FIGURING YOUR
NUMBERS
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Figuring your expenses - do this first !!
Most people start out by figuring their income. We think
that is a big mistake. Start out with what it is going to
cost you to be in business. Include everything.
Salary -- Can you afford to work without a
salary? If not, how much do you NEED to get by? If your
business plan depends on you making $400 a month and you
need $1,000 a month just to keep the lights on, pay the
rent and feed your family, your plan is going to fail.
Rent -- Do you have to pay rent? If you
are planning on having a grocery store, a bed and breakfast
or a gift shop, you probably need to have it somewhere and
pay rent. If you are planning on opening a consulting
company, running a business as a fishing guide or
developing websites you might be able to do that out of
your home. We say "might". Where are you going to meet with
customers? In your living room?
Equipment -- Put down everything you will
need here. For a store, you probably need display cases, a
cash register or computer. Maybe you want to sell on eBay.
You still need a computer, some kind of software for email,
probably something for web design.
Supplies -- if you have to spend money on
it, count it. You need to clean your store. Include
cleaning supplies - paper towels, soap. You may need to
print out flyers to advertise your business. Include the
cost of paper and printer cartridges. If you are fishing
guide, include the cost of bait, gas for your boat.
Other -- if you run a store, a big item
here is inventory. If you are a consultant, travel may be a
big expense to drive to your customers' offices around the
state and for hotel expenses.
Services and fees -- You definitely will
need an accountant to help you with business taxes. You
need to pay for a business license. You probably need
insurance. Don't even think about not paying your corporate
taxes!