| The first time you go through the costs to start up | | | | significantly less in terms of fixtures and equipment. |
| your new business, you do not need to be particularly | | | | Computers, fax machines, modems are some of the |
| precise. You can just "ball park" the amount to get a | | | | most important equipment that you would need. In |
| rough idea of your expected start-up costs. As you | | | | addition, you should provide some budget for the costs |
| refine your business idea and shop around for the | | | | of installing all the fixtures and equipment and making |
| various items you need to make it happen, you will be | | | | sure that these are ready for use. |
| continually narrowing down your estimates, and | | | | Hiring employees. Allocate a few months' salary for |
| eventually you'll arrive at the actual dollar figures. | | | | the payroll of your new employees. While employee |
| Here are the common kinds of startup expenses that | | | | costs will not actually start until you are open for |
| most small businesses face: Research and | | | | business, some entrepreneurs hire a few employees |
| development costs. Whether you hire a market | | | | even before the business is launched to help in the |
| research firm or do research by yourself, you need to | | | | initial groundwork. |
| budget for costs involved in knowing more about your | | | | Insurance Costs. You will need liability and property |
| market. Interviewing potential customers or suppliers, | | | | insurance to protect yourself and any business assets. |
| checking the Yellow Pages, or photocopying trade | | | | Some other businesses also require workers' |
| publications and articles about your business all involve | | | | compensation, health, life, fire, product liability and |
| costs. | | | | professional malpractice insurance. Check what you |
| Business Plan Preparation. If you are preparing your | | | | need for the kind of your business. |
| business plan yourself, the only cost to you is your | | | | Lease Payments. These include amounts that must be |
| time. | | | | paid for equipment and facility leases before opening. |
| However, there are entrepreneurs who need help in | | | | Expect to pay several months' worth of lease |
| developing their business plans. | | | | payments even before you open your doors for |
| If you are one of those business owners, you need to | | | | business. |
| input the costs of hiring consultants or business plan | | | | Licenses and Permits. This amount will include all fees |
| writers into your initial budget. | | | | charged by the local, state and federal agencies. The |
| Product Development and Beginning Inventory. This will | | | | more regulated your industry, the higher the fees and |
| be your most significant start-up cost. To get a better | | | | charges. Various states also have a different licensing |
| estimate, you can ask potential suppliers for required | | | | requirements and fee structure. If your business is |
| inventory levels for your type of business. Some | | | | based in California, for example, expect to spend for |
| entrepreneurs, particularly those who create their own | | | | putting a legal announcement in the newspaper to |
| products, take years of product development before a | | | | announce your new business. In Virginia, there are no |
| prototype can be launched. You need to factor in the | | | | such requirements. |
| length of time that will take you to develop your first | | | | Professional Fees. You will probably need the |
| products. | | | | assistance of a lawyer in drawing up the proper |
| Advertising and Marketing Promotion Expenses. You | | | | documents and filing them with the state if you are |
| can chose to have some 'buzz' for your business, | | | | forming a partnership, Limited Liability Company or |
| even before you officially open. Some entrepreneurs | | | | corporation. You can opt to incorporate your own |
| do a pre-launch campaign to generate interest for their | | | | business yourself, as long as you understand each |
| products or services. You can also plan for a "grand | | | | form and requirements. Part of the professional fees |
| opening" promotion as well. The cost, of course, will | | | | you need to budget include the accountant's fees, |
| depend on how simple or elaborate your pre-launch | | | | should you decide to outsource your record keeping or |
| activities will be. | | | | accounting tasks. |
| Cash. This refers to the amount of cash that you | | | | Signage costs. The signs for your business |
| need to run your cash register. | | | | establishment can leave a significant dent on your |
| One thing that your business should never be caught | | | | budget. Obtain bids from sign companies, depending on |
| without is cash. | | | | how elaborate you plan your signs to be. |
| Cost of Financing. You also need to allocate some | | | | Supplies. This is the part of your budget for all the |
| funds to help you cover your cost of financing, | | | | office, cleaning and employee supplies that your |
| whether you got your funds from the bank or from | | | | business needs in its first few months. To help you |
| your credit card. Be prepared to pay the interests of | | | | save, try buying wholesale if you can meet the |
| your loans, particularly if you used your credit cards to | | | | minimum order requirements. |
| finance your business. | | | | Cost of Web Site creation. If you are planning to |
| Remodeling and Decorating. This will include physical | | | | supplement your brick-and-mortar business with online |
| and cosmetic improvements to the new business | | | | operations, you need to budget for the costs of |
| facility. Solicit bids from contractors or interior | | | | creating a web site. These include web-hosting fees, |
| designers, even if you decide to do everything later on, | | | | web designer, e-commerce components (shopping |
| to give you an idea of how much these jobs cost. | | | | cart, merchant account, etc). You also need to allocate |
| Fixtures and Equipment. The fixtures and equipment | | | | some amount to cover the marketing and promotion |
| needed for your new business are normally substantial, | | | | expenses of your online business. |
| depending on your kind of business. A restaurant | | | | Unanticipated expenses. The rule of thumb is to |
| business, for example, will need modern kitchen | | | | allocate about 10 percent of your total start-up budget |
| equipment, chairs and tables, tableware and utensils. | | | | for contingencies and other unexpected expenses. |
| On the other hand, a home business will require | | | | |