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Establishing Budget

In order to estimate necessary and suitable costs prior to start-up, you must work out an establishing budget.

How big the establishing costs get depends on what kind of company you want to start.

Small investment

If you want to start a consultancy firm working in human resource development you might only need a telephone, a computer and education/skills in human resources. You probably have the education/skills and if you start the business from home; the only expenses you need to start is a PC and a telephone. The start will then be rather inexpensive.

Large investment

On the other hand if you want to start a production making electronic devices your establishing budget will be high. Before you can start selling your electronic devices you need a production building, machinery, packing facilities, skilled staff, a stock of electric components, office equipment and...this may cost millions.

What expenses do you meet?

Below you find some of the most usual expenses when starting a business. In your business plan you delete the ones you do not encounter in your new company.

  • Remember: The less expenses the better. All expenses have to be paid from the profit in your new business.

Expenses in an establishing budget

Premises

  • Rent
  • Deposit for purchase of premises or business
  • Deposit (e.g. 3 months rent)
  • Goodwill - payment to the former owner for his work at the premises
  • Furnishing and renovation

Production equipment

  • Machinery
  • Tools
  • Other things

Shop fittings

  • Cash register
  • Counter
  • Other things

Office fittings

  • Furniture (desk, swivel chair, shelves etc.)
  • Computer (printer, network)
  • Telephone
  • Fax machine
  • Copying machine
  • Other things:

Purchase before start

  • Raw materials/semi manufactured
  • Manufactured goods (stock)
  • Stationery
  • Other things:

Car

  • Deposit
  • Other acquisition costs

Counsellors

  • Lawyer
  • Accountant
  • Other

Marketing

  • Writing paper, business cards
  • Brochures
  • Advertisement
  • Website
  • Opening reception
  • Other things

Other expenses

  • Application for a patent/registration
  • Other things

Registering establishing costs

All the costs you get in the establishing budget will at a later stage be transferred to your operating budget. Bigger investments will be transferred to the company´s balance sheet.

The establishing budget is a snapshot of the cost you get before you can start operating your company.

- Download a Establishing Budget from Shop & Downloadcenter
- Go to Operating Budget - an Explanation
- Calculate your needed turnover and sales - easy online tool


He knows not his own strength that hath not met adversity.
- Ben Jonson, born 1573

Business Plan Budgets
Operating Budget
Establishing Budget
Example of an Operating Budget
Cash Flow Budget - inspiring template to download
Contribution Margin - Example
Calculate turnover and sales
Personal Source of Financing
Be sure to have Sufficient Cash
Financing Business Start
Sourcing from Banks
Investors and Others
Funding Capital
Organising the Company
Your Product / Service
Financing Start-up
Sales and Marketing
The Person Behind
Entrepreneurship Education