If you want to launch a business, then you will have to make sure that you have a solid plan. You’ll also need to make sure that you account for any unexpected issues. If you want to do that, then this guide should talk you through what you need to know when trying to calculate your start-up costs.
To begin with, you need to try and identify your expenses. Write down all of the costs that you might have incurred already but do not stop there. You then need to write down the expenses that you are far more likely to come across as you approach your company’s launch date. Think about things such as your registration fee, your licensing, any equipment you need and even supplies. Payroll should be another factor, as well as inventory if you happen to sell products. Storing those products is also important, so consider rental space and shelving. Check out Bilt Industries to find out more.
If you have a rough idea of the costs that you will be paying out, then this is great, but you need to accommodate for more than this. Ideally, you need to add around 20% on top of this so that you can anticipate any future costs. If you can do this, then you will soon find that you are able to get the best result out of your start-up plan.
Do the Math
When you have a rough estimate of your costs, you then need to divide the list. You’ll need to create a column for your ongoing expenses and then one for your one-time expenses. Ensure that you can create a monthly average and then multiply them by the amount of months that you have to go until you launch. This will give you the estimated expenses that you’ll need to fund before you start making money. A lot of companies make the mistake of not accounting for costs such as this and this is the last thing that you need. If you want to stop this from being the case, then it’s a good idea for you to take your time to make sure that you are not forgetting anything.
Ensure you Have a Financial Cushion
Even if you do have a solid plan in place, you have to remember that you may end up experiencing delays and setbacks. Make sure that you have enough money to fund your business and also make sure that you have a cushion where possible. If you are taking a loan then make sure that you ask for 10% extra if you are able, as this will stop you from having to borrow money later on, at a higher interest rate.
So, starting a business isn’t easy but there are things that you can do to try and make it easier on yourself. Estimating your expenses properly is one of the best things that you can do, so make sure that you are doing this properly.