The Cost of Opening a Business
What is the cost of opening a small business is one of the most often asked questions, but it is the hardest to answer, because it very much depends on what you want to open. Here are just a few of the variables that will make the number go up or down by a huge amount:
- What kind of product/service
- What type of location
- What size staff (if any?)
- What part of the country
- What volume of business
- What seasonal variations
- What marketing is required
- Will you buy an existing business, a franchise, or start from scratch
And that list is only for starters! Actually, the last question may be the biggest variable.
It is possible in some places to buy an existing business that is closed down or barely surviving for a song, and with proper management turn it around and prosper handsomely.
On the other hand, the cost of opening a restaurant that is currently only a gleam in your eye is much, much higher. If you want to start with an empty lot and build from there, you can rarely get it done for less than several hundred thousand dollars.
There are also some common sense differences: service businesses cost less than product businesses, non-retail businesses don't have to worry about high rent lcoations, labor intensive businesses need the working capital to meet payroll for a long time before breaking even, etc. etc.
The only accurate way to judge is to start with a fairly firm idea in mind of what kind of place you want and where it will be located.
Then, you can begin comparing that with the competition that is in place to see what kind of business they do, what rent they are paying, and what other basic costs they have.
Using the Loan Success Kit spreadsheet software, you can then begin to very accurately forecast the cost of opening, running and growing the business, as well as figuring what your profits will be for all your hard work.
To read more about our kit, our guarantee, and the best small business loans software you will find, click the Home Page link and read on!