Startup Junction

Every business has its own startup costs. For example, to start a fast food franchise you may need anywhere from $50,000 to $1,000,000. On the other hand you might be able start an internet based home business for less than $10,000. Therefore, there is simple method for estimating your startup costs. However you should should know what it will cost and if you have enough money.

To determine your startup costs you should consider the following:

1. One time costs such as equipment, licenses etc.
2. Monthly ongoing fixed costs such as insurance, leases, salaries,utilities etc.
3. Monthly variable costs and overheads such as shipping costs.

Below is an outline of One time and Monthly costs you may want to consider.

One time startup costs

1. Plant and Equipment (including decorations,fixtures, computers etc.)
2. Starting inventory
3. Deposits and Retainers
4. Licenses and permits including legal fees to structure you business.
5. Intial Advertising and PR to create a buzz
6. Other

Monthly Expenses

1. Salaries
2. Lease / Rent
3. Advertising & Marketing
4. Supplies & Utilities
5. Insurance & Interests
6. Taxes
7. Interest
8. Maintenance
9. Professional Fees
10. Other

It is recommended that you should use the equation below for your startup cost:

Total Startup Cost = One time costs + 12 * (Monthly Expenses)

This equation will give you the amount of cash you need for the fist full year.