Start-up costs template

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<p>Your Start-up Costs Calculator can help you decide whether your idea will make money before you make the commitment to invest time and capital.</p>
<p>The calculator is divided into five parts and it addresses two key financial areas that have to be examined in order to make the smartest business decision – costs and revenue potential.</p>
<p>First, read through the introduction section so you’re clear about the best way to fill in your business’s figures.</p>
<h2>Step One – Enter your estimated capital costs</h2>
<p>All start-up businesses have start-up costs. In the capital costs section, enter the costs of your business’s equipment and assets, and each of their expected lifespans.</p>
<p>For example, if you plan to purchase two laptops at a total cost of $2,000 and their expected lifespans are both five years, then put these numbers into your start-up costs calculator.</p>
<p>Next, enter your business’s other ‘one off’ costs such as initial stock, license fees and promotional costs.</p>
<h2>Step Two – Enter your monthly costs</h2>
<p>Switch to the monthly costs section and enter your business’s monthly running costs. These are the costs that your business will incur regardless of your level of sales – such as rent, insurance and loan repayments.</p>
<p>For example, you might be starting up a retail store selling electronic goods and your monthly running costs include:</p>
<ul>
<li>Insurance – at $50 a month.</li>
<li>Rent – costing $300 per week ($1,300 each month, assuming your store doesn’t close for an annual holiday).</li>
<li>Advertising – averaging out at $200 each week ($867 per month).</li>
<li>Electricity – at an estimated monthly average of $1,000.</li>
</ul>
<h2>Step Three – Enter your customer data</h2>
<p>In the next section, you’ll have to enter your customer data for the template to find out your potential revenue.</p>
<h3>Determining revenue potential</h3>
<p>Your Start-up Costs template helps you consider your business idea’s revenue potential by estimating the:</p>
<ul>
<li>Maximum number of potential customers you expect per day – Aim to be realistic. If you’re opening an intimate fine-dining establishment with just five tables, it’s unlikely you’ll serve 500 customers per day.</li>
<li>Number of days you’ll be open each year – If you plan to be closed on holidays and weekends, make sure you subtract those days from the year.</li>
<li>Percentage of customers who make a purchase from your business – Conduct research to uncover average conversion rates for your industry.</li>
<li>Average sale per customer – This will depend on your market and your product or service. Do your research to see what the market will accept.</li>
<li>Average cost per customer (if applicable) – How much does it cost to produce your product or service? In some cases, particularly with service businesses, you may not have any per customer costs. If so, skip this box.</li>
</ul>
<p>The template determines your business idea’s revenue potential based on these figures along with information found in your capital and monthly costs sections.</p>
<h2>Step Four – Complete your costs summary</h2>
<p>Once you’ve entered your estimated costs and revenue figures, your Start-up Costs template presents you with a summary that details exactly:</p>
<ul>
<li>How much money you’ll need to get started.</li>
<li>How much money you’ll need to run your business on a monthly basis.</li>
<li>How much potential revenue your idea could generate after deducting annual expenses.</li>
</ul>
<p>Also fill in the spaces for your business concept and description.</p>
<h2>Step Five – Review your costs summary</h2>
<p>Many businesses fail to work out if their business idea can turn a profit – a mistake easily remedied with the simple Start-up Costs template. Review your summary to determine if your business idea has an acceptable level of revenue potential to start up.</p>
<p>Your Start-up Costs template can also provide you with the confidence you need to move forward if your idea has promising revenue potential. It will also help you make your case should you seek a small business loan or a relationship with private investors.</p>