Day 1. Finding the Right Fit
Day 2. Research and Evaluate Your Idea
Day 4. Write Your Business Plan
Day 5. Find Financing
Day 6. Name Your Business
Day 7. Develop a Marketing Plan
Day 8. Build Your Support Team
Day 9. Execute Your Marketing Plan
Day 10. Hang Out Your Shingle and Sell
It's critical to determine how much cash you'll need to open and operate your business before hanging your shingle. To keep your business running smoothly in its startup phase, you'll need enough capital to cover all expenses until you reach the break-even point. Many experts recommend new companies start out with enough money to cover projected expenses for at least six months. It's foolhardy to expect to generate revenue immediately -- it's best to plan for all contingencies.
Create a checklist of expenditures. These tips can help you get started:
- List the equipment, furniture, supplies and people needed to operate your business.
- Itemize startup costs for inventory, signage, sales and marketing literature or tools, research and product development, licenses, permits, operating capital, and legal or professional fees.
- Calculate your monthly overhead for rent, supplies, utilities, business and health insurance, taxes, Internet access, shipping and other services.
- Factor in your salary and employee or contractor wages.
Refer to industry-specific startup resources for additional costs that may apply to your respective business type. To determine accurate cost estimates, a good rule of thumb is to assume everything will cost more than you expect. Pad your number to create a safety net.
Then, tally and double-check the numbers before you begin writing your business plan and searching for startup funds.
Use Entrepreneur.com's FormNet worksheets to help you estimate startup costs:
- Business Startup Cash Needs
- Personal Cash Flow Statement
- Development Budget Worksheet
- Business Insurance Planning Worksheet
Tomorrow -- Day 4: Write Your Business Plan
Life insurance as low as $14/mo for $250,000 or $21/mo for $500,000 of coverage. Contact MetLife®
Comments:
Everyone should know that the Forms from FormNet ARE NOT FREE. You have to join for a fee to get access.
I think startup cost should include cost of exit (legal fee) as well.
Just finished calculating the total startup amount needed for the first month along with the second and third. Many expenses for me consitsted of a virtual assistant, PPC campaings, and web based email clients. You can check out all the startup items, great links, and worksheet numbers on my blog at: http://anurbanstyle.com/startup-day-3calculating-startup-costs-to-open-a-business/ Look for the day 4 business plan to be posted either today or tomorrow. Andrew Carpe Ominous
Thank you for highlighting the need to have enough money to cover six months' expenses! This has got to be one of the biggest mistakes new business owners make. Many seriously underestimate the ramp-up time for their business to being posting significant revenue and profits and are strapped for cash from Day One. It takes money to make money! If you are counting on a paycheck from your new business within the first six months, you may want to re-evaluate. You will have a much better chance of success for your business if you have that extra buffer (six months' operating expenses) set back! Lisa Sperow www.StartYourOwnSmallBiz.com