Startup Costs, What to Expect
Every business starts somewhere, whether it is slow or fast in one day. Starting costs are important to know and plan for when talking to a bank, investors, or yourself in the morning. There are no right or wrong costs when starting your business, but knowing what you are spending for the business (not personal) is important when it comes to your bookkeeping, what can be amortized, and deducted. Below are a lot of examples to include within your start.
Rent/Facilities
Utilities/Operating Cost
Salaries/Labor
Supplies/Equipment
Repair/Maintenance
Legal/Insurance
These are a few expense categories to consider when starting your business. Some of these may be applicable but others may not be, please only consider expenses necessary to your business. Sit down and create your own list of expenses and a checklist that you will know will need to start your business. Next, budget how much you think it will cost (note: this is not the actual cost).
Rent/Facilities = B2,500/month
Utilities/Operating Cost = B500/month
Salaries/Labor = B100,000/year
Supplies/Equipment = B50,000/quarterly
Repair/Maintenance = B250/month
Legal/Insurance = B3,000/month
Now, the numbers that you budgeted (B) will not be actual but it is good to do research to guesstimate the costs are as closest to the actual (A). After you have purchased, categorize it to know the actual you paid to keep in your records.
Rent/Facilities = B2,500/month = A2,475/month
Utilities/Operating Cost = B500/month = A450/month
Salaries/Labor = B100,000/year = A120,000/year
Supplies/Equipment = B50,000/quarterly = A50,000/year
Repair/Maintenance = B250/month = A300/month
Legal/Insurance = B3,000/month = A2,965/month
The list above shows an example of how budget to actual variances can be. Fit the business's budget to best suit you, your business, and ask your accountant for help on organizing and categorizing to best plan for reality. Before diving into your business, do research on information about starting a business and take notes. Next, talk with an accountant and a lawyer about your best game plans. Thank you for joining the Equidae Family! You can find more information on our YouTube channel as well.