Our Start-up costs calculator can help you decide whether your idea will make money before you invest your time and capital.
What does the start-up costs calculator do?
Most businesses start up successfully because they have sufficient cash to last until they become profitable – a mistake easily remedied with our simple start-up costs calculator.
This tool helps you determine how much money you need to start your business (initial costs and working capital) to identify if you need additional funding.
Initial costs
These costs include expenses associated with starting your business such as needing to buy equipment, vehicles, office equipment, technology and one-time costs set-up costs which can include franchise fees, rent deposits, initial lease payments, legal fees, and initial stock.
Don’t forget to include any wages and salaries you may be paying before you go live.
Working capital
You’ll most probably need some cash in the bank for several months as a float before you break-even and make a profit. This extra cash in the bank is called working capital to cover the running costs you’ll incur regardless of whether you make a sale or not.
Examples of running costs include rent, insurance, finance fees, advertising, marketing, digital, utilities (power, phone), internet services, hosting, salaries, payments and the minor monthly costs that can add up (stationary, freight, office expenses).
The start-up costs calculator prompts you to enter both initial (or capital) costs and your monthly running costs. You’ll also need to make an estimate of the time you think it will take before your business becomes profitable. This helps to calculate an estimate of the amount of cash you’ll need to cover your running costs.
Once you’ve entered your estimated costs and revenue figures, the calculator presents you with a summary estimating how much money you need to get started, how much money you’ll need to run your business monthly, and how much cash you’ll need to survive until the business becomes profitable.
Why use the start-up costs calculator?
The start-up costs calculator can save you a great deal of money and heartache if you don’t have sufficient reserves to survive the crucial start-up period. Wouldn’t you rather work it out on paper than find out the hard way?
It will also help you make your case should you seek a small business loan or a relationship with private investors.
