Start Your Own Business (29 page)

“If you think you can,
you can. And if you
think you can’t, you’re
right.”

—MARY KAY ASH, FOUNDER
OF MARY KAY COSMETICS

 

GOOD BENEFITS

 

I
f you have been laid off or lost your job, another source of startup capital may be available to you. Some states have instituted self-employment programs as part of their unemployment insurance systems.

 

 

People who are receiving unemployment benefits and meet certain requirements are recruited into entrepreneurial training programs that show them how to start businesses. This gives them an opportunity to use their unemployment funds for startup, while boosting their chances of success.

 

Contact the department in your state that handles unemployment benefits to see if such a program is available to you.

 

WARNING

 

Watch out for the relative or friend who agrees to lend you money even though he or she can’t really afford to. “There will always be people who want to do anything they can to help you, who will give you funds that are critical to their future just because you ask for it,” says Mike McKeever, author of
How to Write a Business Plan
. “These relatives will not tell you they really can’t afford it, so you must be extra perceptive.”

 

TIP

 

A business plan sets out in writing the expectations for the company. It shows family members who are putting up the money what they can expect for their contribution. And it helps keep the entrepreneur—you—mindful of responsibilities to family members who backed you and keeps you on track to fulfill your obligations.

Startup Costs Worksheet

 

The following two worksheets will help you to compute your initial cash requirements for your business. They list the things you need to consider when determining your startup costs and include both the one-time initial expenses to open your doors and the ongoing costs you’ll face during the first 90 days.

 

 

Startup Capital Requirements

 

One-time Startup Expenses

 

 

Startup Expenses	Description	Amount
Advertising	Promotion for opening the business
Starting inventory	Amount of inventory required to open
Building construction	Amount per contractor bid and other costs
Cash	Amount needed for the cash register
Decorating	Estimate based on bid, if appropriate
Deposits	Check with utility companies
Fixtures and equipment	Use actual bids
Insurance	Bid from insurance agent
Lease payments	Fees to be paid before opening
Licenses and permits	Check with city or state offices
Miscellaneous	All other costs
Professional fees	Include CPA, attorney, etc.
Remodeling	Use contractor bids
Rent	Fee to be paid before opening
Services	Cleaning, accounting, etc.
Signs	Use contractor bids
Supplies	Office, cleaning, etc.
Unanticipated expenses	Include an amount for the unexpected
Other
Other
Total Startup Costs	$

 

 

Startup Capital Requirements

 

Ongoing Monthly Expenses*

 

 

Startup Expenses	Description	Amount
Advertising
Bank service fees
Credit card charges
Delivery fees
Dues and subscriptions
Insurance	Exclude amount on preceding page
Interest
Inventory	See ** below
Lease payments	Exclude amount on preceding page
Loan payments	Principal and interest payments
Office expenses
Payroll other than owner
Payroll taxes
Professional fees
Rent	Exclude amount on preceding page
Repairs and maintenance
Sales tax
Supplies
Telephone
Utilities
Your salary	Only if applicable during the first three months
Other
Total Ongoing Costs	$
Total Startup Costs	Amount from p receding p age e	$
Total Cash Needed	$
*Include the first three months’ cash needs unless otherwise noted.
**Include amount required for inventory expansion. If inventory is to be replaced from cash sales, do not include here. Assume sales will generate enough cash for replacements.