Most of new entrepreneurs just pull a number out of thin air when it comes to estimating how much money they’ll need to start a business. It is actually a science. You have to put together a real budget with real numbers so when you start the process you know exactly what you need for your business startup. Below are some of the possible start up costs you should consider:

- Capital Improvements. The cost of transforming your leased space from what it is now to what you want and need it to be. Get quotes. Keep on budget. Overruns will haunt you.
- Rent. This includes the first and last month’s rent. The last month is a deposit but it still hurts your cash flow.
- Utilities. The local companies want their “pound of flesh”. They want to make sure there is a deposit sufficient to cover the potential highest month of charges.
- Staff Training. You have to allow enough time and money to cover wages for the training. This is an investment and not an expense, but it still costs you money. You have to be ready to open.
- Opening Inventories. Your first orders are going to come in COD so you have to set aside cash to cover those expenses.
- Working Capital. If you have completed a solid financial forecast, you’ll know beforehand what money you’ll require to get through the first months.
- Marketing. You have to let people know you are opening for business. Grand Opening? I suggest that you don’t have one until you are ready. You probably won’t be ready for such a major event; so avoid it for now. Have it later if at all.
- Contingency. Set aside some cash for things that you didn’t account for. They can be quite a shock to the bank account.

It is important that you go through this process when you are starting a small business. And before you open you are playing in the “watch the budget” game. If your renovator wants to make changes that cost you additional money, say no unless you can cut back somewhere else.

It is so important that you have a very good handle on your opening expenses in your small business. If you are a demon with your numbers before you open, you will remain that way throughout your business life. That will be good for you and your business.