business start up costs

Business start-up costs are expenses that will be incurred by the entrepreneur and his investors before the business is officially opened and is thus able to generate revenues. While specific costs will vary, start-up fees include a viable location to conduct business, utilities, insurance, legal fees, equipment needed for production, as well as living expenses for the proprietor until the business begins to generate revenue. While not absolutely necessary, a very helpful start-up cost is promotional advertising that comes in various forms (business cards, print and internet advertisements, etc.). While expensive, potential consumers need to be (a) made aware of the start-up business which will (b) prompt them to bring their business there, as opposed to continuing with an established proprietor, so that (c) the business can generate revenues. Typically, start-up costs come from the following sources: personal savings from the entrepreneur, investments from other individuals or groups, or loans from a bank or the Small Business Administration (SBA). Given the tremendous expenses involved with starting up a new businessﾗnot to mention competing with the established competitionﾗentrepreneurs generally anticipate several months passing before seeing a profit.

Fast Facts

The vast majority of start-up businesses fail within the first year.
Reasons for failure include poor location, lack of initial funding, and insufficient promotion (i.e., no website).

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Income Statement

The income statement, also commonly referred to as the profit and loss statement, is a financial statement tha...
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Balance Sheets

A balance sheet provides detailed information about a company’s assets, liabilities and shareholders’ equity....
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Cash Flow Statement

The definition and function of the cash flow statement is that it is designed to specifically report the cash...
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Self Employment Business Tax Deductions

Self-employed individuals are required to report to the IRS the total amount of earnings (gross income) from t...
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Integrated Software for Tax and Accounting Purposes

When it comes to choosing accounting software for your business the options appear overwhelming. The proper se...
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