How much do I need to start my business?

One-time expenses

Computer and telephony equipment and software

Furniture and fixtures

Office supplies

Legal fees

Licensing or other fees

Marketing costs

Prepaid insurance

Security deposit or down payment on property

Utilities deposits

Other

Ongoing monthly expenses

		# of mths.			Amount

Rent or mortgage

Employee salaries

Owner salaries

Utilities

Marketing

Administration

Insurance

Rental costs

Franchise fees or other commissions

Supplies

Other

This calculator calculates how much money you should budget and have available to start your business.

Without adequate capital, you may face a cash crunch and may spend valuable time and energy taking care of cash flows instead of building your business. A cash crunch often forces you to borrow at high interest rates or make additional concessions to investors.

One-time expenses are those expenses paid once to get your business started. Such expenses may include purchasing office equipment, legal fees or deposits for utilities. Ongoing expenses are those expenses that you incur monthly such as rent or mortgage, advertising, and payroll. Be sure to have enough start-up money to cover your ongoing expenses for the first few months of business. A good rule of thumb is to budget for at least three months of ongoing expenses.

Ongoing expenses:Ongoing expenses are those expenses that you pay on a regular basis, even in the early stages of beginning a business. Major types of these expenses include: 1) Rent; 2) utilities; 3) payroll; 4) insurance; and 5) sales, general, and administrative (SG&A) expenses.

One-time expenses:One-time expenses are those expenses that you pay only once in the early stages of beginning a business. Major types of these expenses include: 1) Real estate acquisition; 2) legal and administrative services; and 3) deposits.

Utilities deposits:When you start a business, you will likely face several types of one-time expenses. Deposits for utilities are one of these expenses. Telephone, water, and electricity utilities may require you to make a deposit when you open your business.

Prepaid insurance:When you start a business, you will likely face several types of one-time expenses. Prepaid insurance premiums are one of these expenses. You prepay insurance premiums to coincide with the launch of your business. An insurance policy provides coverage from the date that you want to begin your business.

Office supplies:When you start a business, you will likely face several types of one-time expenses. Office supplies are one of these expenses. Office supplies include printer paper, notebooks, pens, folders, clips, staple equipment, calculators, and related goods.

Rental costs:When you start a business, you will likely face several types of recurring expenses. These expenses are incurred on a regular basis. Rental costs are one of these expenses. Rental costs include rent and other fees related to the maintenance and upkeep of the property.

Marketing costs:When you start a business, you will likely face several types of one-time expenses. Marketing costs are one of these expenses. Marketing costs may include expenses to pay for an initial round of advertising or market research.

Legal fees:When you start a business, you will likely face several types of one-time expenses. Legal fees are one of these expenses. Legal fees include expenses to pay for registration of your business. Legal fees to establish a corporation are generally higher than to establish a sole proprietorship, the simplest form of business ownership.

Cash flows:Cash flows are the actual cash inflows and outflows that you or your business experiences. While you may earn revenues and incur expenses, your cash flows may not mirror these revenues and expenses. Managing your cash flows can work to your advantage. But mismanaging cash flows works to your disadvantage.