We're going to cover that in this article.



Determine Startup Costs

So let's say that, after analyzing the market, you come to the conclusion that your idea will sell like hotcakes. But perhaps one factor that is standing in your way is high start-up costs.

Start-up costs include things like paying for a place to work out of, buying all the initial equipment, furniture, and tools necessary for the business to operate, possibly legal fees and consultation fees, licensing fees, communication fees for telephone and Internet services, taxes, buying raw materials if you plan to manufacture a product, and marketing your new business venture. When you start adding it all up, it can become a little daunting.

At this point you might need to ask yourself if there is some way that you can maintain the quality of your potential service or product, yet cut some of the initial costs to start. This is when creativity will come into play. Anyone who is rich can throw money at a problem, but if you have a lack of funds, this will be the impetus you will need to get creative and find other solutions. (Not to mention that people pay big money for creative ideas that lead to solutions to problems--that can be a business in and of itself, if you have a talent for it!) All viable businesses provide a solution to a client or customer's problems. So, by thinking along these lines from the start, you will be helping yourself greatly in the process.

One way to cut costs is to start small. Can you work out of a room in your home, or a garage? You can avoid renting an office or workspace for a while until you start making money, which can help lower initial costs. You might not ever need a brick and mortar office if you start an online business or store. Get creative and consider as many possibilities and options as you can so your business idea will work.

Another method you can try is to figure out a way to do the work by yourself in the beginning. This is not a bad way to start, because you will want to know every aspect of how your business runs, so you will want to work every job yourself to see where all the strengths are, and where you can improve on any weak areas. This can give you vital information you will need to potentially lower costs, improve productivity and increase the amount of money you can make. Then, when you start making money you can hire some employees to help you. It will also make it easier when you have to train employees, because you will understand all the requirements of every job your business must perform to stay in business and how they interact with each other, because you will have worked them all yourself.

Be certain to keep an open mind during the business planning and start-up cost phase. Keep talking to other small business people or a mentor who might have suggestions for starting small and less expensively. Also remember that the start-up costs will be offset by the revenue that your business will generate, so over time you will break even and then begin to make money from the business.

You now know that you need to determine the startup costs so that you can decide which grants you should apply for to meet that start up cost.