Top Blogs

Selasa, 23 Februari 2010

Predicting Expenses

Part of making your business plan is to predict your expenses in the upcoming months. These costs may vary throughout the different stages of your business. Some companies may require a large investment at the start because of inventory or equipment costs.

It is essential at your startup to spend money only on necessities. Laying out extra cash for luxuries you don't need is a waste and can only lead to strains on your budget. For example, it may be cheaper to rent a cargo truck instead of purchasing one. Sacrifices and risks need to be taken in order to obtain a reward in the end.

In your budget will be generally two types of expenses. Those that are fixed and usually at a constant rate. This includes things such as utilities, rent, insurance, and administrative costs. The other type is the kind that will be constantly changing in some small proportions. This includes things such as shipping and packaging, inventory, employee paychecks, and prices associated with sales. Try to separate these two different expense types. Fixed expenses will be much easier to predict the cost of, while the variable costs can range.


Ads By Google