Estimating Costs
by: Matt Bacak
How much financing do you need for your company? What is the repayment period that you intend to work with? These questions need to be answered in order to determine the amount of financing to be obtained. In order to do this, you will need to know the costs incurred and the estimated revenue as well as your cash flow circumstances at least for the first few months of operations. Apart from that, you will also need to determine the amount that is needed to start your business. You will probably need to purchase assets such as equipment, furniture and remodeling costs, pay for your starting inventory, and have enough for rental and utility deposits. Furthermore, you will also need to pay for incorporation fees, insurance and licenses.
The best way to determine your start-up costs would be to obtain an estimation of these costs from vendors providing that will be selling the equipment to you. This can be done by requesting for a list of quotations and specifications to get a good gauge on the amount that you will be spending for this. The same process goes in obtaining prices for your inventory supplies. As for rental and utility deposits, you can get the help of a realtor to advise you on the amount that is required for your new premises.
It is good to know that the start-up costs for each business varies according to the nature of the business. A service-type business will naturally incur less or no inventory costs as opposed to a products-based business. Also, the business owner may decide to start on a shoestring budget and thus will just work on a low-cost basis, requiring only bare essentials during the first few months of operations.
Apart from looking at the start-up costs, operating costs at least for the first 90 days should also be budgeted. This would include variable expenditure such as rentals, salaries, commissions, utilities and inventory replenishment. It would be good as well to make an estimate on the expected revenue and collections within this period of time, and develop a 90-day budget on the cash in-flow and out-flow. It is also best to keep the estimates conservative, just in case things do not happen as planned. With a keen eye on the cash-flow, any shortfall can be detected which will determine the amount of cash financing that is required.
It is often a good idea to allow some buffer during the forecast and budgeting process for contingency purposes in case calculations were incorrect. On a personal basis, it would also be a good idea for you to estimate your personal expenses up to a period of 90 days as well, so that you'll know the costs that you need to bear during the start-up phase. This way, you will be prepared with adequate savings to support you and your family during this critical phase.
It may also be a good idea to develop a professionally-looking table or spreadsheet to highlight the details of your cost estimation. This document can then be used to accompany your proposal to lenders or venture capitalists for the purpose of obtaining financing for the business. This way, it will be easier on the decision maker to consider your application and make a decision on the approval.
Other than that, you can also make utilize the table for your own business planning purposes, or evaluation purposes after the initial 90 days of operations. This way, you will be able to make better plans for the next operating period of the business, and thus be also able to plan for the future with greater precision.
About The Author
Matt Bacak became "#1 Best Selling Author" in just a few short hours. Recent Entrepreneur Magazine?s e-Biz radio show host is turning Authors, Speakers, and Experts into Overnight Success Stories. Discover The Secrets http://promotingtips.com
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Purchase Order Financing: for Start-ups and Established Businesses
Purchase Order Financing: for Start-ups and Established Businesses
by: Donna Poisl
If you are a new business and you get a request for a huge order, it's exciting, isn't it? You start mentally adding up all the money you will make, all the supplies you can buy, all the business you can get after that.
Then when you talk to the manufacturer of the product, and discover they need partial payment before shipping, perhaps even some when you place the order and the rest on delivery, you realize you'll have to refuse the order. Since you are a new business, you don't have the credit history that will allow you to have payment terms and you don't have a bank line of credit.
If you are an established business and you get a huge order, you also might have to refuse it. You might not have a good credit history or might not have a large enough line of credit with your bank.
There is a solution, called Purchase Order Financing. If...
Purchase Order Financing: for Start-ups and Established Businesses
Financing > Purchase Order Financing: for Start-ups and Established Businesses
Buying A New Car
Buying A New Car
by: Joseph Kenny
There are many things that you must consider when buying a new car. Most will have to do with the car itself such as what model to buy, the options you want to add, and the price of the car. However, there is one thing that it always pays to check out first, and that is, who are you buying the car from.
Dealers
Perhaps more important than the car you buy, is who you buy it from, what character they have and how they do business and treat customers. No matter what kind of car you are buying, it is possible that something will go wrong and you will need to call the dealer to fix the problem for you. If the dealer is honest and puts pride into satisfying his customers, you will have your problem solved quickly and you?ll be on the road, enjoying your new car in no time. If, on the other hand, he is only interested in getting paid and wants nothing more to do with you, then you could have a serious problem...
Buying A New Car
Financing > Buying A New Car
A Mortgage Refinance with Bad Credit - The Pros and Cons
A Mortgage Refinance with Bad Credit - The Pros and Cons
by: Monique Thomas
To many, the term 'bad credit' is the end of the world when it comes to getting financing in the near future. However, it doesn't always have to be like that, you can take the bad credit mortgage refinance option!
Mortgage refinance vs. equity finance
It is essential at the outset that you understand there is a fundamental difference between mortgage refinancing and equity financing. Basically, with equity financing you are using the surplus amount you may have stored up in your property between your outstanding mortgage amount and the appraised value of your home. However a mortgage refinance is where you find a new lender willing to lend you the whole appraised value of your property, the sum of which you then use to repay your existing mortgage lender and the remaining sum you can utilize in any manner you wish. Because of this, you are faced with a different...
A Mortgage Refinance with Bad Credit - The Pros and Cons
Financing > A Mortgage Refinance with Bad Credit - The Pros and Cons
Mortgage Loans After Bankruptcy
Mortgage Loans After Bankruptcy
by: Carrie Reeder
Many people believe that once they file for bankruptcy they will have a difficult time getting a mortgage loan. However, there is still hope for being approved even with a recent bankruptcy. If you have bad credit and apply for a mortgage loan, more emphasis will be placed on your income your down payment.
Most lenders prefer to wait until two years after your bankruptcy before considering a person for a mortgage loan. After these two years, it should be relatively easy to get financing. In addition, you will probably be able to get one hundred percent financing. This will happen as long as all your payments have been reported as on time to the credit bureau since your bankruptcy.
If you want to get a mortgage loan before the two year period is finished then you will need a pretty much flawless payment history since the time you filed for bankruptcy. In addition, you will need to provide...
Mortgage Loans After Bankruptcy
Financing > Mortgage Loans After Bankruptcy