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BPI Auctions study reveals the biggest concerns when setting  up a new business

From rents and rates to fuel prices and minimum living wages and wage bill increases, the cost-of-living crisis is impacting businesses both new and well-established, across multiple industries.

With consumer price inflation rising sharply in recent months and the 12-month growth rate reaching 7.9%¹ in May 2022, we surveyed UK business owners to determine the biggest concerns before setting up a business and the highest costs when starting out².

According to the survey, nearly half (49%) of business owners say they were almost put off from starting their business because they feared they would not attract customers, and over three in ten (36%) business owners admitted to thinking about failure before even starting.

BPI Infographic

Opening a new business can be a terrifying prospect because there's always a lot of uncertainty. Almost two out of five (39%) business owners said they were concerned about managing finances, and nearly a third (32%) of business owners were worried about not earning enough to recover from initial business investment.

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, more than a quarter (27%) of business owners advised that equipment and supplies were the most expensive asset, followed by stock and sales and marketing services.

BPI Infographic 2

Our sales director, Henry Spencer, 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 these 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.

“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.”

Manufacturing Second-hand Equipment Case Study - Hawthorn International

Founded eight years ago by Rob Williams and business partner, having been a clothing start-up brand before that, 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 as 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 close to our location who were 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.

Buying second-hand equipment and machinery

Whether you own a manufacturing business or are starting up a construction company, machinery and equipment are one of your most important assets. However, starting a new business or expanding can be expensive, so it is economical to consider purchasing second-hand machinery rather than first-hand.

Sometimes, you can even get your hands on barely used machinery!

A lower cost isn't the only benefit; here are five more ways second-hand machinery can benefit your business:

  1. Sustainability
    Choosing second-hand machinery is 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.

  2. Avoid initial depreciation
    Like a car, the value of machinery depreciates when you take it from the dealership and during the first year, it will decline at a double-digit rate! On the other hand, when you purchase second-hand machinery, you can avoid this initial depreciation and resell it in the future at a better price.

  3. Immediate availability
    When you buy new machinery, it needs to be ordered, manufactured, and delivered, and once you place the order, there isn’t much you can do to get out of it. This means you will have to wait longer to start work, and any time-sensitive projects will suffer.
    However, you can pick up your machinery immediately when purchasing previously owned equipment from an asset disposal specialist like BPI Auctions.

Selling second-hand equipment and machinery

Supporting both businesses and individuals, we exist to help our customers achieve corporate objectives ranging from environmental targets, space utilisation and cash flow generation.

Our bespoke disposal solutions enable us to offer support for businesses of all sizes and individuals. Clients benefit from our unrivalled turnaround times, free marketing strategy & specialist account managers within your market sector. Become a vendor today!

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https://yorkshiretimes.co.uk/article/The-Biggest-Concerns-When-Setting-Up-A-New-Business

https://www.startupdonut.co.uk/news/spiralling-costs-dampen-uks-entrepreneurial-spirit

https://www.lawdonut.co.uk/business/news/spiralling-costs-dampen-uks-entrepreneurial-spirit

https://www.marketingdonut.co.uk/news/spiralling-costs-dampen-uks-entrepreneurial-spirit

https://www.techdonut.co.uk/news/spiralling-costs-dampen-uks-entrepreneurial-spirit

https://www.businessupnorth.co.uk/the-biggest-concerns-when-setting-up-a-new-business-in-yorkshire/

https://lancashiretimes.co.uk/article/The-Biggest-Concerns-When-Setting-Up-A-New-Business

https://northeastpost.co.uk/article/The-Biggest-Concerns-When-Setting-Up-A-New-Business

https://www.businessfirstonline.co.uk/advice/setting-up-a-new-business/