Identify your startup expenses

• Most business fall into one of three categories: brick-and-mortar, online businesses, and service providers. You'll face different startup expenses depending on your business type.
• There are common startup costs you're likely to have no matter what. Look through the following list, and make sure to add any other expenses that are unique to your business:
• Office space
• Equipment & supplies
• Communications
• Utilities
• License & permits
• Insurance
• Lawyer & Accountant
• Inventory
• Employee salaries
• Advertising & Marketing
• Market research
• Printed Marketing Materials
• Making a website

Estimate how much your expenses will cost

• Once you have your list of expenses, you can estimate how much they'll actually cost. This process will be different for each expense you have.
• Some expenses will have well-defined costs - permits and licenses tend to have clear. published costs. You might have to estimate other costs that are less certain, like employee salaries. Look online ad talk directly to mentors, vendors, and service providers to see what similar companies pay for expenses.

Add up your expenses for a full financial picture

Once you've identified your business expenses and how much they''' cost, you should organize your expenses into one-time expenses and monthly expenses. One-time expenses are the initial costs needed to start the business. Buying major equipment, hiring a logo designer, and paying for permits, licenses, and fees are generally considered to be one-time expenses. You can typically deduct one-time expenses for tax purposes, which can save you money on the amount of taxes you'll owe. Make sure to keep track of your expenses and talk to you accountant with it's time to file your taxes.

Monthly expenses typically include things like salaries, rent, and utility bills. You'll want to count at least one year of monthly expenses, but counting five years is ideal.

Add up you one-time and monthly expenses to get a good picture of how much capital you'll need and when you'll need it.

Use your start up calculations to get start up funding

It's a god idea to create a formal report of your expected start up costs.

You want it in a format that is clear and easy to understand. Investors and lenders compare expected costs to project revenue and determine the potential for your business to profit.