Cost Of Business Plan

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Here’s a visual in spreadsheet form, of sample starting costs for a hypothetical bicycle store.

Notice that the lists for estimating starting costs, on the left in the illustration above, are matched to another list of starting funding, on the right side of the illustration.

If you don’t have enough firsthand knowledge, then you should be talking to people who do.

For others, such as insurance, legal costs, or graphic design for logos, call some providers or brokers, and talk to partners; educate those guesses.

Books have to balance, so the initial estimates need to include not just the money you spend, but also where it comes from.

In the case above, Garrett had to find 4,500, and you can see that he financed it with Accounts Payable, debt, and investment in various categories.

For existing companies that already have financial results, projections start with the expected ending balance of the previous period. Starting costs are essentially the sum of two kinds of spending.

You can estimate them both in two simple lists: I’ve used a bicycle store as an example in several posts that are part of this series of standard business plan financials.

And the Live Plan cash flow estimator will help you decide how much cash you need, so you don’t have to follow the spreadsheet method here (below).

Obviously the goal with starting costs isn’t just to track them, but to estimate them ahead of time so you have a better idea, before you start a new business, of what the financial costs might be.


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