Technological expenses include the cost of a website, information systems, and software (including accounting and payroll software) for a business.
Some small business owners choose to outsource these functions to other companies to save on payroll and benefits.
Underestimating expenses will falsely increase expected net profit, a situation that does not bode well for any small business owner.
Startup costs are the expenses incurred during the process of creating a new business.
Essential to the startup effort is the creation of a business plan—a detailed map of the new business to be created.
A business plan forces consideration of the different startup costs for the business.
Usually, equity financing entails the issuance of stocks, but this does not apply to most small businesses, which are proprietorships.
For small business owners, the most likely source of financing is debt in the form of a small business loan. Like any other loan, business loans are accompanied by interest payments.
Many new businesses neglect this process, relying instead on a flood of customers to keep the operation afloat, usually with abysmal results.
In this article, we'll look at how to estimate your startup costs and plan ahead to position yourself for success.