Section VII – Start Up Expenses & Funding
Laura Guillaume
Section VII – Start Up Expenses & Funding
Startup expenses occur before you even begin operating your business. A startup should estimate these expenses thoroughly in order to estimate sufficient investment requirements. Take time to estimate these and perform thorough research. The more effort you put into this the less chance you will have of overlooking critical expenses or underestimating them. Make sure you add in a contingency or padding factor to cover for any unknowns.
Startup Expenses
- One-time Expenses – expenses incurred at time of start-up that are a one-time event.
- Property
- Location Build-out expenses
- Licenses/Permits
- Start-up Professional Services fees
- Equipment
- On-going Expenses – expenses incurred that are ongoing throughout the operation of the business.
- Locations expenses (rent, utilities, insurance, etc.)
- Professional Services fees (accounting, legal, technology, other)
- Salaries
- Sales / Marketing expenses
- Travel/Entertainment expenses
- Administrative expenses (office supplies. postage, etc.)
- Miscellaneous expenses (repairs, cleaning, maintenance, etc.)
- Loan or Credit Card payments
- Other expenses
Sources of Capital
- Investors
- Loans
- Personal Savings
- Credit cards
- Other sources (crowdfunding, donations, grants, etc.)
Funding is a way to raise money for your business. There are primarily two means in which to obtain funding for the business. You can get funding through offering an equity position in the business, meaning offering a piece of the business in lieu for funds or as debt by taking the funds with a promise of repayment over a specified time and interest rate.
Funding
- Equity Capital
- Angel Investor
- Venture Capitalist
- Crowdfunding
- Friends and Family
- Debt Funding
- Bank Loans
- SBA Loan programs
- Friends and Family
- Credit Cards