This topic discusses the estimated startup costs for this business idea. Startup costs are what you need to pay in order to be ready to begin business operations. The amount of these costs also helps you decide if the idea suits you.
List of items in startup costs
Note: I am only showing one month for certain expenses. You should be able to get your first job or two in a month. Then these items become operating expenses, not startup costs.
The assumed startup costs for this business idea, using a frugal style of business operations, consist of the following items:
Advertising and promotion (1 month) -- Small classified advertisements in a local newspaper and/or national newspapers or magazines.
Business insurance (1 month) -- Business liability insurance. (Talk to a local insurance agent to see if this protection is really needed.)
Governmental requirements -- Local fees and business license. (Note: You might also be subject to state and federal deposits and registration fees, but these will vary. So I have not included them in these startup costs.)
Office equipment -- Business telephone, desk accessories (stapler, paper clips, pen and pencils, etc.), and listing adding machine. (Note: Use the kitchen table and chairs for your desk and chair at first.)
Office supplies -- Check blanks for business checking account, file folders or large manila envelopes (for filing papers), lined writing tablets, and pads of accounting journals and ledger.
Other operating expenses (1 month) -- Business telephone expense.
Reference book -- Bookkeeping for Dummies (Paperback). (Note: The "for Dummies" series of books are easy to read manuals for normal people, not dummies.)
Here are the dollar amounts for a frugal business operation:
Note: See the Planning costs and expenses subtopic in the Business Plan on another page for ways to reduce these startup costs.
This topic satisfies the Starting business operations subtopic in the Business Plan page.
Preparing for business operations
Completing the startup requirements -- This is the last step needed just before you start business operations. See the Listing the startup requirements subtopic in the Business Plan for the items remaining to be completed.
As a minimum, you should have discussed the business idea with your family, set up your business entity, and satisfied all governmental and insurance requirements.
Operating the business
Soliciting customers -- Place classified advertisements in a local newspaper, and/or a national newspaper or magazine. Use a simple, honest description of your services. (Once you become established as a provider of this service, you should benefit from word of mouth advertising from satisfied customers in your local area.)
For additional ideas on soliciting customers, see the Sales Methods page in another section.
Qualifying customers -- Hopefully, some of the people who read your advertisements will inquire about your services. During this initial telephone conversation, you should determine:
See the preceding Profitability of idea subtopic for my thoughts about setting your fee.
Getting customers -- After a satisfactory trial period, a prospective customer might agree to pay for your service on a long-term basis. You could try to get as many customers as you can handle.
Determining needs of customers -- To insure satisfied customers, you need to determine what they want from you. You need to replace assumptions with specific instructions.
You and the customer should agree on the service to be provided, and the frequency and amount of payment. Depending on the service to be provided, you might need some background information from the customer.
Thus for an answering service, the customer might provide you with the exact phrase to use when answering the telephone. The customer also should specify the hours of operation for the answering service.
You also need to determine when and where to perform the services and receive your fee.
Preliminary service activities -- Keep a calendar showing the date and time the service is required. (Remember to make any needed time zone conversions.)
Main service activities -- You would perform whatever telephone services are required at the required date and time.
Final service activities -- Collect your agreed upon fee from the customer. (Your agreement with the customer should specify the frequency and amount of these payments.)