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Start Your Business Startup Funding

Estimating Startup Costs: New Tool Shows You How

Estimating Startup Costs: New Tool Shows You How
Credit: Romrf/Shutterstock

One of the more challenging parts of starting a business is figuring out how much money it's going to take to get the company up and running.

To help entrepreneurs get an accurate picture of these costs, Intuit Quickbooks has unveiled its new Startup Financial Planner. The free tool lets entrepreneurs and would-be business owners eliminate some guesswork and calculate the true cost of starting their companies. 

With the tool, users select their states; industries; business settings, such as office or home-based; legal structure, such as sole proprietorship or Limited Liability Company (LLC); and the projected number of employees in the first year. The tool then asks users to estimate some of their revenue. This includes how much income they expect to earn from physical products or services in their first month of operation and how much income they expect to earn from any business capital they have in an interest-earning bank account. It also asks for some growth projections over the first year.

The tool then walks business owners through some of their expected costs for licenses, setting up an office and payroll. It also asks what they expect to spend on some of their monthly expenses, such as advertising, rent, office supplies and utilities. 

Some fields include pre-populated values, giving entrepreneurs the option to either enter the suggested value or overwrite the field with data that better represents their specific businesses.

Once they work their way through all of the tool's questions, entrepreneurs are provided with:

  • Downloadable financial analysis
  • A calculation of first-year expenses, including startup costs
  • A projected break-even point, which shows business owners when they can expect to start turning a profit
  • Business-trend comparison based on real data from similar similar small businesses

In order to get the most-accurate results, would-be-business owners will need a few things before getting started:

  • Licensing and permit requirements: What are the costs of the licenses and permits you'll need for compliance with federal law, local governance and industry regulations?
  • Taxes: What is your company's expected tax burden based on anticipated revenue during the first year of operation?
  • Business insurance: What types of business insurance are required for your business, and what is the approximate cost for this coverage?

Users have the option of completing the information in one sitting, or if they don't have all of the info needed, they can get a unique user ID and return to the planner as many times as needed.

The planner also includes a variety of support resources to help entrepreneurs better understand some business costs.

Chad  Brooks
Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.

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