| The startup cost estimate table will help you answer | | | | early stages. |
| the second question of this business startup financial | | | | Total for Three Months |
| series: how much money will you need to start your | | | | __________ (Total of table 3) |
| business? The chart is for a generic retail business. | | | | X 3 |
| Items will vary for service, construction, and | | | | =__________ (Three months' operating expenses) |
| manufacturing businesses. The answer to the third | | | | By adding the total startup costs (table 2) to the total |
| question (How much money will you need to stay in | | | | expenses for three months (table 4), you can learn |
| business?) must be divided into two parts: immediate | | | | what the estimated costs will be to start up and |
| costs and future costs. | | | | operate your business for three months. By now |
| Startup Cost Estimate | | | | subtracting the cash available (table 1), you can |
| Decorating, remodeling $____________ | | | | determine the amount of additional financing you may |
| Fixtures, equipment $____________ | | | | need, if any. |
| Installing fixtures, equipment $____________ | | | | Additional Financing Needed |
| Services, supplies $____________ | | | | _________ (Table 2 total) |
| Beginning inventory cost $____________ | | | | + _________ (Table 4 total-three months' operating |
| Legal, professional fees $____________ | | | | expenses) |
| Telephone utility deposits $____________ | | | | = _________ (Three months' startup/operating |
| Insurance $____________ | | | | expenses) |
| Signs $____________ | | | | - _________ (Table 1 total-cash available) |
| Advertising for opening $____________ | | | | = _________ (Additional financing needed) |
| Unanticipated expenses $____________ | | | | After Startup |
| TOTAL STARTUP COSTS $____________ | | | | The primary source of revenue for your business will |
| From the moment the door to your new business | | | | be from sales or services performed, but your sales |
| opens, a certain amount of income will undoubtedly | | | | will vary from month to month because of seasonal |
| come in. However, this income should not be projected | | | | patterns and other factors. Therefore, it is important to |
| in your operating expenses. You will need enough | | | | determine if your monthly sales will produce enough |
| money available to cover costs for at least the first | | | | income to pay each month's bills. |
| three months of operation. The next table will help you | | | | Conclusion |
| decipher your estimated finances for one month. This | | | | Without a doubt, preparing an adequate plan is the |
| will help you project your operating expenses on a | | | | most important step in starting a new business. A |
| monthly basis. | | | | comprehensive plan will be your guide to managing a |
| Estimate for One Month | | | | successful business and is paramount to your business |
| Your living costs $____________ | | | | success. Your plan must contain all the pertinent |
| Employee wages $____________ | | | | information about your business; it must be well written, |
| Rent $____________ | | | | factual, and organized in a logical sequence. Moreover, |
| Advertising $____________ | | | | it should not contain any statement that cannot be |
| Supplies $____________ | | | | supported. We will cover this further in strategy my |
| Utilities $____________ | | | | article series. |
| Insurance $____________ | | | | If you have carefully answered all the questions on the |
| Taxes $____________ | | | | checklists and completed all the worksheets, you have |
| Maintenance $____________ | | | | seriously thought about your goal. Nevertheless, there |
| Delivery/transportation $____________ | | | | may be some things you feel you need to know more |
| Miscellaneous $____________ | | | | about. |
| TOTAL EXPENSES FOR ONE MONTH | | | | Owning and running a business is a continuous learning |
| $____________ | | | | process. Research your idea and do as much as you |
| Now multiply the total of table 3 by three. This is the | | | | can yourself, but do not hesitate to seek help from |
| amount of cash you will need to cover operating | | | | people who can tell you what you need to know. |
| expenses for three months. Deposit this amount in a | | | | Consider hiring a business coach obtain assistance |
| savings account before opening the doors to your | | | | from your local SBA office, Small Business |
| business. Use it for only those purposes listed in the | | | | Development Center (SBDC), or the Service Corps of |
| above table because this money will ensure that you | | | | Retired Executives (SCORE). |
| will be able to continue in business during the crucial | | | | |