What Are the Real Costs of Starting Your Own Business?

Starting your own business brings its own advantages and pitfalls. But you also need to be aware of the potential costs. How much a business start-up will cost you depends on the type of business you are starting, but it can range from a $1000 for starting a franchise to several thousands of dollars for a micro-business.

But even if you can’t exactly determine how much starting a job will cost, you should know that everything you spend before making any profit is calculated as the start-up cost.

So, in order to understand how much starting your type of business will cost you, it is essential to look into the types of expenses made before your business starts generating money.

What Types of Expenses Are There?

Expenses start with the idea of starting a business. There are legal expenses you are required to cover in order to register a company. You will incur further costs if you want to have a company logo designed, print out company brochures or simply set up a website. Depending on your place of business there could be state, county, or local permits you need to file for and many require either one time or a yearly fee.

Your startup assets are also a part of the expenses that should be calculated into the business startup costs. This comes in the form of cash in the bank or a starting inventory. Buying or renting office space and equipment also falls into this category.

There is also startup financing, which includes capital investment and loans you might take out to start your own business. Many banks will offer loans but require you to provide a business plan that will explain your expected cost and revenue predictions. The same is necessary for state-provided grants and incentives you may file for when starting a new business.

Besides Costs, What Else is There?

The rest is a big learning curve that you have to climb. You want to reach a point where the business is working for you and you are not working for the business. To achieve this, it is essential to learn the tricks of the trade. Learn as much as you can, because it can all be used to run your own business, and also make the starting of your own business a lot easier.

Finding the right people to work with is also something you can’t ignore because great people mean great service and great products. And if you are looking to make a significant profit, don’t take jobs or buy items that will bring a slim profit margin on resale.

One of the main goals is to simply aim higher than just a monthly wage. You should aim at making a major profit.  

I Want to Start an Online Resale Business. How do I do it?

Starting a business from scratch is good because you are building everything up. However, it might be a better idea to buy an undervalued business and start from there.

But the first step to take is to gather all the information about the legal requirements you need to fulfill in order to be on the right side of the law. Make sure you have the right permits and you know what your tax obligations are.

In terms of the online resale business itself, there are several steps you need to take to ensure yourself the best chance of success.

In short, the first goal is to scout the market. This will give you an insight into the market dynamics and allow you to exploit small pockets of undersupplied niche markets.

Finding a niche market is essential for newcomers to the business as it allows you to service a segment that has a healthy demand and less competition. You can start purchasing and selling products you are familiar with and that are in high demand, like smartphones or tablets. However, basing your business choice on the fact that you feel comfortable dealing with a product can lead to problems. In the cases of smartphones and tablets, this is especially noticeable. The electronics market in general is the most competitive market where sellers fight for every customer. You will see prices of single products hovering just above wholesale.

In that case, you have to find an adequate supplier. Firstly, this means sourcing from a reputable and reliable source that is able to provide you with items you need, every time you need them, without compromising quality and service. The best way to give yourself a fighting chance in a competitive market is to purchase in bulk. Buying from wholesale suppliers of liquidators is the best choice. However, which of the two options you choose depends on a number of factors.

Both options allow you to buy products in bulk, by the pallet or a wholesale lot. The difference is that liquidators offer lower prices than wholesale suppliers. To understand this, you have to understand the value chain. Wholesale suppliers buy merchandise from retailers or manufacturers by truckloads, sort the merchandise and sell it on for profit. The same stands for liquidators, the only difference being that liquidators don’t purchase the merchandise, but act as a gateway for retailers and manufacturers to quickly sell overstock, unsold merchandise, customer returns or refurbished products.

This raises the question of quality and you are right to always ask that question anytime you buy from either a wholesaler or a liquidator. In truth, the majority of merchandise sold by liquidators is either customer returns or refurbished items. But by no means should you just walk away from it, as you might miss on a good opportunity to earn some serious cash by selling refurbished products.

To give yourself the best chance of success in the online resale business and to keep your costs as low as possible, we have compiled the Ultimate Guide to Selling on Amazon that will lead you through every step of the way, from planning, setting up your business, sourcing merchandise to selling and making profit.

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Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

View Henley’s Bio on YouTube.