root. Business Templates. November 25th , 2020.
No matter what kind of business you intend on owning, it is a good idea to estimate your business startup expenses prior to jumping in. Whether you plan on starting a small business or a larger franchise, you may be surprised at the total start up cost. Nearly all new business owners underestimate the cost of starting their business, leaving it exposed to the risks of being underfunded. To help you avoid this common mistake, use our Free Business Start Up Costs Template to help you determine how much money you need to get your start up business up and running safely. See below for additional information, tips and resources.
Calculating business start up costs should be a part of starting any business. An entrepreneur is usually required to put these costs together as part of a business plan, loan or grant application. They are also helpful when putting together proforma financial statements.
Start Up Costs for Different Businesses
Starting a restaurant can be expensive because of the specialized equipment and facilities that are required. Luckily, there are usually leasing options available for the expensive items and many landlords will work with you on leasehold improvements. Use the Restaurant specific worksheet in the Business Start up Cost Template to help you consider other expenses such as cleaning costs, uniforms, menu development and supplier sourcing costs.
The nice thing about a home based business is that you can forgo many of the typical expenses of a startup. Things like internet, office space, furniture and utilities are already taken care of. Better yet, if you qualify for the home office deduction, now you can write some of these items off as business expenses. Simply put $0 in the template or delete the rows for those expenses already covered. If you are starting a home-based internet business, continue on to the next section.
A web based business may be one of the least expensive businesses to start, especially if you can do the web development work yourself. Use the basic template and decide which expenses apply to you – simply delete the rest. You may also want to consider some items not listed, such as custom web page design and development work, custom database development and scripting, search engine optimization (SEO) and advanced hosting services to name a few. Also, if your business is retail, don't forget to include all of the referral and usage fees for selling through storefronts like Amazon and Ebay.
Our Business Start up Cost Template will also help you if you are looking for a start up franchise opportunity or looking for franchises for sale. Along with all of the regular costs of starting a business, the template also includes categories for fixed franchise fees as well as monthly franchise dues and marketing co-op fees. You may also want to check with the franchise corporate offices. Many of them provide tools to help you estimate your start up and operating costs.
How to Use the Business Startup Cost Template
The key to putting together accurate numbers is to get into the details. This requires doing detailed research by calling suppliers and providers, searching the internet and listing any and all costs that may be applicable. To help you, the business cost template comes pre-populated with many of the most common expense categories. It also contains additional suggestions and tips for each category to help you make sure you considered everything. Feel free to add additional line items that are unique to your business.
Start by listing the sources of funding that you believe will be available to you in the Estimated column. This would include money supplied by owners and investors, funds available from bank loans or other lines of credit. In some cases you may be pursuing other sources of funds such as grants, endowments or sale of assets.
After all your funding sources have been outlined, start putting in the estimated fixed costs. These costs are one-time costs associated with getting your business up and running. This includes things like leasing space, purchasing assets, stocking up on inventory and getting your legal and marketing issues in order.
Two key parts to the fixed costs are the Working Capital and a Reserve for Contingencies – these can be significant. Any startup is advised to have a Contingency Fund as there are always last minute surprise costs and fees. Consider the risks of your business and set aside sufficient funds accordingly.
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