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When starting a new business, it is important to consider how much money is needed to start and maintain operations.
Typically, when considering the amount of money a business needs, there are two things we consider: startup costs and ongoing costs.
Startup Costs: Initial one time operating costs which come at the early stages of opening a business, typically before it becomes profitable.
This can include things such as:
Legal fees
Branding/Logos
Technology
Initial Inventory
Ongoing Costs: Recurring costs which are needed to maintain the business and its operations over time; These are paid monthly, quarterly, or annually.
Examples Include:
Rent
Salaries
Insurance
Utilities (Electricity, Internet)
Tip: It is typically best to start small because it reduces the risk of losing valuable time and resources.
When people start small, they invest less money and time upfront, allowing them to experiment with ideas, test conditions in real time, and build confidence and momentum.
Try It Yourself!
Try It Yourself!
Larry's Food Truck
Larry's Food Truck
Larry is planning to buy and open his own food truck. What are some startup and ongoing costs he may have to consider?
Examples
Examples
Possible Startup Costs:
Purchase of Truck
Kitchen Equipment
Ventilation Systems
Licenses/Permits
Branding/Marketing
Possible Ongoing Costs:
Food Ingredients
Gas/Propane
Staffing
Maintenance and Repairs
Insurance
Commissary Kitchens (Private commercial kitchens to make food, required in many states)
⭐ Considering your costs on a case by case basis can be useful in pinpointing hidden costs which you may not have considered.
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