How much did it cost me to set up a business before I made any money?

Transparently sharing my journey in creating my consultancy venture - week 0 expenses. Build-in-Public approach

I recently set up my startup venture for product consultancy and wanted to share my journey. Similar to BareMetrics’ Open Startups or #BuildInPublic, I wanted to be transparent about my startup journey. However, I may not share every week of my startup journey, but rather cherry-pick some representative weeks, based on my takeaway of oversharing from an open startup founder’s interview.

Thumbnail thanks to Intellectual property vector created by vectorjuice.

TL;DR

Excluding the cost of purchasing a laptop, it cost me €382 and I spent 10 days. I haven’t made any money from it yet.

If I include my laptop purchase, the cost comes to €2,808.

What did I set up?

I set up a Sole Trader (a.k.a sole proprietorship) in Ireland. My intention was to use it to run a product or business consultancy, career coach PM aspirants, and explore different product-centric startup ideas.

You can find it at Spark Creative Technologies.

Registering a business… by outsourcing it

As a first step, I had to register a business, but since I need to do it only once or twice over the next decade, I was not interested in learning the steps to register it. I outsourced it. I found a business, fusion formations, which offered to set up my sole trader business for a fee on my behalf. This cost me €157 and took me a few hours to review options and find KYC documents.

Cost = €157

Time = 1 day

Deciding on name and tax (VAT)

Registering my company required a few things I did not have:

1. A name for the company

2. A description of the company

3. Revenue estimates for tax registration

I used the CORE search engine to look up every company every registered in Ireland to look up keywords I want to use. I also wrote a broad description that keeps me open to building anything I decide later on.

I gave a wild guess estimate (SWAG) of €30,000 as my 2022 revenue which meant it didn’t make sense to register for VAT tax separately. It also meant I had overpaid the registration outsourcing business, as I could’ve paid for a cheaper package to just register my sole trader without tax registration.

Cost = €0

Time = 2 days

Bank Account

I looked up banks that offer business accounts with a few criteria that I’d prefer:

1. doing everything online once I have the account

2. minimal account fees

3. a bank I am not using for personal accounts as most of the bank mobile apps don’t have the capability to run more than 1 account.

I choose Bank of Ireland because

1. They had a reasonable app and in fact, their application process was also completely online

2. They waived many fees for the first 2 years of a startup

3. I wasn’t a customer of theirs

I also considered Fire.com because I wanted an API-centric bank account (Appealing to my API PM experiences), but I closed my account soon after opening it because the KYC process was painful and since they did not have any program of waiving fees.

Cost = €0

Time = 2 days

Laptop

I had bought my previous personal laptop in 2016 so I bought a new one. I bought the Lenovo X1 Yoga Gen7. It took me a few days to confirm this is the right one for me and where to find it cheapest. I also tried to find ways to patch up my existing laptop but couldn’t.

Cost = €2,426

Time = 3 days

Website

I had used Wix to build my personal website, so I went back to Wix drag-drop editor to create my business website. I needed it to be simple as I would iterate over it as I learn more about my customers and my business interests. I created mock-ups on paper and created the website in one day. I then purchased Wix premium so that I can publish the website without ads and with a URL. For my first year, the premium plan cost me €125 but it’ll increase to €250 next year onwards.

Cost = €125

Time = 1 day

Domain purchase

I bought my domain for the website through Wix. My tertiary research told me that the domain name matters less than the heading of the domain, so I choose my full company name as the URL, which makes it cheaper but hard to type. I wanted a domain so that I can create business pages on LinkedIn and other social media platforms which allows me to advertise later, if I choose to. I got the domain for free as part of the premium website for the first year but it’ll become €18 next year onwards.

Cost = €0

Time = 1 hr

Email purchase

I purchased a business email from Google so that I can provide a professional email address as my contact. I intended to use this when I set up my LinkedIn page because they want you to have an email ID on your company’s domain. I also planned to use professional email for lead gen, etc.

I bought 2 email addresses in my domain but I didn’t realize that the 50% off deal I got would only be one time. Immediately after buying 2, I had buyer remorse and tried to buy more, but the cost had doubled.

From next year onwards, I would pay €153 for 2 emails although I had to pay only €76 for year 1.

Cost = €76

Time = 1 hr

Linkedin page

Once I had my website and email setup, I created a skeleton LinkedIn page. Apart from making it easy to tag my own employment on the page, I don’t see any benefit for creating it though. In retrospect, I should not have created a LinkedIn page. I should have waited till I am considering running LinkedIn ads.

I noticed that there was an option to create a lead gen form on LinkedIn, but that required me to point users to my company’s privacy policy, which I didn’t have yet. I am still stuck on creating a privacy policy, so I disabled the lead gen feature on LinkedIn.

Cost = €0

Time = 1 hr

Logo

After making the LinkedIn page and website, I realized I did not have any logo to use to represent my company. I went to Fiverr, because I had a perception that I’ll get a logo for $5 (or €5). I came across a logo maker so I assumed self-service will be even cheaper and went that route.

I didn’t search for cheap logo designers and ended up with spending €24 for a logo. On the bright side, I saved a lot of time as I could do it self-service. In retrospect, I could have searched for a cheaper service.

Cost = €24

Time = 2 hrs

Total time taken and costs incurred

Adding all these up, I consumed

Cost = €2,808

Time = 10 days 

Visualizing this…

This post will be outdated by the time I post it because I have a pipeline of posts being posted gradually over weeks, but I hope to be back with more information soon.