Knowing the costs for starting a new business at the outset gets the business started on the right footing right from day one. The knowledge of start-up costs helps determine all the financing needs and helps map out the business plan. Both of these things enable businesses to obtain bank loan approvals.
Identify the Priorities Knowing the cost of starting a new business helps to understand the cash flow of the business as well. When the entrepreneur knows the business costs, it is easier to determine which ones need to be paid first, and which can wait until later. This can save quite a bit in interest costs, especially when borrowing money to finance a business. Even when using their own savings to finance the business, the entrepreneurs can earn interest on the money they do not need straightaway by placing it in a deposit, or leaving it in a savings account. Setup Costs Apart from the costs of financing, take a look at the following setup costs. 1.
Legal and professional fees include registering your business name and the legal costs of registering the business as a proprietorship, corporation, or partnership. 2.The costs of a rental lease for your business premises. 3.The initial rental payments for the premises.
4.Equipment like office furniture, computers, and software. 5.
Office fittings and decor. 6.Other professional fees, such as fees for a graphics designer or public relations consultant. 7.Office supplies like paper, letterheads, and business cards. 8.
Marketing and advertising costs. 9.Costs for obtaining permits and licenses. 10.Insurance costs for employee compensation.
11.A bank balance sufficient to meet payments for the upcoming quarter There are many other costs for starting a new business that the entrepreneur must loot at in order to create realistic and profitable business and financial plans so that the business has the best chance to succeed. To obtain an idea of what these are, search for resources on the inter-net. Many websites offer software and industry-specific packages to help determine the costs of starting a new business. It is a good idea to check with the local small business development authority for the best business support and advice.
Speak to a CPA that specializes in small business set-ups. Attend local business group meetings and talk to as many businesspeople as possible for guidance. Additional Help Software packages are available to new business owners to aid them in their endeavors. This software helps companies operate legitimately and keep track of their records.
Many of these packages are geared toward small and new business owners and are affordable for those on a budget.
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com