If you are in the preparation stage of starting a business, it is essential that you determine your financial needs. Each business has its specific cash needs during different stages of development, there is no science to estimating your startup costs. Some businesses can be started with the bare minimal amount of cash, while others will require a substantial investment.
Some additional considerations:
In determining how much money is needed for startup you should estimate the costs of doing business for the first 3-6 months. Some of these expenses will not be recurring fees such as fees for incorporating your business, business license. or maybe even the price of a sign for the outside of your building. Some will be recurring cost, such as utilities, inventory, and insurance. Realistically, when you are creating your startup budget consider those things that are truly necessary.
One last thought when thinking about cost – is it a fixed expense or a variable expense? Fixed expenses are those expenses that will occur monthly. As stated above this includes your rent/mortgage payment, administrative cost, payroll and insurance. Variable expenses are those that may not be the same amount each month or may not be payable each month such as your inventory, equipment, office supplies, etc.
Knowing your business start-up cost is a very important step in starting your business and should be taken seriously. TWF Business Solutions offers business consulting to aid your business in the start-up process. We’re here to help – contact us at 478-257-7309 or visit our website at www.twfsolutions.org. We look forward to hearing from you soon…