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Budgeting Start-Up Capital for a New Business

Article written by Veechi Curtis

A few years ago, a friend of mine decided to open a gift shop. She signed a lease in the main street and, while the shop stood empty for two months, spent up big on fitting out the premises, installing designer lights and top-of-the-range point of sale and security systems. The shop looked absolutely beautiful. The trouble was, by the time she was ready to open, she didn’t have enough capital left to purchase adequate stock, nor enough capital to live on for the next 12 months while her business established itself. Within six months, she had to cut her losses and close down.

So remember: Business start-up costs are often much higher than you imagine. If you’re still at the initial planning stage, have a look at the start-up budget in the table below (but remember that you may have expenses that aren’t included on this list!). I used the actual results from a colleague who was starting up a professional practice with two rented rooms in a health centre as the basis of my figures. However, if you’re considering opening a retail outlet, your costs of fit-out are likely to be much higher (a retail fit-out typically costs well over $100,000 in itself). Also, if you’re purchasing a franchise, you need to add the franchise purchase price as well as the ongoing monthly retainer while you’re still getting things off the ground.

Tip: After you budget for your start-up costs, add a good allowance for your living expenses for the first few months because you can’t expect to make a profit right from the word go. You may even prefer to build up your business slowly, and maintain a part-time job at the same time. (After all, working 80 hours a week is such fun!)

Budget for Projected Start-Up Expenses

Accounting fees (advice for new set-up)


Business stationery


Computer systems and peripherals


Consultant fees


Council fees, if necessary


Fit-out of new premises, incl. compliance with council requirements $12,500.00
Incorporation of company with ASIC $1,100.00
Insurance (public liability/business indemnity/property/workers comp) $850.00
Internet connection and networks $650.00
Legal fees, including lease agreement fees


Licence fees


Marketing materials and brochures


Motor vehicles, including special fit-out, if required


Office furnishings


Registration of business name


Incorporation of company with ASIC


Rental bond and rent in advance


Retail equipment (cash register, point-of-sale software)


Security bonds for electricity, gas and phone


Signs and marketing


Stock on hand


Telephone connection


Tools and equipment


Training of staff


Website design and construction


GRAND TOTAL $55,280.00


Small Business For Dummies

For more about budgeting for small business, as well as obtaining lots of tips about how to secure finance for your new business venture, you can purchase your own copy of Small Business For Dummies from our online bookstore. Click here to order.

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