Money! Money! Money!

Where will you get the cash to start your business? You not only need the cash to get started, but you will also need money to keep the doors open until the big bucks start rolling in. Okay, I'm making light, but the fact of the matter is, you need to be able to run your business and the expenses will either be fixed or variable. This is not including the one-time costs you will have for equipment, signage, incorporation, etc.

While identifying these costs, decide whether they are essential or optional. A realistic startup budget should only include necessities to start the business. Fixed expenses include rent, utilities, administrative costs and insurance costs. Variable expenses include inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service. The most effective way to calculate your startup costs is to use a worksheet that lists the various categories of costs (both one-time and ongoing). I know, back to the paperwork!