Whether you’re a military veteran who has just returned home from service or one who is ready to move into a new field of work, you have a lot to offer as a small business owner. The characteristics that make military veterans so valuable to our country are well-suited to entrepreneurship. These include discipline, ingenuity, and dedication.
Evaluate Your Financial Resources Before Starting a Small Business
The cost to open a new business depends on the type of business and its size. The average start-up cost for a new business is $30,000. Costs to open a service business like an accounting, graphic design or photography business average between $14,000 and $18,000. Construction businesses average $14,000 in start-up costs.
Opening up a retail business can cost between $5,000 and $32,000. Food service businesses like restaurants average $125,000 in start-up costs. An essential part of starting a business is taking a look at your existing financial resources. How much money do you have in the bank that can be used to support the start-up phase of your business?
You many need to access these funds for renting commercial space, covering utility bills, obtaining insurance, and paying employees until your business begins to generate enough revenue.
Understand the Costs of Starting a Small Business
Start-up costs are the expenses you incur before your business starts serving customers and generating revenue. Any costs related to preparing to open a business are considered start-up costs. Start-up costs include expenses and capital expenditures.
- Market Research
- Professional Services Fees (such as attorneys, accountants, or consultants)
- Legal Fees
- Staff Training
- Employee Wages
- Marketing and Advertising
- Logo Design
- Website Development
Capital Expenditures include:
Examples include operating space, products you intend to sell, cars that will be used to make deliveries, and computers you will use to manage your business.
Allocate Costs for a New Small Business
Use a spreadsheet and create a list of expenses, capital expenditures and assets. It’s okay to estimate expenses if you don’t have exact information. However, keep in mind that your small business will have one-time expenses and ongoing costs as well as fixed expenses and variable costs. Some costs, like rent, will be ongoing and fixed.
Be sure to set aside cash reserves for emergencies based on your monthly spending and revenue projections. You should be able to operate for at least three months on cash reserves.
Once you’re done, it’s time to review your spreadsheet. If your expenses are too high, you may need to reduce them by looking for money-saving alternatives.
Determining the start-up costs for your business doesn’t just help you open your doors to customers. It prepares you for a future loan application to take your enterprise to the next level.
ValueOne is dedicated to helping veterans grow successful businesses. Contact us today at 855-258-2571 and ask us about the small business funding options available to veterans.