There is much more to starting a business than sales and office space. Regardless of what type of business you intend to open, a successful business venture requires meticulous accounting and planning of the initial startup costs. Overlooking the financial requirements of opening a business can ultimately lead your business to doom. While all businesses are different and require different start-up costs, there are a few costs you can expect to see.
Developing a Business Plan
Whether you are opening a brick and mortar, an independent insurance agency, or an online business, your company will need a well-developed business plan. A business plan is essential to the start-up effort, as it is a detailed map of your business. Additionally, developing a business plan will force you to identify your startup needs and expenses.
Insurance, License, and Permit Fees
Depending on what type of business you intend to open, to legally operate you may be required to obtain licenses and permits. This requires a bit of research into your state laws for the type of business you run. You may also want to plan and accommodate for registration fees.
Another startup cost you may want to consider is the cost of borrowing. While some companies with low startup costs may not require funding, many companies require an infusion of capital during startup. Funding for startup companies is acquired through either equity or debt financing. While equity financing entails the issuance of stocks, debt financing is most likely obtained in the form of a small business loan.
Equipment and Supplies
During your startup phase, you may also want to consider the costs of the equipment and supplies that are needed to efficiently run your business. For example, opening a clothing store requires that you take into account all the supplies and equipment you need to make and sell your clothing. Therefore, you may want to consider the cost of a sales machine and other supplies you may need.
When starting a business there are a ton of different aspects to consider, including the expenses you may incur during startup. Before you start your business, take an assessment of all the costs that may arise and develop a plan for how you intend to cover them. With a meticulous plan for your startup expenses, you can rest assured that your business will run smoothly.
Emma Sturgis is a freelance writer based out of Boston, MA. She writes most often on health and education. When not writing, she enjoys reading and watching film noir. Say hi on Twitter @EmmaSturgis2
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