Q: I am 55 years old. What are the financial considerations on starting a business? I’m a woodworker and have identified a machine, costing £7,000, which I would need to buy.
Aug 17 2005
Answered by: Philip Wilkinson Ask a question
You don’t need to be frightened because of your age, as research has shown that grey hair combines with a good survival rate for businesses. However, you should be just a touch cautious because you don’t want to get into financial difficulties when you are relatively close to retirement.
You will need funds to buy your machine, purchase any other equipment you need, provide yourself with an income until the revenues from your business have built up, pay for some sort of premises and generate some selling or marketing activity. This list may seem daunting.
The machine could be leased rather than bought outright and this would spread the cost over a number of years. This could also apply to any other equipment, although a telephone, answerphone and computer are probably too small in expenditure to justify leasing. Premises need to be appropriate. For example, you are not likely to be able to operate your machine at home (check with the local planning and health and safety about any garage or outhouse you might have).
Look around for any managed workshops which would allow you to share premises and facilities with other small businesses, spreading the cost. Sharing premises can also be a help in networking – this could generate work for you from others.
Marketing your products or service can burn a hole in your pocket, so look for low-cost ways of attracting local business.
Finally, you need some income to live on yourself. It’s difficult to be precise about how long it will take until your business will give you can income, but you can be absolutely assured that it is normally longer than you expect.
An adviser at your local Business Link (0845-6009006) will be able to help you produce a business plan – and could possibly send you on a free training course. Your business plan should produce an estimate of how much money you need to start up and for how long. Be prudent.
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