How To Estimate Startup Costs

How to Estimate Startup Costs

By Tim Berry

One of the reasons having a business plan is a good first step for starting a business is to answer the fundamental, and critical question of how much money it will take to get the venture started. I’ve had two good friends who, with different businesses in different years, started strong but failed because they ran out of resources.

In the first case, additional funding might have been available had my friend planned better and applied for a larger loan. But when things went bad, his credit suffered and he wasn’t able to ask the bank for more money. In the case of my second friend, she probably would have planned to use fewer resources and ramped up more successfully if she had a more detailed estimate of her startup costs.

The point is, having an educated idea about startup costs can benefit your business more than not having a plan at all, and facing more unforeseen surprises. The key is to look at your business expenses as individual components.

You can calculate starting costs by making three simple lists, a few educated guesses and then adding them all up.

List spending on assets. Your business assets are the things you need to use in your business over the long term. For example, if you’re starting a brick-and-mortar store, that might include items such as shelves, tables, a cash register and so on. A graphic artist might need specialized printers and a drafting board, among other things.

If you’re either making or selling products, think about the inventory you’ll need to have at the start. The easiest example is the books a bookstore needs to stock its shelves or the raw materials a manufacturer might need to start assembling a product. If you’re starting a service business — meaning you don’t make or sell products — then don’t worry about inventory. You can skip this step.

All of these items make up your starting assets. While you might also think the money you have in the bank is an asset to list here, we’re going to save that for another list later on.  Read More

http://www.entrepreneur.com/article/220342

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Organizing Your Company

Organizing Your Company
Strategies for Small and New Start Up Businesses

Developing your company organization involves tapping into a variety of resources that you will need to put your company on an even playing field with the more seasoned or experienced businesses in your field.

Most new and small businesses cannot afford the overhead burden to hire the professionals necessary to cover all of the major functions required for effective and efficient business operations. When you think about what you will need consider the following:

Housekeepers – These are your corporate office support staff who take care of the day to day operations of your business which includes functions such as administrative support, human resources, finance, accounting, and payroll.

Hunters – The hunters are your marketing and business development staff who are out searching for new contracts and/or new work for your business. This will also include the staff needed for advertising your business through use of websites and the internet. They help to build business through networking and seeking new business relationships.

Farmers – After obtaining new work/contracts the farmers are your line managers and supervisors working on your current contracts. These individuals help keep your clients satisfied while working to grow your existing business with added services or products.

As your company grows and you can afford to add more full-time staff to each of these areas, your organization chart will expand adding different tiers to your staff or in other words as your pasture grows you will need more farmers, and field hands.

You may need to re-organize your company organization each time you win a new contract to ensure that you can properly manage the new work and guarantee your new client quality services and or products.

Copyright © 2011 – 2016 by AW Enterprises

BUSINESS TIP: Mind Your Business!

I recall a popular song in the 1970’s entitled “To Each His Own”; in the song they quoted the following phrase, “The best of business in the line of business is to mind your business, if you got no business then make it your business to leave other people’s business alone”. While remembering this phrase, I started thinking of it’s relevancy to the plight of many business owners in today’s world. I am speaking of those businessmen and women who spend the majority of their business development energy on trying to take away business from their competitors.

Yes, there is a time when one business can legitimately inherit business from another company. However, many focus on ways to strategically get the business to a fault and they end up sometimes crossing lines where their integrity can be questioned. I am urging you to “mind your business”. The best way to gain new business is to go through the proper channels which include networking, providing quality and competent services, and most of all positioning yourself for consideration by potential clients by focusing on how your business can provide the best services for them instead of blackballing your competitor. Trust me your clients can easily compare the quality of services you have to offer over the quality of their current contractors. Another way to gain the new business you desire is to possibly become a partner to your competitor and they can bring you in to assist them in servicing their client which will give you the business experience you need to someday perform the service on your own.

So “mind your business” and your business’s track record and excellent performance will speak for itself and will lead to new opportunities for your organization.  

Check out the first episode of our new Podcast Series titled Mind Your Business – Mind Your Business Podcast Presented by AW Enterprises.

Copyright © 2011 – 2016 by AW Enterprises