Business Plan Budget Tips

A business plan presents the story of how your business will launch and then operate. A budget detailing the startup expenses you will encounter must be included to show funders how their money will be spent. Here are tips on planning that budget.

Expert Overview

To start off, get a general sense of the cost categories for a startup business in your industry. To do this you should do some online research on websites for your sector which go over the expense categories. Then try to speak to experts. An entrepreneur in a non-competing market who started a similar business or someone at an industry association could be a great help in this regard. From this person you should be more interested in the range of startup costs they incurred and the general categories, rather than in their precise budget. You will have to customize your budget for your business and the market you are operating within anyway.

Example Categories

Some of the example categories for startup expenses you might encounter are licensing, insurance, and legal fees, leasehold improvements on a rental space, equipment purchases, initial inventory of products, training and education fees, and a pre-launch marketing campaign. Other categories will be specific to your type of business. For example, if you are starting a franchise, paying the franchise fee will be a significant category. Outline all of these categories on a spreadsheet to prepare to fill in estimated costs for your business.

Filling In The Details

Next you must research these expenses one by one through online searches for vendors and suppliers, as well as phone conversations when prices are not offered online. For items you will purchase repeatedly or will cost thousands of dollars, make sure to check a few sources for the right combination of price, quality, and service for you. Keep all of the details on the information you find about the services offered by companies and individuals you contact. You can use this process to gather much more than pricing information and therefore better prepare for your launch. While time consuming, there is no better way to find out the costs you will incur than speaking directly with providers you may actually use.