How toCalculateBusinessStartup Costs
Ready to start a business inSouthwest Missouri or Kansas? As an entrepreneur,you’ll want to make sure your business willyield aprofit, which is why it’s wise tofirstunderstand how much it costs to start the businessandwhat it will take tokeep it going.Business startup costsincludeall of the one-time expenses you’ll incur before you’re technically open for business. The great thing is that these start up business costscan be tax deductible.But how much do you need and what else should you consider? Learnwhat you need to know about calculating startup costsfor your newSouthwest Missouri or Kansasbusiness.
HowMuchDoesItCost toStart aBusiness?
The cost to start a businesswill vary based on a number of factors including the type of business you’re in, the area you’ll be operating this business, andwhat you need to get started.TheSBA estimatesthatmost home-based businesses only need to invest about $2,000-$5,000to get started. Other business models canrequireupwards of a million dollars, so understanding these costs isavitalpart of your business plan.
TypicalStartup Business Costs& Tax Deductions
A list ofexamplesyour businessstart-up costsmightinclude:
- Market research to determine if you should buy or create this newbusiness
- Licenses, permits, legalfees
- Building, facility or land
- Inventory
- Employees or labor
- Rent andutilities
- Furniture, supplies, equipment
- Insurance
- Marketing expenses like signs, flyers, website,agency or freelance costs
- Technologyneeds includinglaptops, phones,tablets, credit card payment processing systems, software like customer relationship management systems, inventory programs andmore
It’s important to keep track of all of your startup expenses because you’ll need this information when filing your taxes. TheIRSdefines business start-up and organization costs as capital expenditures. They allow business owners to deduct up to $5,000 of business start-up and $5,000 of organization costs incurred after 10/22/2004. According to the IRS, startup costs include expenses that went into investigating the creation or acquisition of a business and creating an active trade or business. Organizational costs include expenses related to creating a corporation or partnership.
Depending on the type of expense, you may be able to deduct or amortize costs for the one-time business startup costs. Use the Small Business Administration’sstartup costs worksheetto keep track of your specificstart upexpenses.
Starting a Business inMissouri/Kansas
InMissouri and Kansas, there are several helpful resources to help you get yournewbusiness off the ground:
Funding Your BusinessStartup Costs
If you’d like to seekbusinessfinancing to coveryour businessstartup costs,a great first step istodevelop a strong business plan. Investors and lenderslikeOakStarBankwant to understandyour estimated startup costs,whetheryour business idea is viable, how it will be operated, your marketing strategy, and projected business expenses and revenue.Business counselors can advise you onhow to outline these essential components in your business planso that you maximize your ability to secure start up business financing.
Check out these small business resourcesin Missouri and Kansas:
- Missouri Small Business Development Center
- Kansas Small Business Development Center
- Enter your zip codehereto find a state resource closest toyou
We love helping entrepreneurs get started atOakStarBank, and have several business tools and resources to help you get started including:
- Merchant Processing
- Overdraft Protection
- Positive Pay
- Direct Deposit
- Credit Card
- Debit Card
- Compare BetweenLoans
- LearnHow to GrowYour Small Business
Ourbusiness loanscan help turn your business idea into a reality.As apreferredSBA lender, we can helpyou navigate government programs to get the financing you need to manage cash flow, purchase inventory or fixed assets, buy equipment or buildings and more.If you’d like to talk to a local business specialistin Missouri or Kansas,pleasecontact usto set up an appointment.
Disclosure: This articleis for educational purposes only anddoesn’t constitute tax, legal or accountingadvice.Please consult with an attorney or tax professional for guidance.
