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How to Organize Your Small Business Startup Costs

How to Organize Your Small Business Startup Costs

Published: August 30, 2016

Launching or transitioning your side job into a full-time venture is stressful, demanding and exciting. One of the first steps is to consider your startup costs, or expenses in the beginning phases of entrepreneurship.

Startup costs will vary from industry to industry and may fluctuate during different seasons within any given year, but particularly the first few years of operation. Think about some of these questions:

Do I have enough capital or other resources to maintain a living? Do you have marketing materials? Should I invest in training programs or professional conferences? Is a lawyer necessary? What are my liabilities? Are my contracts protecting my business and assets? Should I hire staff or do all the work myself?

These type of questions and this line of thinking is good to establish early on to avoid messy financial situations. To keep yourself accountable and organized, place startup costs in categories included but not limited to the following list:

Legal/Paperwork– lawyer meetings and fees, business certificates and related documents

Taxes and any documents related to business-generated income as well as 1099 or similar forms from contracted workers and employees

Professional Development & Education like conferences, trainings, certificate programs

Transportation costs like traveling via train, plane, or cab as well as parking fees.

Equipment like office furniture, trucks, vans, real estate, phones, etc.

Marketing materials such as business cards, website(s), social media management, etc.

Miscellaneous items like business clothing, paying for lunch or dinner meetings, etc.

By listing groups of related business activities and then categorizing them, you can begin to shape the areas in which you need to prioritize your finances, save for a rainy day or completely eliminate or postpone costly expenditures.

For example, if your business focuses on providing creative services like web development, you will need to strategize on what resources you need upfront to complete the job as well as how to minimize expenses to keep more money in your pocket. Unforeseen situations like website or server crashes or hiring additional staff can hurt your income projections but preparing in advance with either a business savings account or itemizing potential expenses, that includes unexpected issues, can alleviate stress and help create efficient systems.

Instead of waiting to cover costs later or jumping into projects without thinking through the financial implications. Entrepreneurship is an ongoing learning experience and journey that involves successes and failures from the very start.“If you fail to plan, you are planning to fail”, a quote attributed to Benjamin Franklin that still rings particularly true for small business owners.

About the Author:

Ijeoma S. Nwatu
Ijeoma S. Nwatu
Ijeoma S. Nwatu is a digital strategy and communications consultant. She is the Communications Manager for ColorComm, an organization that aims to uplift women of color in the communications field. When not working with clients, Ijeoma can be found speaking about career transitioning and social media marketing. Follow her on Twitter: @ijeomasnwatu.