Every year in the United States, approximately 400,000 businesses are started; unfortunately, statistics from the Small Business Administration indicate that around half of these businesses won’t be trading five years after their launch.
One of the common reasons a business won’t survive in the long run is a lack of planning at the outset. Without comprehensive planning and a thorough projection of costs, the business is likely to struggle.
Calculating the startup costs for a business is one of the most important things a prospective new business owner should be doing – yet it is also one of the hardest tasks, given the number of variables in play.
A startup calculator to help estimate your first-year costs
The calculator allows you to pick the size of your business based on your initial budget (bootstrap, medium or large) and then provides space for costs in six broad sections:
- Pre-trading (e.g. initial costs for articles of incorporation)
- Administration (e.g. bookkeeping, accounting, insurance)
- Marketing (e.g. market research, advertising, promotion)
- Operations (e.g. starting inventory, materials, telephone/Internet)
- People (e.g. salaried employees, contractors)
- Space (e.g. rental charges, office space)
There is also the option to include additional costs (such as contingency funds) by selecting the optional costs available in each category.
The calculator can be saved so you can research the specific costs for your business, and then return to it at a later date.
Templates for popular startup industries
CardConnect have also produced individual guides for some of the most popular startup industries, each with a template to a pre-set startup cost calculator:
- Coffee Shop Startup Costs
- Restaurant Startup Costs
- eCommerce Startup Costs
- Salon Startup Costs
- Food Truck Startup Costs
- Retail Startup Costs
Of course, to get a wholly accurate picture of your startup expenses, you’ll need to do some research for your specific state/location.
The importance of calculating startup costs
With the competitive environment of today’s business world, planning your initial costs is one of the first steps in assessing the viability of your startup.
The work you put into the planning phase of your business – from writing a business plan to choosing the right marketing strategy, all the way through to assessing payment solutions – will inevitably reap rewards as your business grows. The startup calculator can help you understand your initial costs and help to inform your business plan.