Determining a Start Up Cost

While it is really difficult to quantify the start up cost, one must really determine the cash needed to start a business. Basically, the start up costs varies depending on the stages of development. Therefore there is no really generic method in determining the start up cost. It is important to know whether you have enough money to start and sustain your business.

To estimate the start up costs, you must list and identify all the expenses in the start up level. Since you cannot identify yet the possible expenses that may incur on the operation phase, you may at least start on the visible phase. Start on the lowest level and gradually identify what are the things you may needed to start a business. Start up costs may be a one time costs or ongoing costs. These may vary from expenses for incorporating your business, utilities, inventory, insurance, etc.

Create a worksheet that lists various categories of costs. Evaluate what are the essentials and the optional. These are the necessary information you need to know prior to starting a business.

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