In the last edition of the Starting a Small Business Series we talked about how to cost out the capital requirements for your business.
Now we need to figure out some other cost of running your business. The first cost you are going to get is rent. You should have a pretty good idea of what kind of facility you’re going to need whether it is a home office, store, industrial, etc. To get estimated rent cost you can check your newspaper, local business journal or call a commercial realtor to get some estimates. Some realtors can be real jerks but remember you are going to be in the market so find one that is nice and seem like you can work with. Just let them know that you are getting an idea for your business plan and will talk to him or her when you are ready to go.
Next estimate a phone bill. These days you can use the phone company’s website to estimate the cost of phone service. The variable will be if you have to pay per call like some places in the Midwest, the cost of long distance service, and the number of 800 call you will get if you decided to get an 800-number which I recommend.
Another factor to consider is electricity. One way to estimate the cost of electricity is to check with the power company. If you already have a specific building in mind they can tell you what the power cost was for the building for the past year. Otherwise talk to your real estate friend from above and get an address of a building you can use of an estimate and get it that way.
Other cost you need to is garbage, water, and any other incidentals to running the business.
Next week we will talk more about the financial statements