In the US, most costs are about $3K – 4K, according to the U.S. Small Business Administration, while most home-based franchises cost are around $2K to $5K. One good rule of thumb for budding entrepreneurs is to make sure that they must have at least 6 months of start-up costs on hand.
Prospective startup owners should plan in detail before they start a small business. The best approach for them is to test their ideas in a small and inexpensive way. This gives a good indication of whether the potential customers want this product and how much they're willing to pay for it.
Here is a list that is common for all start-ups. New business owners must ensure to add other expenses that are unique to their businesses:
o Office space
o Equipment and supplies
o Communications
o Utilities
o Insurance
o Lawyer and accountant
o Inventory
o Employee salaries including those for the founders/owners
o Advertising and marketing
o Market research
o Printed marketing materials
o Making a website
In net, startup costs are expenses that should be thought of in detail. I strongly recommend that the budding entrepreneurs must be generous and overbudgeting for them. Because in every business, there will be unexpected/unforeseen costs. Underestimating these will falsely increase profit projections.
Let us keep in mind that starting a new business takes more than a name or a brand. It requires careful budgeting and a flawless financial plan. Miscalculating funding is the main reason many businesses fail.
