New research by online asset disposal specialists reveals the biggest fears, concerns and costs when setting up a new business in Yorkshire.
With consumer price inflation rising sharply in recent months and the 12-month growth rate reaching 7.9%¹, BPI Auctions surveyed UK business owners to determine the biggest concerns before setting up a business and the highest costs when starting out².
Surprisingly, over two-thirds (69%) of business owners claimed they were almost put off from starting their business because they feared they would not attract customers, and six in ten (60%) said that the fear of not earning enough to recover the initial investment was a major barrier.
The top ten biggest fears and concerns are:
- Not attracting customers (69%)
- Finances (64%)
- Not earning enough to recover an investment (60%)
- “What if everything goes wrong?” (58%)
- Failing the family (32%)
- Not knowing where to start (28%)
- Not being believed in (18%)
- Being considered “crazy” (18%)
- Not being an expert (15%)
- Being incapable of handling success (13%)
Opening a new business can be a terrifying prospect because there’s always a lot of uncertainty. Almost two-thirds (60%) of business owners said they were concerned about managing finances, and just under (58%) of business owners admitted to thinking about failure before even starting.
According to recent research, the average cost for starting a business in the UK is £22,756³ (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 three in five (58%) of business owners advised that finances were the most expensive costs, followed by equipment and supplies, stock and sales and marketing services.
The top ten biggest costs when setting up a business are:
- Finance (58%)
- Equipment and supplies (42%)
- Stock (40%)
- Sales and marketing (33%)
- Insurance costs (32%)
- Professional fees (e.g. hiring a solicitor or lawyer) (27%)
- Premises (22%)
- Staffing and employment (16%)
- Technology costs (12%)
- Large-scale machinery (3%)
Manufacturing Second-hand Equipment Case Study – Hawthorn International
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.”
Henry Spencer, Sales Director at BPI Auctions, summarises, “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.”
If you’re looking to set up a new business and need to acquire second-hand equipment or dispose of surplus assets and machinery, find out more on BPI Auction’s website.
