The first question on any entrepreneur’s mind when starting a new venture is how much is it going to cost. This article will lay out some of the most common expenses a new brokerage is likely to incur to help you to plan accordingly.
Building A Team – Employees
Running a business alone is hard. Most entrepreneurs understand that they simply can’t do everything by themselves. Even if they do manage to pull it off, there is a time limit to how long a company can survive like that. Eventually, you will need to take the plunge and hire staff to help you.
How many staff you hire depends on your ambition. Brokerages come in all manner of shapes and sizes and if your goal is to grow globally, then obviously your employees will become a considerable expense. Some of the positions you are likely to need to fill are accounting, sales, customer service and technical support.
Tech – Trading Platforms, CRM’s and Websites
Building a brokerage from scratch can be expensive. There are all kinds of expenses involved in producing turn-key trading platforms and client management systems. These systems will need to be commissioned and will require regular maintenance and updates. It’s impossible to give a definitive cost if this is the route you choose to take and for many, the price is so extravagant that it becomes a barrier to entry.
However, in recent years the landscape has shifted entirely. Companies such as Popcorn Technology offer white label services to its clients, which evidently is a much more economical solution for entrepreneurs looking to get started in the Forex industry. For those of you who don’t have a limitless pot of cash sitting around, this could be the most sensible option for you.
An MT4 white label trading platform is an attractive prospect to potential clients as it is known and trusted around the world and will take little selling to a new client. It’s tried and tested, and all a new brokerage needs to do is put their logo on it. With a white-label service, your brokerage can be up and running in a matter of weeks with significant capital savings.
Marketing – Acquiring Customers
It is obvious that without a sustained marketing campaign your brokerage will struggle to grow. You will need a steady stream of new clients, and this will also come at a considerable cost. There are so many avenues available for a new brokerage, far too many to list but you will need to be present on social media and utilise paid marketing campaigns to deliver your message to the masses. Your marketing budget will change seasonally and year to year and is entirely dependent on your objectives.
Professional Fees – Banking, Accounting and Incorporation
Your overheads can be sky high if you don’t control them properly. You will need to be realistic when starting out. You likely won’t be able to afford a big prominent office in the centre of town. Still, no matter where your brokerage decides to call home, there will be associated fees of doing business like electricity, phones, internet, banking fees and accounting costs. You will need to plan and keep tight control of these everyday expenses to ensure you have enough money to keep the lights on.