Readers Question #1
How Much Money Do I Need To Start a Business?
I wasn’t surprised that this was one of the first questions I received about starting a small business. The answer isn’t an easy one and it will require you to do a lot of research before you make any decisions. Here are some ideas that can help you determine how much you’ll need to launch your business:
Where are you going to operate your business? Costs related to your location should include:
Land purchase and construction costs
Building lease/purchase and renovation costs
Utilities and signage
Contingency funds – ALWAYS allow for a little extra just in case
What do you need for equipment and furniture? Costs related to operations should include:
Manufacturing equipment and maintenance costs
Product packaging equipment and warehousing costs
Shipping and Receiving equipment costs
Office equipment and maintenance costs
Office furniture and décor costs
What do you need for start-up fees and permits? Costs related to permits and fees should include:
Legal fees – related to purchasing land, buildings and equipment
Legal fees – related to building facilities, lease agreements, etc.
Legal fees – related to administration, human resources and contracts
Permits – related to municipal building by-laws, environmental regulations and other government regulations
Licenses – related to business ownership, incorporation, etc.
Accounting – related to setting up your business structure and accounting systems
What do you expect your costs to be for the first year of operation?
Try to estimate what your expenses may be for the first year. These costs should include:
1. Payroll and related costs
2. Office Supplies and related expenses
3. Marketing and advertising costs
4. Travel and related costs
This is by no means an exhaustive list. Make sure you do your research and be as detailed as possible. Don’t be afraid to ask for help if you need it. Keep your questions coming and we'll do our best to answer them as quickly as possible.
