Many businesses fail because they don’t have
sufficient cash to last until they become profitable
– a mistake easily remedied with our simple start-up
costs calculator.
What does the start-up costs calculator do?
The start-up costs calculator can help you decide how
much money you’ll need to have before you start up your
new business.
This tool addresses two key financial needs that must be
examined to make the smartest business decision:
Initial costs
Running costs
Tallying costs
All start-ups have start-up costs, followed by running
costs. Your initial costs include expenses associated
with starting your business such as:
Equipment and assets – such as vehicles and furniture
Office equipment – such as computers, telephone
systems, copiers and water coolers
One-time costs – such as franchise fees, rent deposit,
initial lease payments, legal fees and initial stock
While these costs won’t necessarily repeat in the near
future, your business will incur other operational costs
on an ongoing basis. Your running costs are those that
you’ll incur regardless of whether you make a sale.
Examples of running costs:
Rent
Insurance
Advertising
Utilities
Phone and internet services
Salary and payments to subcontractors
Postage
The start-up costs calculator prompts you to enter both
initial (or capital) costs and your monthly running costs.
You’ll also need to estimate the time you think it will take
for your business to become profitable. This helps you
calculate an estimate of the amount of cash you’ll need
to cover your running costs.
Once you’ve entered your estimated costs and revenue
figures, the calculator will present you with a summary
estimating how much money you’ll need to get started,
how much money you’ll need to run your business on a
monthly basis, and how much cash you’ll need to survive
until the business becomes profitable.
Why use the start-up costs calculator?
The start-up costs calculator can save you a great deal
of money and heartache if you don’t have sufficient
reserves to survive the crucial start-up period.
Wouldn’t you rather work it out on paper than find
out the hard way?
It will also help you make your case should you seek
a small business loan or a relationship with private
investors.
Start-up costs calculator
This information provided here is general information only and is not intended as legal, financial or other professional advice. A professional advisor should be
consulted regarding your specific situation. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be
regarded as a complete analysis of the subjects discussed.
® / ™ Trademark(s) of Royal Bank of Canada.
VPS101904 118592 (12/2018)
