Business Plan - Start Up Costs

Financing your Start up

Now that you have figured out all the cool stuff you will need to make your product and are going to buy for your business, it is time to figure out how to pay for it all!

So how is that determined? We have provided you with a range of costs associated with starting your own business that was provided to us from Entrepreneurship Magazine.

Start Up Costs - Type of Business
Expense Categories
Manufacturing
Retail
Wholesale
Service
You make the product
You sell to customers
You sell to businesses
Your business is not a "hard" good but you do something for people
Deposits (rent, utilities, phone)
7,500 - 20,300
3,900-35,300
7,400 - 17,700
4,200 - 14,000
Furniture and Equipment
20,100 - 42,000
9,000 - 42,000
22,500 - 54,900
2,000 - 54,100
Machinery Equipment
10,000 - 60,000
5,000 - 32,500
19,900 - 33,900
Transportation Equipment
32,000 - 45,000
4,000 - 45,000
32,000 - 45,000
Building Improvements - this is to fix up a place
11,000 - 42,000
7,000 - 52,500
15,000 - 30,000
7,000 - 21,000
Professional Fees - Lawyers, etc.
1,500 - 4,500
1,500 - 4,500
1,500 - 4,500
1,500 - 4,500
Advertising
3,000 -10,000
8,000 - 15,000
3,000 -10,000
3,000 -10,000
Working Capital - this is money you need to start
9,900 - 45,000
3,800 - 93,700
25,000 - 75,000
9,900 - 45,000
Inventory - products you have
13,000 - 57,000
35,000 -157,000
23,000 - 122,500
2,000 - 5,000
Miscellaneous
3,000 -10,000
8,000 - 15,000
3,000 -10,000
3,000 -10,000
Totals
112,000 - 336,000
131,800 - 492,800
152,000 - 403,000
61,000 - 187,900


Your job will be to determine how much your business will cost to start up - the answer might surprise you.

To do:

  1. Click on a new tab at the bottom of your Financial Notebook - name this tab - Start Up Costs
  2. Put in all of the titles along the side of the spreadsheet (from Deposits through Inventory)
  3. Select the type of business you are (either Manufacturing or Retail or Wholesale or Service)
  4. Determine the cost you would expect to have to spend to get your business started (this will be a guess-timate). If you have a super expensive product - you will need to go towards the higher end. In that this is not an exact science, some costs might be on the high end and some might be on the low end.
  5. This is in dollars - total it up (use the sum function)
  6. You will write a summary at the end that addresses each of the expense categories (why you choose the amount you did from an expense standpoint - not just "because" - be a bit more specific. For example, "Our advertising expense is starting at $30,000 because we really want to do a big push to introduce the product. We are planning on running some television commercials and a magazine ad campaign - you know it takes money to make money."
  7. When you have completed the spreadsheet, title a Word document as Start Up Cost and write a short paragraph that describes how you derived your forecast (basically summarize the steps above in paragraph form). Then insert your spreadsheet below the paragraph. Save this file as Start Up Cost in your business plan directory.
  8. Save this as start up in your Business Plan folder

     

    For Reference - Link to ZM - Climb On - Game On Financing - In the Shared Directory (P) - CHS/handouts/CSB/2010-2011/Business Plan/ZM Finances.xls

 

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