra line for business use free of charge and may even offer money off your broadband if you take all three as a package. Remember, you don't need to have a specific business package or contract. You can just add it to your household one and then claim just the business ones as a business expense. As long as you can show the cost separately, then the tax man will be happy.
- Computer equipment - again, same rule applies. Don't go overboard. A basic computer and monitor with cheap laser will suffice in the early days. Only if you are somebody like a graphic designer or a photographer will you need a more featured model. You can save hundreds of pounds here by buying something that is sufficient for the use you will make of it and not getting the latest whizz-bang PC your teenage son would drool over to play computer games!
- Working from home has its advantages and disadvantages - its certainly cheaper than renting business premises but if you need storage beyond the garden shed or garage amount of space, r employ people, then working form home won't cut it. Sure you can bring work home but beware the pitfall of not keeping work and home lives separate. We all need a proper work-life balance to keep our sanity. If you need to rent then look for places with short leases so you aren't locked into expensive long-term contracts. Also, check your local Business Link centre and see what deals are available for new businesses. Often the government or local authority will offer cheap office space or rent-free periods to encourage local enterprise. There may a local scheme where you hot desk and only pay a nominal fee to rent access to an office, photocopier, WiFi network and meeting rooms, paying only for the time you actually use the facilities. These are great if you spend most of your time out visiting clients and are able to work from home some of the time.
- Stationery etc - again, the cheap brand of paper will do for the fax machine and the printer. Only use more expensive paper when its essential, say in preparing brochures in-house or printing photographs for clients. Places like Staples are a good place to buy, or order online for more savings still. Saves time and petrol too.
- Office furniture can be horribly expensive - try second-hand when first starting out. Only if you need to impress clients should you consider buying anything but budget. The only thing is, make sure that your chair is comfortable if you want to avoid back problems etc. You can still buy second-hand and in fact, this is a good way to get a higher specification for the same price as new or less. Buy in sales too, as places like Staples often have sales with big discounts when product lines are changing. Also, if you buy everything at once when setting up form a place like Staples, but open a business account at the same time, you will usually get 10% or 15% your first purchase!
- Vehicle - if you can't afford a new vehicle then buy one that's a couple of years old from a reputable dealer and save on the depreciation. Another option is leasing which means you save your capital for other things like stock. It can be tax efficient too.
- Accountant - relying on personal recommendation is more important than just going for the cheapest price in my opinion. It will work out cheaper in the long run. Also, if you can find one that is familiar with your type of business that will also prove beneficial and there may other pluses too, such as more knowledgeable accountants familiar with your business may know of ways you can save money and of schemes that benefit your business.
That's all for now. I hope to cover software tools in more depth is another post.
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