29 min
Start Up Costs | The Making Business Fun Podcast Episode #105 The Making Business Fun Podcast
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- Entrepreneurship
Pop quiz: How much money do you need to have on hand to start your business?? If you don't know, then this episode is for you. There's also a really cool spreadsheet that goes with this episode ... you can get it at www.ericgoeres.com/resources.
Today, we are going to take a look at two very specific sets of numbers. First, we are going to take a look at the costs to start your business. These are, the costs, the money you must spend, to get your doors open.
Hey listeners: Be sure to check out and bookmark The Making Business Fun Podcast Blog at https://www.ericgoeres.com/the-making-business-fun-podcast-blog.
If you would like to work with Eric Goeres as a coach, head to www.ericgoeres.com.
And don't forget to subscribe. :)
The second set of numbers that we are going to look at, is the monthly operational costs — overhead — and your sales break even point. That is, how much of your stuff you need to sell every day, week or month, to be profitable. Being profitable, of course, has a direct effect on how long you stay in business. Generally speaking, businesses that make lots of profit stick around for a long time, and businesses that don’t make profit don’t last that long.
**The Process**
As was almost everything in business, there is a process. So often, those who are not familiar with running a small business, think that running a small business is some combination of a magic trick and dumb fool luck. That's not the case, at all. These are typically the same people that assume an airplane pilot is constantly upfront juggling levers, paddles, steering wheels, and buttons, in a chaotic frenzy, to keep the plane in the air. Nothing could be further from the truth. In fact, almost all aspects of the business, can be boiled down to some very simple rules, processes, and tasks, that when executed in the proper way, and in the proper order, will lead to a well running, well organized, well understood, profitable and fun business to run.
Are process here is very simple, and a fast four steps. I'll run through them very quickly now. Step one, we add up all the start up expenses. Step two, we add up all of the assets that you will need to purchase to get your doors open. Step three, we are going to add up your ongoing monthly expenses — otherwise known as overhead. And then finally, step four, we are going to calculate the amount of sales revenue that you must exceed to keep the doors open. Otherwise known as, your break even point.
The first set of dollars and cents that we are going to concern ourselves with are the dollar costs required to get the doors open. These costs fall into two clear categories. The first category is start up **expenses**, and the second category is **assets** to purchase. Start up expenses, assets to purchase.
Operating expenses are the expenses required to, imagine this, operate the business. Before now, all of our costs have been one-time start-up expenses. These monthly expenses are recurring expenses — month after month, for the life of your business. Like rent, is a good example. There are basically five quick categories of operating expenses, and they are: facilities, personnel, what I call moving and shaking, operations, and or old pal, miscellaneous.
Pop quiz: How much money do you need to have on hand to start your business?? If you don't know, then this episode is for you. There's also a really cool spreadsheet that goes with this episode ... you can get it at www.ericgoeres.com/resources.
Today, we are going to take a look at two very specific sets of numbers. First, we are going to take a look at the costs to start your business. These are, the costs, the money you must spend, to get your doors open.
Hey listeners: Be sure to check out and bookmark The Making Business Fun Podcast Blog at https://www.ericgoeres.com/the-making-business-fun-podcast-blog.
If you would like to work with Eric Goeres as a coach, head to www.ericgoeres.com.
And don't forget to subscribe. :)
The second set of numbers that we are going to look at, is the monthly operational costs — overhead — and your sales break even point. That is, how much of your stuff you need to sell every day, week or month, to be profitable. Being profitable, of course, has a direct effect on how long you stay in business. Generally speaking, businesses that make lots of profit stick around for a long time, and businesses that don’t make profit don’t last that long.
**The Process**
As was almost everything in business, there is a process. So often, those who are not familiar with running a small business, think that running a small business is some combination of a magic trick and dumb fool luck. That's not the case, at all. These are typically the same people that assume an airplane pilot is constantly upfront juggling levers, paddles, steering wheels, and buttons, in a chaotic frenzy, to keep the plane in the air. Nothing could be further from the truth. In fact, almost all aspects of the business, can be boiled down to some very simple rules, processes, and tasks, that when executed in the proper way, and in the proper order, will lead to a well running, well organized, well understood, profitable and fun business to run.
Are process here is very simple, and a fast four steps. I'll run through them very quickly now. Step one, we add up all the start up expenses. Step two, we add up all of the assets that you will need to purchase to get your doors open. Step three, we are going to add up your ongoing monthly expenses — otherwise known as overhead. And then finally, step four, we are going to calculate the amount of sales revenue that you must exceed to keep the doors open. Otherwise known as, your break even point.
The first set of dollars and cents that we are going to concern ourselves with are the dollar costs required to get the doors open. These costs fall into two clear categories. The first category is start up **expenses**, and the second category is **assets** to purchase. Start up expenses, assets to purchase.
Operating expenses are the expenses required to, imagine this, operate the business. Before now, all of our costs have been one-time start-up expenses. These monthly expenses are recurring expenses — month after month, for the life of your business. Like rent, is a good example. There are basically five quick categories of operating expenses, and they are: facilities, personnel, what I call moving and shaking, operations, and or old pal, miscellaneous.
29 min