Breaking down the expenses of a new business

Category: Business


According to the U.S. Small Business Administration (SBA), a study from the Ewing Marion Kauffman Foundation estimates that the cost of starting a new company from the ground up can cost approximately $30,000.  However, these costs can vary depending on many different things, such as the type of business you are looking to open, the type of space you will be operating out of, the location of your business, and so on. This article can help you understand the different components that might influence the total cost of starting your new business.

The startup costs for a new business include two different types of spending: assets and expenses. Assets, also referred to as expenditures or capital expenses, are one-time costs of purchasing assets needed for a business. This includes things like cars, property, inventory, and equipment. It may also include other one-time payments, such as security deposits.

Expenses, on the other hand, are the costs of operation throughout the company’s startup phase that may also last while the company is still in business. This includes things like office supplies, marketing materials, travel, rent, payroll, and so on. Other things that are categorized as expenses include state incorporation fees, legal fees, and other startup costs that business owners may have to face again.

To estimate your startup expenses, begin by making two lists – one for assets and another for expenses. Your list should be informed by the components of your company that will have expenses associated during the startup stage, such as improvements of the facility or the inventory or equipment you need. But don’t forget to consider other things, like business cards, brochures, lawyer fees, and marketing costs.

Next, it’s time to assign specific costs to each item, even if you have to estimate. It’s important, however, to not underestimate your costs. Play it safe and overestimate when you are not sure. It is much better to have your startup costs be less in than the end, as opposed to being much more.

After factoring in your costs for starting up a new business, there are ways to lower these costs if they are too high for your budget. Consider running a home-based or online business, subcontracting workers as opposed to hiring employees, purchasing inventory upfront or purchasing surplus office furniture and equipment at a low price.

If you’ve always wanted to start your own business, but you need cash now to make it happen, Peachtree Financial Solutions can help if you’re receiving annuity payments. You can sell annuity payments for one lump sum payment and use the money you receive to get your business started. Not only are there expenses associated with the start of a new business, but until your company takes off and begins pulling in revenue, it’s important to have money on hand to take care of your bills and living expenses. Receiving cash now when you sell annuity payments can give you the money you need to start the business you’ve always dreamt of. Contact Peachtree Financial Solutions today to find out how you can sell annuity payments and receive a lump sum payment!

Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.

Tags: Business, career

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