Developing a Start-up Cost Worksheet is a crucial step to open a new business. A start-up cost worksheet will give you an idea about how much budget you need to open the doors to your business.
How to Calculate Start-Up Costs for a Business
Each business is different, and needs its own specific expenses and allocation of its budget. Here are some useful tips on how to calculate start-up expenses that fit your business.
- First, prioritize expenses according to your business needs.
- Decide each expense is essential or optional. You may want to wait on optional needs at the beginning. Be realistic and work on essential expenses first.
- Separate one-time costs and ongoing costs that repeat every month.
- Project a budget: To figure out how much budget you need for each expense item, do research on public records of competitors or industry leaders. You will get a good idea how they manage their expenses and how much profit they make. Remember that your business operation is as not efficient as theirs yet and you may need more budget than theirs.
What Are One-time Costs & Operating Costs?
- Building / Real Estate: security deposit for rent, first month rent, down payment, etc
- Start-up inventory: inventory, advance deposits to suppliers, etc
- Administrative expenses: licenses, permits, insurance, utility deposits, supplies, professional fees, etc
- Marketing & promotional expenses: advertising, business cards, brochure, flyers, website setup, etc
Operating Expenses (ongoing expenses, working capital): rent, utilities, vehicle & travel expenses, office supplies, banking feeds, credit card fees, loan payments, salaries to employees and the owner, etc.
* To open a business, it’s recommended to have a cash reserve for three months working capital.