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How Much Money Do I Need To Get My Business Started? Helpful Facts to Keep in Mind

In order to find out how much seed money you will need, you must estimate the costs of your business for as a minimum the first several months. In fact, each business is unique, and has its own particular money needs at various stages of growth, so there is no universal technique for estimating your startup costs. Some businesses can be started on a shoestring finances, while others may require considerable investment in inventory or equipment. It should be in addition added that it is vitally important to be aware of that you will have sufficient money to launch your business undertaking.

The first feature that you need to be familiar with and considered to be the most crucial for any individual who wishes to start his/ her own business is to establish your startup costs. It only means that you must identify all the expenses that your business will incur during its startup point. Some of these operating cost will be one-time costs such as the fee for incorporating your business or price of a sign for your building. Some will be constant, such as the cost of utilities, inventory, insurance, etc.

Another principal thing for you to take into account is that while identifying these costs, decide whether they are essential or optional. A rational startup budget should only consist of those things that are crucial to start that business. You need also to keep in mind that these vital expenses can then be divided into two separate categories: fixed and variable. Fixed expenses consist of rent, utilities, administrative costs, and insurance costs. Variable expenses consist of inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service.

To go into more details it should be pointed out that the most effective method to determine your startup costs is to use a worksheet that lists all the different categories of costs (both one-time and ongoing) that you will need to estimate prior to starting your business. The next tool will assist you in performing that task:

Start-Up Cost work sheet

One-Time Start-Up Costs

Fixtures and equipment
Decorating and remodeling
Installation of fixtures and equipment
Starting inventory
Deposits with public utilities
Legal and other professional fees
Licenses and permits
Advertising and promotion for opening
Consulting & software
Cash
Other

Monthly Expenses

Salary of owner-manager (amount you need to pay yourself)
All other salaries and wages
Rent
Advertising
Delivery expense
Supplies
Telephone
Utilities
Insurance
Taxes, including Social Security
Interest
Maintenance
Legal and other professional fees
Miscellaneous

Calculate total start-up funds
Calculate total monthly expenses

Estimate the number of months needed to get customers, get established and start making money.

(# of months X mointhly expenses) + one-time costs = total start-up money needed

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