Launching a business can be an adventure.
Whether you’re just dreaming of working for yourself or creating a product that will change the world, entrepreneurship is an exciting goal to reach for.
But figuring out how to come up with the cash to make it all happen is not quite as magical for most entrepreneurs.
Before you even think about coming up with funding, you’ve got to estimate startup costs.
So, how do you figure out how much you’ll need to get your next venture off the ground?
Keep reading for a closer look at startup cost estimation and how to get started.
What Do You Need to Get Started With Startup Cost Estimation?
Taking the leap and getting started is often the hardest part.
If you’re not careful in the early stages, things can go wrong quickly. After all, nearly eight out of ten new businesses don’t make it through their first year.
That’s why cost estimation is vital as you get started.
As you begin to lay out your expenses it’s important to have a reserve for the early days of your business. Many experts recommend having at least six to twelve months of expenses in reserve when launching a new business.
Having extra cash on hand ensures that you’ll be able to cover expenses before sales start rolling in and your business begins to take off.
Understand Your Assets for Startup Cost Estimation
For many businesses assets are one of the most important pieces of the puzzle.
For traditional storefronts or restaurants, your assets are things like your building, equipment, and inventory.
Make sure you properly estimate the cost of these items as you work out what you’ll need to launch. If you can’t afford basic assets, it’s tough to get started.
Know Your Expenses
Not everything your new business needs is an asset.
Many costs like setting up a website, marketing materials or branding, are considered expenses.
You’ll also have bills to cover, like electricity or internet service. Be sure to include these costs in your estimation.
For tax purposes, there are a lot of things, like computers, that seem like assets but are actually considered expenses. As you make these determinations, it may be wise to consult an accountant.
Financing Your Startup
Once you’ve sorted out the cost of launching your startup, it’s time to figure out how to pay for it.
The options for financing a new business are limited only by your imagination. Entrepreneurs rely on everything from friends and family to bootstrapping, to business loans.
How you fund is entirely up to you. That’s one of the beauties of entrepreneurship–calling your own shots.
If you need help getting started, Your Income Advisor can help get you off on the right foot.
Putting it all Together
Launching a new business isn’t easy. Cost estimation can be a complex, time-consuming task.
But as tough as figuring out costs can be, it’s absolutely necessary to get your startup going.
Check out the rest of the blog, for more insights on getting your next business off the ground.