What Is The Minimum Cost Of Running A Small Business?

[Rachael]

One of the hardest part in setting up a business is always 'funding.' There are different levels of businesses and the most popular is the small scale and the large scale. In my Country, considering the statistics, we have more of small scale businesses and less of large scale venture and this is because of the funding challenges. Setting up a small scale business is also more cost-effective and this also means that the profits would be lesser when compared to large scale businesses. Small scale businesses would require a limited number of employees while the large scale business would require more hands on deck to carry out duties effectively. Considering the rate of economic inflation, the cost of starting a small business is on the higher side because the prices of goods are increased more on a daily basis but with $200, a small scale business can be set up. What is the minimum cost of operating a small scale business in your Country?

 

[Alexandoy]

My planned home business is preparing food to sell to the neighbors and later on we can expand the client base to the whole village. The required capital is only $100 considering that we already have the stove and the utensils to use. We just have to spend for the ingredients and other miscellaneous expense. There is no delivery expense because the neighbors are near and we can walk to deliver their order.

For a business that is not home based I guess you have to consider the rental expense that you have to pay. You can only escape the rental expense if you are ambulant like using a cart to carry your products. When you rent you have to add the 3 months of rental to your capitalization otherwise you might be short in your cash flow later on.

 

[moonchild]

Well, this really depends on the type of business you're running whether online or offline, if it's online then there isn't any running cost apart from domain, hosting and internet connectivity fee.

But with an offline business you have to do a lot more to be able to start up something, no matter how small your business is you have to pay for rental of space, the only difference is if it's a home based business or it's a business that requires constant movements like hawkers for example.

After that you have to pay for inventory that is the items you plan on starting with, if you want to start a restaurant like the guy above you have to buy kitchen utensils etc and if you want to start mobile accessories business the you have to buy those things too.

Even an online business can require much because if you have an e-commerce store you'll be spending money on inventory too, but overall starting an online business is cost effective and cannot be compared with offline business.

And when it comes to making profits too online business stand more chance of being favored by the law of scale compared to their counterparts.

 

[Kendy]

Frankly, I do not think there is a minimum cost of running a small business and this is owing to the fact that, the economy is inflating everyday and this makes the prices of goods and services to be on the higher side. There is a difference between a small scale business and a large scale one but it would depend on various factors as well such as; the number of human labour to be employed, the size of the business, the taxes to be paid. Small scale businesses generally do not require a massive budget but it would be run on a low-key budget where; the number of employees would be few so that the cost of operation would be minimized. Small scale businesses will not incur high rate of taxes and the business can even be operated by the owner as a sole-proprietor. Depending on the state of the economy, this will help determine the budget that will be enough to set up the small scale business and it also depends on the business venture. For instance, operating a food store business on a small scale and doing same for a barbecue small business, they both share the same similarities in that they both will be operated on a small scale but the budget for both might differ even when they are operating on the same scale.

 

[Abee111]

Well, this depend on the type of business you want to run.
There are some business that you can run or start with no cost, that is it requires no money but you can start it and using human capital and make profit out of it, so also the profit u made, u can make it as capital to the business in buying some things to promote the business.
There are some business that u can start which requires money but not much, and one can develop that business to be a large business area but before reaching to that level, you have a long way to go. Because it require you to be patients over everything and allow the business to develop.
At least to my own view, the minimum amount to start a business that can stay long 100k. With this 100k, if u are careful, u can set a long standing business and make a huge profit out of it and also expand.

 

[Yhubee]

This will still depend on the type of small scale business a person is venturing into.
A person might need $200 to $400 for starting up and funding.
Take for instance, a food vendor business on a small scale, with the inflation bin the price of goods everyday,this will mean that the prices of the goods are not stable and so high values should be used for estimation. The business owner will then try to see how he or she can manage resources but not dropping the quality of the products sold. Since there's inflation in the price of goods the business owner has to purchase, there will in turn be an increased price for the goods sold or reduction in quantity of the goods to be sold.
Different businesses will require different amount of capital or funds for a startup and for promotion of the business. The type of business will determine the amount of labour required, that is the number of workers needed to speed up the work and enhance productivity. This will also determine the funds needed.
More funds can also be needed in case of a competition because strategies have to be put in place in other to outshine the counterparts and gain more customers.

 

[Shaf]

For the smallest of most business ideas, $100 as minimum starting capital should be enough to keep things going for a while.

But capital us something that's very subjective and peculiar to a business. You can start the same business, in the same niche, at the same time with someone but in different locations and that one differentiating factor can cause a vast difference in the amount of capital you will need.

Also, starting a business with small capital is not always ideal in some cases. Low capital may mean you make lower returns, or you may have to cut corners which can hinder growth.
The best thing to do would be to embark on a personal research, find out how competition are doing it and use that to see how much you can start with and still succeed.

 

[Augusta]

I don't think there can be a price tag for the amount of money you would need to start a business, I will just say start with whatever you have at the moment. Because if you are waiting to start with a specific amount, then you might just wait for too long and the interest might just go away. it is one thing to have dream but the most is the action taken.

so even if you have $20 and you can start the business with that just go ahead, kickstart then other things will follow. I don't even think capital is even the problem here most time but the research. you can plunge in$400 into a business with no right directive and you would lose all. so make your resarch first and be sure of the business before going on.

 

[Yusra3]

The minimum cost of running a small business can vary greatly depending on the type of business, but typically includes expenses like:

Business registration/license fees
Rent for office/retail space
Utilities (electric, gas, internet, etc.)
Insurance costs
Equipment/inventory purchases
Marketing and advertising
Payroll for any employees
Professional services (accounting, legal, etc.)

Even very lean small businesses operating from home may face monthly costs in the hundreds to low thousands initially. Careful budgeting and cash flow management is critical when self-funding at first.