Over and over, I get asked how much it costs to start a business.  Basically, of course, the answer depends on what type of a business.  Do you just want to sell a few pieces of jewelry a year to friends?  Do you want to market a new wholesale line or do you want to open a bead store?

There will be some expenses common to all businesses: legal fees, marketing fees and supply fees. 

But to talk of fees at this point is putting the cart before the horse. The first thing you have to decide is what you want to do with your business and how large you want it to be.  Do some creative visualization.   Do you see your designs in Macy's ?  Do you see yourself with a chain of retail stores?  Do you see yourself firing your boss and making jewelry full time?  Or do you just see yourself selling enough of your hand made beads to cover the costs of your habit? Write your dream down in the present tense.  'Britney Spears is wearing my jewelry'.  See it and think it constantly.  That image will soon be your reality.

Then throw in some of today's reality.  How much time and money do you have to invest in the business?   How comfortable are you marketing? How good are you at bookkeeping and record keeping?  I  suggest you start off by reading at least one book on starting a business.  There are several available on amazon.com  and at your local library.  There are even books specifically written for marketing and selling crafts.  Find a book that's appropriate for your dream and see what it takes to start a business and  keep it running. 

Don't be discouraged after reading the books.  Maybe, like me, you hate bookkeeping and are therefore terrible at it.  My first year I literally handed my CPA a shoe box full of receipts, invoices and bank statements.  When I got his bill for sorting through all my junk, I quickly buckled down and kept my own books.  Maybe you hate marketing - do shows where the marketing is done for you.  Maybe you don't have weekends free to do shows - do house parties instead.  Find a way to fit your dream into your current lifestyle.

Now, onto that big hurdle - money.  Yes, you are going to need some.  You will have start up costs.  Your first costs will probably be county and/or township license fees.   There may be zoning fees.   Depending on what state you live in, you will need a sales tax number (these are free).  If you plan on incorporating you will have legal fees.  Once you're all legal, you will need money for both marketing and inventory.  But these fees don't have to be astronomical.  My dream was to have a complete on-line bead store.  I had 500.00 to invest.  It's not a lot.  I bought an awful lot of fish beads because I was able to get them at a really good price.  I then sold them in small lots on ebay.  It was an awful lot of work, but it's also way in my past.  I re-invested most of my money back into the business and now have over 6 figures worth of inventory. 

In retrospect, there are many advantages to starting small.  It gives you a chance to get your procedures in place and more easily manage the expansion.  Now that my website is firmly off the ground, I want to start a small chain of bead stores.  I already have the beads in inventory.  Again, I don't want to invest a lot of time and money into my new venture.   I rented a 12x24 stall at an indoor flea market for 350.00 a month and place 90.00 worth of advertising in the local Penny Saver every month.  No long term lease at the market so I can move in 30 days time when I want a large place open 5 days a week.  As I don't want to work weekends, I have found someone to staff my booth for me.  If my business were just starting out, I'd be staffing the booth myself or renting a table at 10.00 a day.  But at this stage in my business cycle, the flea market is a very small investment. 

The big question I always get is how much money to invest in start up inventory.  I wish there was a magic formula.  Inventory control is tricky at best.  It is a fine art.  There are many books written on it and many classes given on it.  While I am far from an expert on the matter, I will write next month's article on inventory management with an emphasis on start up inventory.

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