Although starting a business is quite exciting, there is more to a business than employing people and furnishing an office space. Nowadays, startup costs are quite huge since entrepreneurs have to purchase software, equipment, appoint employees, and sign leases. These are just the basic costs since they also have to host a website, make business cards, and acquire licenses and permits, among others. Most entrepreneurs, however, overlook startup costs and start their business in an unplanned manner. Although this may work, it is usually more challenging.
Business start-up costs
So, how much would it cost you to start your dream business? Truth is, businesses are different and have different start-up costs. Grocery stores and hardware stores have different requirements and restaurants, and nail bars also have different needs. Nonetheless, every business has some start-up costs which the expenses are incurred before the business starts making any income.
Business start-up cost worksheet templates
To calculate the startup costs, our free business start-up cost worksheet templates would be of much help. The worksheet outlines advertising and supplies costs, facilities costs, equipment costs and other business start-up costs. Consolidating costs and ensuring their feasibility is usually the most challenging part. Most entrepreneurs tend to underestimate start-up expenses, exposing the business to the danger of being underfunded. Hence, for the business to run smoothly, overestimated costs are better than overestimated revenues.
For you to build a business start-up cost worksheet, you need to format a page spreadsheet application such as Excel. For all start-up expenses, create a worksheet or page, in the spreadsheet software. The costs should be on the right while items should be on the left and each section should have totals. The business start-up cost is the summation of the sections’ totals, including advertising and supplies costs, equipment costs, and facilities costs.
Startup Business Plan and Cost Template
Startup Budget Template xls Format
Business Start-up Costs Spreadsheet Template
Sample of Start-up Business Plan
Costs to include in the startup cost worksheet
For accuracy of numbers, you have to be detailed. You can conduct extensive research by consulting other entrepreneurs, listing all costs that would be applicable. Everything that you may need, including stationery and décor, should be recorded.
If you are starting a moving company, you will need a truck, and those opening restaurants need, ovens, cookers, cooking utensils and dishwashers. Businesses may also need vehicles for salespeople and delivery. Hence, equipment costs cover any machines and vehicles required for the business. They may be expensive, but there are various equipment financing options such as leases, loans, and lines of credit.
Costs linked to the business’ location are the facilities’ costs. The expenses include utilities, lease expenses, construction expenses and the facility’s preparation costs to suit the business’ operations. Whether you rent or buy the space, facility costs can be expensive. However, if you go for a commercial lease, signage, lease security deposits, tenant improvements, utilities’ deposits, and taxes should make up your start-up expenditure.
Advertising costs cover banners, signs, business cards and paid advertisements. You could also be more creative and use giveaways and videos, but these may need a video producer. Supplies costs pile up fast since employees will need desks, phones, computers, and chairs. These are just the basics since the office may also need a microwave, a fan, shelves, and supplies such as ink and paper. Software such as Quickbooks may also be a requirement. For efficiency, these costs should be covered in the monthly budget.
Depending on the business, you will incur other business start-up costs including legal and permit fees, inventory, insurance, payroll, travel, shipping, professional consultancy, and other miscellaneous expenses.
Do the math
For each section, calculate the subtotals and come up with a grand total business start-up cost statement. If you provide the business with your vehicles and equipment, value the contribution and subtract from the total amount. The result is what you need for your startup. If the costs seem very high, re-evaluate the expenses and determine how to reduce them. For instance, if the commercial lease is too expensive you could consider working from home, a serviced office space or co-working spaces. Instead of pricey software licenses, cloud-based services would be a great option. To avoid advertising expenses, you could use social media for free advertising. Facebook, Instagram, Pinterest, Twitter, and Tumbler would be excellent choices. Also, consult other entrepreneurs for feasible frameworks of managing costs.