smallbusiness.co.uk: Helping your business think big

The best advice I can give you is to consider whether you really need to rent premises or not. Many consultants and freelance workers operate very successfully from their homes. These days I don’t think it would be considered as a disadvantage as it might have done ten or fifteen years ago, because there are so many people in the same boat as you. A major advantage of working from home is that you can extend the life of your lump sum - rent on premises can eat it up very quickly. And you may find that with the economy still unsettled, it takes longer for you to build business than you expect.

If you do decide to look for premises, take advantage of the current economy. You might be able to negotiate on rent, or ask for inducements such as a rent-free period if you sign a lease for a certain amount of time.

Starting a business with a lump sum can make it easier, because there is certain equipment which you will need to have, such as good communication equipment (phones, faxes, e-mail) and computer equipment. However, it is important for you to be very careful in spending that lump sum. Always ask yourself, if I didn’t have any money, how would I meet that particular need? In this way you focus on setting yourself up with the lowest cost.