The Biggest Concerns When Setting Up A New Business
New research by online asset disposal specialists reveals the biggest fears, concerns and costs when setting up a new business.
With consumer price inflation rising sharply in recent months and the 12-month growth rate reaching 7.9%, BPI Auctions surveyed UK business owners to determine the biggest concerns before setting up a business and the highest costs when starting out.
Surprisingly, one in ten (43%) of business owners claimed they were almost put off from starting their business because they feared they would not attract customers, and nearly half (47%) said that the fear of everything going wrong was a major barrier.
The top ten biggest fears and concerns are:
“What if everything goes wrong?” (47%)
Not attracting customers (43%)
Not earning enough to recover an investment (26%)
Not knowing where to start (26%)
Not being an expert (23%)
Failing the family (18%)
Not being believed in (12%)
Being considered “crazy” (4%)
Being incapable of handling success (1%)
The top ten biggest costs when setting up a business are:
Insurance costs (23%)
Professional fees (e.g. hiring a solicitor or lawyer) (22%)
Sales and marketing (20%)
Equipment and supplies (19%)
Staffing and employment (12%)
Technology costs (9%)
Large-scale machinery (8%)
Opening a new business can be a terrifying prospect because there's always a lot of uncertainty. Over one in four (41%) of business owners said they were concerned about managing finances, and over a quarter (26%) of business owners admitted to not knowing where to start.
According to recent research, the average cost for starting a business in the UK is £22,756 (in the first year), which doesn’t even include manufacturing products or purchasing stock.
However, when asked what the highest initial costs were when setting up their business, almost a third (31%) of business owners advised that premise costs were the most expensive costs, followed by insurance costs, professional fees and stock costs.
Manufacturing Second-hand Equipment Case Study - Hawthorn International
Henry Spencer, Sales Director at BPI Auctions, summarised:
Founded eight years ago by Rob Williams and his business partner, having been a clothing start-up brand before, Hawthorn International has used second-hand equipment to grow rapidly. The company now manufactures and delivers fully customisable clothing to start-ups, SMEs and established fashion brands.
Rob outlines how second-hand equipment has been crucial to the growth and expansion of his business: “As clothing manufacturers, we require a lot of machinery for our factory; everything from equipment required for the actual production of clothing like knitting and dyeing machines, to ancillaries like tailoring shears and tape measures.
“When starting out, we originally looked at renting the larger factory equipment we needed, such as the garment dyeing and washing machines, since they have a high upfront cost. However, we found that purchasing pre-owned was actually a great way to save on our set-up costs when we were able to purchase high-quality clothing manufacturing equipment at a fraction of the cost it would have been if it were new from a clothing factory that was downsizing. As a company that tries to be as sustainable as possible, purchasing pre-owned also ties into this ethos as we avoid items which are otherwise in great usable condition going to landfills.
We have also recently set up an in-house clothing design team, and as a part of that, we needed to procure computers which could handle the fashion design software we use. Purchasing refurbished computers has saved us a great deal over the RRPs, but we still have a warranty if needed. Our experience has been very positive, and we would recommend buying pre-owned items to anyone starting out in manufacturing.”
“It was interesting to see that equipment, supplies and stock were the highest expenses for many business owners over the cost of premises, professional fees and insurance costs.
“Using second-hand items can come at a fraction of the cost of purchasing items from brand new. Due to challenging and uncertain times over the last two years, both new and existing companies have been forced to reassess budgets and cut down costs. This is why a move towards the use of second-hand products is inevitable.
“Purchasing previously owned machinery and equipment is also a more sustainable way of working. Designing and manufacturing heavy machinery requires a lot of energy and resources, adversely impacting the environment. So, when you invest in previously owned machinery, you immediately cut down production requirements and reduce your carbon footprint.
"However, choosing where to buy your second-hand items is an especially important consideration. You can avoid faulty or inferior items if you use trusted and reputable asset disposal specialists— especially those with credentials and knowledge specific to your industry.”
For more information on the survey click here