How do you estimate your startup costs and break-even point?

That's why PlanMagic offers its Business Toolbox. Whichever program you choose (depending on business type), the financial model will do all that (and even 100% correct unlike most competitive products!), and a whole lot more.

I would also reach out to company’s like MRGN to assist. 90%+ of small businesses fail within 2 years because they do not fully understand the finances needed. For full disclosure I am a board member of MRGN

That is why NOBOSS Workshops is ideal for new entrepreneurs. It addresses the key reasons for business failure as it guides you through the business startup process. Startup costs and capital are at the top of the list for business failure.

I have witnessed many entrepreneurs/start-ups who have failed to understand the broad idea of start-up costs. They are not just costs that you have already incurred but also are the ones that you are likely to incur as you inch closer to the launch of your product/service or start of operations. An entrepreneur/start-up must never err in thinking that start-up costs are only one-time costs such as business registration fees or expenses towards permits/licences. They can also be ongoing expenses such as rent & utilities, payments to consultants, inventory, marketing expenses, legal & accounting expenses as well leading up to the launch date. Defining such costs accordingly and then running your calculations is the key!

Given that very few, if any businesses, open the doors and immediately start generating revenue your start up finance requirements need to include all the expenses you will incur for the first months of operation. And make sure to include things like domain names (and to secure these early on potentially even before you start the business) and business software. When will you invest in accounting software for example? If you are in the UK will you need to register with the Information Commissioners? These might be small amounts of money but can add up to more than you think

Understanding your break even is critical. Equally important is to understand the ramp up expenses to help your actually grow the business.

And you can't do this calculation unless you have clarity on your target market, the offerings and offers you will be selling (products or services) so that you know what the price of a 'unit' is.

You can get this info also (and a lot more!) in any of the business planner programs in the PlanMagic Business Toolbox. Oh yeah!

Break even point gives you an indication of the viability and sustainability of your business. It helps you forecast the financial performance of your startup while budgeting for working capital. Break even point also helps you plan your business expansion accordingly.

PlanMagic financial models calculate this for you in great detail. Even per product line. The P&L worksheets offers the choice to set fixed or variable cost for each expense.

And you need to factor in your capacity. It is all very well assuming you can sell 100 'units' of whatever it is you sell but if marketing, delivery and servicing customers takes more than 140 hours then you have a capacity problem

This is essential. Sadly today this is very burdensome for small businesses who most likely got involved to sells their goods and not to manage reams of spreadsheets. Again companies like MRGN are invaluable.

I hate to repeat myself, but you can get this info also (and a lot more!) in any of the business planner programs in the PlanMagic Business Toolbox. Oh yeah!

As you might already expect each of the PlanMagic financial models have a detailed sensitivity worksheet that you use at anytime.

Today this is a time consuming activity that is crippling for small businesses with limited financial resources.That stated, scenario planning is a must do activity.

Use a SWOT to look at opportunities and threats and weaknesses and use this to decide on various scenarios. It is a quick way of getting some insights

Scenario planning is fundamental for every business and needs to be very realistic, otherwise the result could be dangerous. In addition, external economic and market data must be taken into account for all scenarios.

Yes, I agree with Des. Fortunately, PlanMagic Financial Models are an affordable solution for small to medium sized businesses. The scenario tools are simple to use, and do not require all the issues per scenario as described by Des. After all, a small business is not a multinational with thousands of people and multiple locations around the globe.

Scenario planning is very key towards undertaking business continuity planning. The economic and business dynamics are constantly evolving therefore founders need to anticipate the scenarios while developing mitigation strategies.

Knowing where you are cash flow wise is critical. Various apps are available and again why company’s like MRGN can be essential- and make the difference between thriving vs surviving.

The balance sheet is important towards identifying the financial position of your business. Cashflow statements are key indicators of how your transactions flow and gives a true picture of the financial performance of the business beyond the revenue. This is because it factors in cash transactions and sales as opposed to credit sales.

Start with your cashflow for the first 12 months. If that isn't viable the income statement and balance sheet for 2 to 5 years are moot! If projecting out that far then you need to document a list of working assumptions. Assuming a growth rate of 5%? What is that based on? What is assumed? What happens if that isn't achieved?

Our financial models help you to visualize your current financial position and predict future financial performance. You should be using PlanMagic's unique professional financial models at all times. They are made for all your financial planning and monitoring needs. Reduce the risk of how certain courses of action can affect your financial situation. Don't take action without knowing the outcome of such action. Make time to use modelling when you're about to make a big decision! Our financial models are unique and you don't need to install anything. Just download the financial model file, open it with MS Excel and enter your registered email address and license ID to unlock the workbook.

In my experience, for any start-up, identifying the ideal and required start-up costs, projecting inflows conservatively and factoring in outflows liberally is an intelligent way of understanding how financially viable your business would be. Doesn't matter if you take a 12-month or even a 60-month projection period. And the key here is always to list out every plausible assumption that any potential investor or prospective banker would latch onto. Picking your rate of growth carefully would depend on how well researched you are about the industry. Showing 1x or 2x growth would augur well only if it is in line with the present market trend. It is also important to remember that every investor/banker views risk and reward differently!

Shall I repeat myself? No, I think y'all got the point. But I do need a minimum of 55 characters. Don't know why, but oh well, here they are -:)

Again quick books and excel can help but are cumbersome and are stand alone work predicts. What the small business owner needs is a fluid program that combines all and ultimately allows them to take care of their business.

Continuous evaluation helps align your figures to current scenarios and economic factors. Through this, the founder is able to derive realistic figures that are actionable.

Do your research before you even look at start up costs. Who is your target market? Do you thoroughly understand what they are looking for? What can you offer? How will you deliver it? Price it? Make it stand out? Are you offering a transactional business (where the market focuses on price) or a relational business (where the market looks at value before price)? Knowing all this will help frame the working assumptions and scenarios. Otherwise it might just be a lot of numbers!

Accessible benchmarks that help the small business owner compare/contrast their business from those similar would be very helpful to assist small business owners in tracking their performance. Again- the difference between thriving vs surviving.

Engaging an expert to help guide your understanding of where you are can be the difference between thriving and surviving. In the early days cashflow is equally if not more important than understanding your breakeven point. A sales is not a sale until the money is in the bank, so having a handle on ALL business expenses, your operating margins, and holding a contingency fund are crucial. Regularly reviewing these estimates as real data comes is key to staying on target.

Uma empresa americana nos pediu para desenvolver um Plano de Contas contábil e centros de custos amarrados com os relatórios contábeis e financeiros: DRE, FLUXO DE CAIXA e BALAN?O PATRIMONIAL), para analisar viabilidade de abertura de uma empresa no Brasil. Com uma orienta??o dos relatórios, se faz as análises de Valuation, gera??o de caixa e lucratividade. Bastando uma orienta??o de um profissional de contabilidade. Cada relatório requer uma entrada de dados, onde no plano de contas amarramos as contas e centros e centros de custos (entradas). Resumindo: a linguagem universal de contabilidade e finan?as nos fornece todas as análises que precisamos para analisarmos viabilidade, bastando a orienta??o de um profissional de contabilidade

If you want to drill down on your market strategy, get PlanMagic Marketing. If you also want to analyze previous performance, get the Advanced Edition which includes a separate marketing analysis workbook.