After working on a cool business idea, the prime question arises, “How much is it gonna cost?” Answering this question can be very tricky. Some eCommerce businesses can be started on a small budget, while it’s not the same for all. It is very important to know how much money is required to open and operate an eCommerce business to keep it running smoothly. Forecasting eCommerce startup costs is one of the most important pre-startup tasks that can give an idea to the owner about its future.
For example, when facebook started, Zuckerberg spent $3000 on a monthly basis for its hosting, and after 4 years, this expense rose to $10 million. As a startup grows, it’s expenses also grow, that make the forecasting of eCommerce startup costs a necessary aspect for the business.
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1) Every eCommerce business requires a working space where team members can work and collaborate. Think about the money that you need to pay for the rent or the renovation of the space. Research and forecast your future costs.
2) You should consider the production costs in case of a product based eCommerce business.
3) Presence of technology makes the business more productive. Compute the expense of computer, telephones and copiers that you might need for your startup.
4) Figure out the salaries with the benefits that you’ll offer to your employees. That’s a major part of an eCommerce startup plan.
5) eCommerce businesses always have to ship the products to their customers, so your an e-commerce startup should essentially add packaging and shipping costs.
6) Insurance always enhanced the safety to products. Keep an account of insurance against property damage, business interruption, for better budgeting while making your eCommerce startup plan.
7) Don’t forget to add overtime pay and payroll related taxes to your budget.
8) Marketing and advertisements are necessary for the growth of an eCommerce business. Calculate the required expense for advertising your startup to the right set of people.
9) While calculating your eCommerce startup costs, make sure you count utilities and other expenses, the most overlooked charges.
10) Attorney’s advises are necessary to stay abreast of the legal issues of the business. Take care of the attorney’s and consultant’s costs.
11) Consider the expenses for getting permits and licenses related to your business.
12) At present, no business can run without an internet connection. Add the estimated cost of monthly internet charge and other software applications.
13) If you took some loan for fluid financial stream, then you should also include the eligible interest on your budget.
14) Separate recurring costs and one-time costs. This helps in establishing the budget after the launch of your startup.
15) Every business needs a website maintenance service for it. Interpret such costs and add them to your list.
16) Identify the expenditure in business cards and other stationery stuffs, like notepads and pens, etc.
17) Products based eCommerce businesses need raw material for the production of their goods. Including the amount of raw materials and their transportation charges can also be beneficial in forecasting your eCommerce startup costs.
18) If you opt to accept credit cards for your business, then do take account of their fees. They can be expensive.
19) Recruitment costs are a major concern for employers. One should not underestimate the recruitment cost, and should consider while calculating total costs.
Related: Challenges in Startup Hiring
20) Often, while starting a business, owners forget to take care of surety bonds until they realize it’s significance in a midway of the licensing process. Make sure to fill out surety bonds and add up their fees too.
Here is an image that will give you a demo idea of your eCommerce startup costs planner.
Starting a business is a challenge in itself. It’s not the launching of a startup that’s costly but it’s the operational expenses, that takes a toll on the owner. The beginning process of a startup can be both time consuming and overwhelming.
It requires great amount of hard work and research. While robust efforts are required for business success, one also needs capital strength to get started, making the determination of startup cost an essential endeavor. We hope the above discussed 20 tips for eCommerce startup costs will help you largely to estimate the overall cost of your business.
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