How much do immigrants need to have to start a business abroad?
In the United States alone, about 55% of businesses are either started by immigrants or have immigrant co-founders. But how much do their businesses cost to launch?
For many people, starting a business is a rather stable way of making a livelihood in a new country. On the flip side, it’s also one of the costliest to start. It’s safe to say, being an immigrant entrepreneur can be a double-edged sword.
That said, the first step that you should pay attention to when starting a business abroad is the possible costs that you need to incur. The issue, however, is it is on a case-to-case basis. This means that you will only be able to get an estimate rather than a specific amount because all the possible costs will vary depending on what you need for your business.
To better understand how much you need to prepare as an immigrant, the following sections will walk you through the things that you need to look into when cost planning.
1) Stocks and supplies
For goods-based businesses, it’s a given that you can’t have a brand without a product. No matter what it is, you need to spend on your inventory and your office supplies. For an inventory, the cost will depend on what kind of product you will be selling. This can range from $1,000 to as big as $100,000.
For reference, start-up businesses with standard products usually only need around $1,000. Office supplies won’t take more than $100 since these consist of miscellaneous expenses like pens, paper, and likes.
2) Monthly rent
The average monthly rent in the US comes up to around $1,000. It will still depend on the lot, location, and foot traffic. You should add this to your expenses if you plan on building a physical store for your brand.
3) Physical store construction
Another thing that you will need to pay is the construction fees. If you’re buying or leasing an unfurnished lot, then you will need to allot funds for renovations, furniture pieces, and other things that you may need. If you don’t think you have the budget for this yet, then you can always start being an online-based business.
4) Marketing costs
Marketing doesn’t necessarily have to revolve around paid strategies, but if you’re aiming for visible results in market reach and sales, then paying at least $20 to $50 a month for marketing will already do a lot. Of course, this will still depend on the type of marketing strategies you are implementing.
5) Employees’ pay
Labor-based businesses require workers or employees. This means that their pay, either a salary or a wage, will be included in your monthly expenses. At the very least, you will need to pay one employee about $1,700 a month since this is the national minimum wage in the US.
If you’re in another country, then you may need to follow either a higher or lower monthly wage. At any point in time, you need to consider a skilled worker for the service.
6) Permits and other legal necessities
The initial permits, certificates, and legal documents that will be required from you before you are allowed to start a business will all need a minimal fee in order to be processed. Prepare at least $50, depending on the type and structure of your business.
7) Annual taxes
Annual taxes aren’t directly needed when starting a business, but it’s important to take note of them since it’s a key part of maintaining operations. Make sure to keep in touch with an immigration lawyer for immigration advice about this topic since there are usually different tax policies for immigrants.
It doesn’t matter if you have a physical or online store, you will still use your utilities for work-related needs. May it be the use of water for production, or electricity for laptop usage, expect that you will pay at least $100 monthly.
9) Online resources
Online resources refer to the necessary online tools that you need for your business. These may be grammar-checking tools, course-learning platforms, and likes. Some of these are one-time payments, while some run on subscriptions. Either way, make sure to add this in your calculations if you’re using them.
How much will you need to start a business?
To summarize, you will need around $10,000 as capital for your start-up business. You may need more or less depending on the type of business you plan on running, and how big you want it to be in the beginning. To maintain it, on the other hand, you should be able to generate at least $100,000 annually. This is most especially if you will be hiring employees during your first year.
Note that you should have finished applying for a visa for entrepreneurs before you take the first steps in building your business. There are still laws that you need to follow, no matter how small or big your plans are.