Before a new business can open, I believe you first must sit down and create a detailed log of your expenses, both start-up and operating, so that you can see exactly what you should expect in the way of outgoing money for the first few months.
I have been working on a spreadsheet like this for quite some time, but now that the business is about to open, I am trying to finish it up. It is amazing that just when you think you´ve listed every possible cost, a new one comes along. I have mentioned in previous blogs that I didn´t account for advertising costs in the beginning. Such a large part of opening a business, and yet I hadn´t factored that into my costs.
For the next few posts I thought that I would go over the information that should be found in a detailed log before opening your business. This way as you sit down and figure out your operating and start-up costs, you can have a general guideline to go by. Today I will discuss the things you need to consider as you being to set up your spreadsheet or log.
First, what type of program or method do you want to use? I prefer to use Excel, since I can set up formulas that will calculate various operations. I don´t know it well, but my husband does, and so I rely on him for help when I need it. You can also create a chart in Word and fill this in, though you will have to continuously add and delete rows and columns and you will also have to add them up on your own (though this really isn´t that hard if you have a calculator). You might also decide to write this all out in a notebook format. If so consider using one page for operating expenses and one for start up, so you have plenty of room to make changes as needed.
You business may require unique items that are not included in other spreadsheets. For instance, if you are running a product-based business, you will need to include information on purchasing materials to make the product and also materials to pack and ship the products. If you are running a service-oriented business, however, you will not have these costs factored into your spreadsheet.
Along those same lines, if you are operating a business out of a leased space you will have added expenses that you might not have with a home-based business. Some home-based business owners need to rent storage spaces in which to hold supplies and materials. I do not have to do this, since my supplies and materials will be housed with my seamstress. You might need to do this, though, and so including this category on your spreadsheet might be important.
Friday´s post will focus on the start-up cost side of opening a business. Until then, consider some of the costs associated with your business. Also, if you are interested in learning more about Excel, check out this tutorial http://www.usd.edu/trio/tut/excel/index.html