Startup Costs – For Starting Your Business o

Startup Costs – For Starting Your Business or Franchise – Vary By Business Model | Joe Barone

  • 22 Oct 2016
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Joe BaroneWhen starting any business including franchise models, buying an existing business or starting your own business – you will have specific startup costs based on the model.

In franchising, startup costs are itemized in the FDD (Franchise Disclosure Document). When developing your own business model – your startup costs should be outlined in your Business Plan.

Your startup costs should include the following:

1. Cost of market research
2. Product development
3. Marketing
4. Software development/acquisition (website/back office/etc.)
5. Training / ongoing mentorship / employee training
6. Accountant / lawyer / marketing professionals
7. Fixed assets required for the business
8. Lease and build out for the business location
9. Working capital to pay the bills during startup
10. Personal expenses
11. Business and corporate licenses
12. Franchise and business licensing fees, etc.

This may not be the complete list – but you get the idea.

With a franchise organization – research, product development, technology development, training and marketing are leveraged as part of the franchise fee.

For the independent – you are on your own to develop the infrastructure.

In either case, the business model will dictate the types of assets required.

Here are some examples

1. Home based business – minimal equipment and fixed assets – marketing and product development required

2. Mobile business – can be started from home – but will require additional equipment to provide the service (i.e. vehicle lease / equipment / inventory / small team)

3. Light industrial – all of the above – plus a lease in a lower cost commercial building / expensive equipment

4. Retail business – all of the above – plus additional equipment / furniture and fixtures / inventory / larger team

These are the basics – if taking control and self-employment is a path you are considering – don’t go it alone. There are resources and professionals that can assist.

Original article publishedPublished on May 31, 2016 on LinkedIn.

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