Are you in the planning stages of starting your own business?  Thinking of all the possibilities is exciting, but contemplating the financial cost of starting a business can be overwhelming.  Many businesses can be started on a shoestring budget, such as freelance writing or certain direct-sales programs.  But if your business plan calls for significant start-up costs, you’ll want to take some things into consideration.

First, you’ll need to guage some possible financial scenarios.  Take into account a best-case prediction of your estimated funding needs and potential profits, as well as a worst-case prediction.  This gives you an idea of the costs involved and provides you with a more realistic view of the uncertain financial times all businesses encounter in the initial phases.

You’ll also need to consider the following when assessing the start-up costs involved in your particular business venture:

1. Initial Capital - This is the upfront money needed to start your business and includes such things as supplies, inventory, advertising and marketing costs.
2. Operating Expenses - This term refers to the cost of running your business, including maintaining stock, delivery expenses, and the ongoing cost of supplies.
3. Cash Flow - Finally, you’ll need a realistic estimate of the profit you’ll bring in from your business.  Again, don’t forget to consider possible best and worst-case scenarios.

It’s advisable to assess this information for at least the first six to twelve months of your business.  Developing a forecast of the start-up costs involved and the expenses you’ll encounter, in addition to your potential profits, will allow you to provide the best possible foundation for your business.  It will also ensure that you and your family can weather the initial start-up phase of your business.  Investing in the assistance of a professional accountant may be advisable.  These financial factors are not meant to be seen as a barrier to starting the business of your dreams.  Sound financial planning in the initial phases of your business will help to make those dreams a reality!