Following is a brief outline of the components you’ll need to include in a startup-costs worksheet. Your worksheet should list all the facilities costs, equipment, initial supplies and materials, advertising materials, and miscellaneous costs you need to open your business. Once you understand all of the cost categories involved, you can verify that your plan has captured all of the expenses needed to get started. Create a worksheet (page) in your spreadsheet software that lists out all of your startup costs. Put items down the left side and add costs in the column to the right. Organize and total up costs for each of these sections: Facilities, equipment, supplies and advertising, and miscellaneous. Add other relevant categories as well, such as labor or headcount. Create a grand total that sums up the costs for all sections. This will reveal the amount you will need for your startup. Include DetailsBe as detailed as possible and include everything to get a better picture of what you will need. Don’t forget wastebaskets, decorations, and any promotional items you hand out to let people know about your business. The more detailed you make your worksheet, the closer you will come to a true picture of your startup needs.
Lease security depositMost commercial leases require an initial security deposit equal to one month or more in rent.Other DepositsInclude an amount for deposits on utilities and phone service.Tenant ImprovementsUntil you have settled on a location and received estimates on the cost to remodel the facility to suit your needs, you won’t know this cost, so you will have to estimate.SignageSignage includes all exterior and interior signs. Estimate high; they are more expensive than you think.Other Facilities CostsThere may be other costs related to your facility, such as fees for appraisals or city/county taxes, that you will need to pay.
Note: The term “tenant improvements” or “TI” can also be expressed from an accounting viewpoint as “leasehold improvements,” and from a construction viewpoint as “build-out.” All three terms mean the same thing.
Office equipment and furniture for owners and employeesSpecialized equipment for manufacture, warehousing, or shipment of productsComputers, software, and peripherals (printers, etc.) for office and other areasPhone systems, cell phones, and computer networking equipment
Determine Business Vehicles Needed
Depending on your business, you may need to lease or buy vehicles for:
DeliveryManufacturing activitiesCars for salespeopleCars for executives
These are just the initial costs of purchase, which should include costs for delivery, setup, and training (for depreciation purposes).
Office suppliesJanitorial suppliesSupplies for manufacturing activitiesSupplies for shipping and mailingStationery and business cardsAdvertising materials, such as brochures, flyers, other printed advertising materialCosts for an advertising agency to prepare an ad campaign for your startupDesign costs for advertising and web siteWebsite setup
Fees for attorney to set up legal form of business, to assist with commercial lease documents, and other pre-startup negotiationsFees for CPA to set up bookkeeping systemLocal business licenses and permitsInsurance deposits
There may be other costs you didn’t expect, so include a comfortable amount as a buffer for any other miscellaneous expenses that might come up. Finally, remember that you can deduct startup costs from your first-year business taxes, so save all of your receipts.
