Asses the cost associated with staring, managing and growing your business.
If you are planning to start a business, it is critical to
determine your budgetary needs.
Since every business is different, and has its own specific cash
needs at different stages of development, there is no universal method for
estimating your startup costs. Some businesses can be started on a smaller
budget, while others may require considerable investment in inventory or
equipment. Additional considerations may include the cost to acquire or
renovate a building or the purchase of long-term equipment.
·
To determine how much seed
money you need to start, you must estimate the costs of
doing business for the first months.
Some of these expenses will be one-time costs such
as the fee for incorporating your business or the price of a sign for your
building.
Some will be ongoing
costs, such as the cost of utilities, inventory, insurance,
etc.
·
While identifying these costs, decide whether they are essential or optional. A realistic
startup budget should only include those things that are necessary to start a
business.
·
These essential expenses can be divided into two separate
categories: fixed and variable.
Fixed expenses include rent, utilities, administrative
costs and insurance costs.
Variable expenses
include inventory, shipping and packaging costs, sales commissions, and other
costs associated with the direct sale of a product or service.
The most effective way to calculate your startup costs is to use a
worksheet that lists both one-time and ongoing costs.
https://www.sba.gov/starting-business/business-financials/estimating-startup-costs
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