Business Start up Costs - India

Page 1

As a business owner, it is imperative to have a clear picture of your start up costs so that you can keep a good grip on your cash flow and reduce the possibility of running out of resources before your business is able to flourish. You won't have to go back cap in hand if resources run out if you've secured the right amount if you're considering a business loan.

Start up Costs : A startup cost is any nonrecurring cost associated with setting up your company, except assets. You can never recover sunk costs, regardless of how successful or unsuccessful your business is. Sunk costs are one-time costs that can not be recouped. In order to start selling to customers, your business needs to incur start up costs.

start up assets : The assets and inventory you will need have to do with the equipment, machinery, vehicles, and stock that you will be selling. On your balance sheet, assets are reported as an asset value. Reselling an asset would allow the business to earn some profit if you resold it. Over time, depreciation reduces the asset's value. Businesses can reduce their corporation tax bills by offsetting capital expenditure against profits under HMRC's capital allowance scheme. Capital expenditures up to £200,000 are allowed as part of the Annual Investment Allowance (AIA).

start up financing : Lastly, you need to figure out how much money you will need to start your business in the beginning and until you break even and generate a profit, which is the third pillar of start up costs that you need to calculate. Taking out start-up financing will ensure that the business is able to cover any start-up costs, the costs of purchasing assets and any ongoing fixed or variable costs that will inevitably arise once the business has opened, such as salaries, utilities and on-going marketing activities. Any interest that is payable on a loan should be included in this calculation.

Calculating start-up costs : In order to calculate startup costs, a financial forecast is created for the business, covering all costs up until the business starts to earn a profit. ●

Start up assets – You need to make a list of all the items you will need to acquire to run your business, such as machinery, computer systems, vehicles, and inventory, so that


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.
Business Start up Costs - India by viki vigneshh - Issuu