NEW VENTURE GUIDE
by the UALR Arkansas Small Business Development Center
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. |