Shanu Singh Guliani

Startup Costs Out of Control
May 24, 2007

I was ready to dive in and start a new business—but before I jumped right in I had know how much money it would cost to get started.

As a young entrepreneur I thought I had it all figured out and came up with a ballpark estimate, unfortunately it wasn’t detailed enough to create a viable business plan and I’ve been counting dollars and cents ever since. Throughout this process, I’ve finally found hard data including solid numbers and valuable insight from a variety of sources, which I wished I had look into earlier on.

Here are five places to explore to help get your business of the ground:

1. People in the business. Entrepreneurs who own a business like the one you intend to create is an excellent resource for start-up information. Be sure not only to inquire about variable costs but an estimation of fixed costs, because a start-up company needs to save as much money as it can for those “rainy days at the very beginning.”
2. Shop your competitors. If it’s a retail business you wish to open don’t forget to see what your competitors have that you might need right away, inventory that might set you apart, or design aspects of the store that might separate you from traditional retailers in your industry. These costs might be crucial to the success of your new start-up and might force you to spend less somewhere else.
3. Manufactures and Suppliers. Your manufactures and suppliers are another great source for financial information…they want your business to succeed because only then will they succeed. Ask various suppliers about equipment leasing, bulk-buying discounts, credit terms, start-up inventory packages and other options that might lower your upfront costs.
4. Trade Associations. Most trade associations will give you the names and numbers of successful veterans in your industry. Members of these trade associations tend to contribute viable information such as start-up cost worksheets, financial statements, manufactures with whom they’ve had success, companies they’ve purchased equipment from, surveys in relation to their target markets, and other useful information.
5. Franchise organizations. If you’re thinking about buying a franchise, the franchisor will give you lots of data about start-up costs. Remember costs can vary based on differing locations.

A single source won’t be enough to reveal all the facts you need to figure out the precise costs of starting your new venture. Good research can help to determine whether your business idea is financially viable and suggest ways to boost your chances of success.

Posted by Shanu Singh Guliani on May 24, 2007 | Comments (0)