NEW VENTURE GUIDE
by the UALR Arkansas Small Business Development Center
Project Cost Analysis
The cost of starting a business is often referred to as
the "project cost." This amount will include
several types of costs. In order to help you itemize the
various costs associated with your project, we have provided
a worksheet below. The purpose of this worksheet is to help
you determine all of the start-up costs, whether you
are financing them with your own capital or outside funding.
| CATEGORY |
COST |
| LAND/BUILDING ACQUISITION: If your
project requires you to occupy a building you own, you
will have cost in this category. If you are purchasing
the facility, the cost is the purchase price; if you
currently own the facility, its market value is the
project cost. |
|
| NEW CONSTRUCTION: If your project
requires that additional facility space be constructed,
this will be one of your costs. This also applies if you
own the land and will need to construct a facility on
that land. (The value of the land in the latter case is
included in the preceding category.) |
|
| MODIFICATION OF EXISTING FACILITY: If
your project requires that an existing facility be
modified, the cost of that modification should be
recorded here. This also applies if you plan to lease a
facility which needs to be modified and the cost of those
modifications will not be borne by the landlord. |
|
| EQUIPMENT, FURNITURE, AND FIXTURES: If
your project will require any equipment, furniture and
fixtures, the cost of these items will be included here.
Also, if you own equipment, and will contribute it to the
project, the value of that equipment is included here. |
|
| INITIAL INVENTORY: If your project
involves the sale of merchandise, you will need an
initial stocking of inventory. The cost of this inventory
is one of your project costs. |
|
| ONE-TIME START-UP EXPENSES: You may have
expenses that will occur only in your start-up phase.
These may include rent/utility deposits, appraisal fees,
loan origination or closing fees, etc. These should also
be taken into consideration in the project cost
determination. |
|
| OTHER WORKING CAPITAL: You need to
include in your project cost enough cash to pay the
company's monthly expenses until it is generating
sufficient cash to cover all operating costs.. (Enough
capital to operate the company for 3-6 months should be
adequate.) You will have an idea about the business'
monthly operating costs once you have completed your
first year's profit/loss projections. |
|
| TOTAL PROJECT COST: This total of
the above items should include the cost of the items you
will need to purchase as well as the value of the items
that you are contributing to the project. |
|
|
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The Arkansas Small Business Development Center is funded in part through a
cooperative agreement with the U.S. Small Business Administration through a
partnership with the University of Arkansas at Little Rock College of Business
and other institutions of higher education. All opinions, conclusions or
recommendations expressed are those of the author(s) and do not necessarily
reflect the views of the SBA. It is the goal of UALR to eliminate discriminatory
harassment and to promote equal opportunity regardless of race, gender, color,
national origin, sexual orientation, age, religion, veteran’s status, or disability.
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