Traditionally, one of the most common questions a potential business owner had when contemplating the founding of their business was “How do I estimate the startup costs for my business?” But how has this process changed for a modern-day micropreneur? Well, actually, a lot.
Let’s say I wanted to open a dress store in 1989. I would have estimated my startup costs based on things like insurance, rent, product inventory, marketing expenses, print advertising, wages, printing, utilities, shipping, office supplies, business cards and other items. At the end of this estimation process, if I needed financial assistance from a bank or an investor their involvement may have meant that my little boutique may have never made it off the ground.
Fast forward to today. For a modern-day micropreneur and virtual company owner many of the considerations have either been displaced or the costs greatly lowered by technology. For example, my new online dress boutique requires an investment in design of the platform, online PR strategies, social media outreach and such. But I no longer have to consider things like:
- · exorbitant costs for printing that has been largely replaced by low cost email
- · rent that is replaced by drastically lower site hosting fees
- · utilities for anything other than my living space, and
- · office supplies for yourself – not a staff of five.
Today, a virtual business owner starts their company while still employed. Her paycheck funds much of her startup costs. A 2 – 5 year transition plan is very common for many micropreneurs who never have to rely on their business to be the sole source of income to pay living expenses for any matter of time. After a few years, many business owners replace their existing salary and some surpass it.
And if they start more than one company the financial barriers to entry for micropreneurs shrink even further. Once a true micropreneur understands the power of process automation – starting another company is as easy as registering a new domain name and employing the same skills and freelancers to get things done. Costs are saved by reusing equipment, software, freelancers etc.
I am not suggesting that virtual company ownership is a $5 venture by any means. The costs are real, and need to be calculated. But the modern day micropreneur costs are happily much lower.
When you want to estimate your micropreneur venture costs create a list or a spreadsheet and itemize the equipment, other items that you will need to open for business and list the cost of these items as well as any startup capital that you will require for each line item. A few such items would include computers, tablets, phones, virtual assistants, strategic consulting, software, hosting, design and development, telecommunications, business cards and others.
Price these items and be realistic about it. The more detailed and complete your list and prices, the more accurate your estimate will be. Once you believe you have everything listed, then it is just a matter of totaling the prices and costs of everything you need to acquire and pay for to launch your new virtual business.