Work out your start up costs #business #utility #costs
Common costs when starting a business
On this page
- Review your business plan
- Estimate your start up costs
- Work out ongoing costs
Attend Small Business Victoria’s Starting Your Business Right workshop to step you through the process of starting a business, help you get set up right the first time and connect you to a range of government resources and free mentoring.
Three steps to work out your start up costs
Different businesses will have different set-up costs. Step through this process to work out how much it costs to start your business:
1. Review your business plan to determine your major expenses
Your business plan helps you to identify the cost items. If you are unsure of what they are, talk to others that have started a similar business and do further research on the needs of your business.
2. Estimate your start-up costs
Depending on the nature of your business, break down your costs into:
- one-off costs (establishment costs e.g. licence fees, insurance)
- cost of purchasing all necessary equipment to be used in the business over the next few years (for example assets such as equipment, tools)
- working capital, which is the money you need to set aside to cover the initial set-up stage of your business for running costs
Some common start-up costs are listed below. Bear in mind not all costs are applicable to your business and some costs can recur on a regular basis.
Common costs relating to your business premises are:
- site design/architectural plan
- basic premises modifications: electrical, lighting, painting, security system, ventilation system
- fit-out, kitchen installation, bathroom construction and plumbing (gas and water)
There are often many licences that come with starting a business. Some you should consider are:
- licences: business registration, ABN, GST, council permits etc.
- food handling certificate, Responsible Service of Alcohol (RSA) certificate
- insurance – public liability, professional indemnity, building, contents, income, WorkSafe etc.
- legal work and lawyer
- accounting work and bookkeeper/accountant
Use Australian Business Licence and Information Service (ABLIS). a one-stop application that helps you find all the local, state and federal licences, registrations and permits you need.
It’s important to factor some marketing into your plans so you can get customers to your business. Some things to consider are:
- graphic design for signage (logo etc.)
- opening marketing, including advertising
- website design, internet connection/hosting fees, domain name registration
Often, businesses will need to employ staff from the beginning, if you need staff then you should consider:
- recruitment costs
- wages and salaries
In the set up of your business, it will often be necessary to employ professional services. Some fees to consider are:
- banking or loan fees/costs
- electricity, telephone, fax, internet connection and running fees
3. Determine your running costs
Running costs can include wages, buying of stock, internet access fees, shipping/delivery fees, rent, and utilities. For this, fill out the detailed profit and loss sheet in the Financial Statements Template.
Case Study: Estimate your costs when starting a business
‘Draw up a business plan to anticipate costs, research this by talking to mentors with similar small businesses. ‘ Max Wald, Clymax