How do I calculate startup cost?

This question focuses on methods to understand the need for starting capital (amount of money to start the business and short term operations).

Needs Assessment

• The key to a successful business is preparation. Before your business opens its doors, you’ll have bills to pay. Understanding your expenses will help you launch successfully.^[1]

• Calculating startup costs helps you:^[2]
  • Estimate profits
  • Do a breakeven analysis
  • Secure loans
  • Attract investors
  • Save money with tax deductions

• How do I forecast sales?
• Depending on the business type, you may need to factor in licensing/permit and insurance costs.

Process to refine the Question:

• Startup cost are distinct for each of these types of businesses:
  • Brick and mortar
  • Online
  • Service

• Element of costs:
  • Fixed Cost
  • Variable Cost

Difficulties often encountered

• Startup cost are often tied to type of market segment you are reaching for (i.e. high-end product usually will have high fixed and variable cost)

Resources and Next Steps:

Catalog / Guide Documents

• SBA Break-Even Analysis Tool
• SBA Startup Cost Worksheet

People and Organizations

Business Support Organizations

• U.S. Small Business Administration|SBA
• Resource:PG County Small Business Development Center (SBDC)
• Resource:Hispanic Business Center
• Resource:PG County Economic Development Corporation
• SCORE Mentor Services