Costs of Running the Business

What will it cost you to run your new business? In addition to the funds you need to get started, here's what you need to consider when you're figuring out how much it will cost you to keep the business afloat:

• The first 90 days— examines the business costs you can expect to incur in those first three months.
• Forecasting sales— helps you estimate how much you can expect to earn. Obviously, the more you earn, the less you'll have to pay out of your pocket to keep the business going for the critical startup period.

Work Smart As you work through these topics, don't forget that your accountant can be a great source of information for helping you make startup cost estimates. If your accountant has advised other small business startups, he or she should be able to tell you whether your estimates are on target.

Don't forget that, at the same time that your new business is incurring costs, you and your family will have living expenses to cover. Potential new business owners should consider a one- to three-year plan for family survival, at a minimum. Lack of staying power, especially in small businesses that may not generate enough cash to live on for the first year or two, is another reason that small businesses fail.