As“Start a Business” takes its place on vision boards this new year, it is imperative that Entrepreneur Weekly helps make that dream a reality. As simple as it sounds, a lot goes into starting a business. A sustainable venture is built on structure, proper planning, and thorough research.
One of the most common, and costly mistakes aspiring entrepreneurs make is underestimating or completely ignoring start-up costs. But what exactly does that mean? Investopedia defines start-up costs as “expenses incurred while establishing a new business.” These costs go far beyond buying products or posting on social media; they represent the foundation on which the business will stand.
The difference between failure and sustainability often comes down to early planning. Entrepreneurs who recognise gaps early, seek guidance, and adjust their strategy have a much higher chance of success.
According to Micro & Small Enterprises (MSE) Financing Specialist at the Jamaica Business Development Corporation (JBDC), Jacqueline Lloyd-Carter, many entrepreneurs jump in without fully understanding what they are getting into.
“A lot of times a person will just have an idea and think that they can just start right off the bat without giving it much thought,” Lloyd-Carter explained. Failing to calculate start-up costs has real consequences. “At six months down the road, we’re at a standstill and then they are revisiting the fact that they needed to have planned,” she added.
Start-up costs are a collection of smaller, itemised expenses. “Basic registration cost. Are you registering it as a sole trader or are you registering it as a company? If there are legal fees, you have to take those into consideration,” the Financing Specialist says.
Other expenses include: Licences and Permits, depending on the product or service, Bank Account set-up and financial documentation, Assets and Equipment such as computers, tools, or machinery, Inventory – whether it’s T-shirts, hair products, food items, or raw materials, Operating Expenses including rent, utilities, internet, and transportation. “I will encourage persons to just itemise the thing,” she continued.
The JBDC emphasises the critical need for thorough understanding and management of start-up costs. Underestimating these costs can lead to severe cash flow problems and ultimately, business failure.
Financial planning should begin at the ideation stage of a business. It is essential to Identify Start-Up Cost; detail all necessary expenditures to understand the total funds needed.
Once total start-up costs are calculated, entrepreneurs must decide how the venture will be funded.
“At the end of the day, am I going to need a million dollars? And then, where am I going to get that from?” Lloyd-Carter emphasised.
Additionally, Secure the Right Funding: Choose between self-funding, acquiring investors, or obtaining loans by understanding your financial needs and business goals.
Many businesses come to a standstill six months in, not because the idea was bad, but because the money ran out. Plan for at least six months of operational costs to ensure sustainability until the business starts generating revenue.
STARTING LEAN AND TESTING THE MARKET
Understand industry-specific expenses and potential revenue streams to make informed budgeting decisions. Not everyone has a million dollars to start a business, and that’s okay. The Financing Specialist emphasises the importance of lean start-ups.
Instead of full-scale production, test the market. Some entrepreneurs begin by creating samples, sharing them with friends, family, and potential customers to gauge interest. This approach allows business owners to assess demand, refine pricing, and adjust products before investing heavily. However, even testing requires funding. Inputs, packaging, and distribution all come at a cost.
LET JBDC GET YOU STARTED!
When a client comes into the JBDC, the Business Advisory Services Unit (BAS) acts as a resource centre for entrepreneurs by answering queries, providing information such as details about the business environment and other institutions within the ecosystem that business owners need to know about. The team will assist with information that allows clients to build and grow their businesses.
JBDC also offers structured support through its ‘Fundamentals of Business’ Training. This programme caters to clients that are at the beginning stages of owning and operating a business and provides necessary foundational insights regarding formalising your business.
If starting a business is on your list of things to do in 2026, call the JBDC at 876-928-5161 or visit www.jbdc.net to get connected to a business development expert.
