What do you need to get your idea off the ground?

What will you need to keep running and keep those doors open?

Is it a product that needs a space or facilities to make, or a service that needs a car for travel. Do you need tools and equipment or software development. The costs of your business will be as unique as the business itself, though there are some common themes too.

Fixed vs Variable

Fixed costs are those that don’t change as your business output moves up and down. The costs you can count on to be the same month in and month out each year regardless of how much business is happening. Rent is a good example, you know how much it will be regardless of whether it’s been a busy or slow month.

Variable costs are those that change as your business output changes. For example, the cost of raw materials if you’re producing something will go up as you produce more things, same too with wages if you have a peak period. This isn’t to say they aren’t predictable, just that they may fluctuate in line with business activity.

Draw up a quick list of your fixed & variable costs. If you know or can estimate amounts, that’s great, but it’s more important at this early stage to identify just what those costs will be first!