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Start-Up Businesses
Start-up costs, pricing, break-even and the figures worth charting in the first year of a new service business.
Charting the First Year of a New Business
The first year of a new business is when the numbers matter most and are easiest to ignore. Most small businesses in the UK are sole traders and micro businesses offering a service, from cleaners and dog groomers to mobile mechanics and aesthetics practitioners. Tracking a few simple figures from the start shows whether the business is heading in the right direction, long before the first tax return.
Numbers to work out before you launch
Start-up costs
Training, equipment, insurance, a van or treatment room and initial marketing. Service businesses are cheaper to start than most, but the range is wide: a cleaning business can start for a few hundred pounds, while a fully equipped grooming room or mobile mechanic van costs several thousand.
Prices
Compare what local competitors charge, then work out what you need to charge to cover travel, products, insurance, admin time and holidays. Many new owners underprice because they only count the hours spent on the job.
Break-even point
The number of jobs or treatments you need each month to cover your fixed costs. Charted against your expected income, it shows how quickly a new business can become sustainable and how much difference a small price change makes.
Metrics worth charting in year one
- Monthly income: plotted against your break-even line
- Enquiries and conversion: how many enquiries arrive each month and how many become bookings
- Repeat customers: the share of clients who book again, which matters most in service businesses
- Average job value: to check that prices keep up with rising costs
- Real hourly rate: income divided by every hour worked, including admin and travel
Reviewing these figures each month makes it much easier to spot problems early, whether that is a price that is too low, a marketing channel that is not working or a slow month that needs planning for.
Support for new business owners
Many people starting out are experts in their trade but new to budgeting, pricing and marketing. Regular business start-up mentoring from Start Up My Business, which offers a free start-up consultation and one-to-one support for service-based micro businesses, can help new owners set targets and review their numbers as the business grows.