01Set up the Startup Costs Statement in a Financial Software Application
To create your startup costs worksheet, you will first need to format a page spreadsheet application like Excel.
You will need to create a worksheet (page) in your spreadsheet software for all startup costs. Put items down the left side and costs to the right. Total costs for each section: facilities, equipment, supplies and advertising, and miscellaneous. Then create a grand total of costs for all sections. This is the amount you will need for startup.
Be as detailed as possible, and count everything, to get a better picture of what you will need. Don't forget wastebaskets, decorations, any items you hand out to let people know about your business. The more detailed you make this worksheet, the closer you will come to a true picture of your startup needs.
02Facilities Costs for Startup
Facilities costs are those related to your location, including your lease, utilities, construction, and costs for preparing the facility for your business use. Assuming you will have a commercial lease, your startup expenditures should include these items:
- Lease security deposit
Most commercial leases require an initial security deposit equal to one month or more in rent.
- Other Deposits
Include an amount for deposits on utilities and phone service.
- Tenant Improvements
Until you have settled on a location and received estimates on the cost to remodel to suit your needs, you won't know this cost, so you will have to estimate.
Signage includes all exterior and interior signs. Estimate high; they are more expensive than you think.
- Other Facilities Costs
There 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.
- Lease security deposit
03Business Equipment and Vehicles
Types of equipment needed for business startup will vary depending on your type of business, but in general, these types of equipment will be needed:
- Office equipment and furniture for owners and employees
- Specialized equipment for manufacture, warehousing, or shipment of products
- Computers, software, and peripherals (printers, etc.) for office and other areas
- Phone systems, cell phones, and networks
Determine Business Vehicles Needed
Depending on your business, you may need to lease or buy vehicles for:
- Manufacturing activities
- Cars for salespeople
- Cars for executives
These are just the initial costs of purchase, which should include costs for delivery, setup, and training (for depreciation purposes).
04Business Supplies and Advertising Materials
Include Supplies Needed
This section of your startup worksheet lists initial quantities of supplies and materials you will need to open your doors the first day of your business. It does not include continuing purchase of supplies and materials (these will be covered in your monthly budget).
- Office supplies
- Janitorial supplies
- Supplies for manufacturing activities
- Supplies for shipping and mailing
- Stationery and business cards
- Advertising materials, such as brochures, flyers, other printed advertising material
- Costs for an advertising agency to prepare an ad campaign for your startup
- Design costs for advertising and web page
- Webpage setup
Next, include other startup fees and costs.
05Other Startup Costs
- Fee for attorney to set up legal form of business, to assist with commercial lease documents, and other pre-startup negotiations
- Fee for CPA to set up bookkeeping system
- Local business licenses and permits
- Insurance deposits
There may be other costs you didn't expect, so include a comfortable amount for miscellaneous expenses.
Finally, put it all together.
06Putting it All Together
Calculate the sub-totals for each section above and create a grand total start-up cost statement. If you are contributing equipment or vehicles or other startup items to the business, itemize your contributions and deduct these from the total amount needed. The new total is the amount you will need to be financed for startup.
Finally, remember that you can deduct startup costs from your first-year business taxes, so save those receipts.
How to Create a Startup Costs Worksheet
Every new business needs to determine startup costs as a part of its startup planning. In this In this article, you will learn how to estimate costs and to make sure you have all the expenses you will need to get started.
Preparing your financial statements for your business plan need not be difficult. Here is a quick outline of a startup costs worksheet. This worksheet lists all the facilities costs, equipment, initial supplies and materials, advertising materials, and miscellaneous costs you need to open your business. The most difficult part is gathering costs and making sure they are reasonable and adequate. It's always better to over-estimate expenses and over-estimate income.