SME Toolkit Logo
Partner Logo
 Share  Print Version  Email

Expenses and Capital Requirements

Adapted from content excerpted from the American Express® OPEN Small Business Network


You must also create three financial forms that will build a foundation for the Financials section of your plan: operating expenses, capital requirements, and cost of goods. Generate spreadsheets for the year in which you establish your business as well as projections for two years after. You may require the help of an accountant or someone familiar with the cost of doing business in your industry and chosen business.

Operating Expenses

By creating a financial form called Operating Expenses, you pull together the expenses incurred in running your business. Expense categories include: marketing, sales, and overhead. Overhead includes fixed expenses such as administrative costs and other expenses that remain constant regardless of how much business your company does. Overhead also includes variable expenses, such as travel, equipment leases, and supplies.

Capital Requirements

This form details the amount of money you will need to procure the equipment used to start up and continue operations of your business. Capital Requirements also includes depreciation details of all purchased equipment. To determine your capital requirements, think about anything in your business that will require capital. For a diaper delivery service this might be a van, washing machines and dryers, irons and ironing boards, and supplies. Manufacturing companies obviously require more equipment for production. This equipment can fall into three categories: testing, assembly, and packaging.

Cost of Goods

For a manufacturing company, the cost of goods is the cost incurred in the manufacturing of the product. For a retail or wholesale business, the cost of goods (sometimes called the cost of sales) is the purchase of inventory. To generate a Cost of Goods table, you need to know the total number of units you will sell for a year as well as what other inventory you have on hand, and at what stage of production those units exist. For a manufacturing company, the cost of goods table will include materials, labor, and overhead related specifically to product manufacturing.

FAQ's   Introductory Elements   Business Description The Market
Development & Production Sales & Marketing Management Financials

 

Copyright © 1995-2016, American Express Company. All Rights Reserved.

 Share  Print Version  Email
Comments & Ratings (10) Overall  
  • Currently 3.7/5 Stars.
If you are a human, do not fill in this field.
Click stars to rate.
   Comments are truncated at 1000 characters
What Others Are Saying
Sort by
View
  • Currently 4.0/5 Stars.
Robertbengly Bengly, Bali, Indonesia  |  October 31, 2016
Thank you for sharing, however it seems that to be a strong company is also need to have a strong team and sometime when we have an idea to expand the business there will be need a strong team and management system,this is just sharing,thank you for your great article and this is one of the important thing is doing the business. visit also us http://www.gilibestdeal.com
  • Currently 0.0/5 Stars.
RBS FINANCE  |  October 19, 2016
Are you a business man or woman? Do you need funds to start up your own business? Do you need loan to settle your debt or pay off your bills or start a nice business? Do you need funds to finance your project? We Offers guaranteed loan services of any amount and to any part of the world for (Individuals, Companies, Realtor and Corporate Bodies) at our superb interest rate of 3%. For application and more information send replies to the following E-mail address: rbsloanfirm.info@gmail.com (Whatsapp +917289037578 +17274140074) http://rbsloanfirminfo.wixsite.com/mysite Thank you
  • Currently 4.0/5 Stars.
Alip Iskandar, google, Indonesia  |  August 22, 2016
http://alip.web.id/toko4d-net-agen-togel-online-dan-bola-terpercaya-di-indonesia/ http://alip.web.id/rajatogel88-com-bandar-agen-togel-online-terpercaya/ http://alip.web.id/rajacasino88-com-agen-judi-casino-online-indonesia-terpercaya/ http://alip.web.id/rajadomino-com-agen-judi-poker-capsa-susun-dan-bandar-domino-qq-online-terpercaya/ http://alip.web.id/rantaiqq-com-agen-bandarq-dan-judi-domino-online-terpercaya-di-indonesia/ http://alip.web.id/waltpoker-situs-judi-domino-poker-online-terpercaya-indonesia/ http://alip.web.id/vipbandarq-com-bandarq-game-bandarq-capsa-online-bandar-poker-agen-domino99/ http://alip.web.id/twinpoker88-com-agen-judi-poker-dan-domino-uang-asli-online-terpercaya-indonesia/ http://alip.web.id/asianpoker88-agen-judi-domino99-dominoqq-bandarq-online-terpercaya/ http://alip.web.id/bungaqq-com-bandarq-aduq-dan-domino-qq-online-terpercaya/ http://alip.web.id/fullbet88-com-bandar-dan-agen-judi-bola-online-terpercaya/
  • Currently 5.0/5 Stars.
Bette Daoust  |  June 23, 2016
Thanks for the great example of a marketing strategy statement, we have been able to use this as a template for our own statement. -Dr. Bette Daoust
  • Currently 4.0/5 Stars.
Abdulkadir Muhammad  |  August 17, 2015
  • Currently 5.0/5 Stars.
Alex Shakaryan  |  October 13, 2014
  • Currently 0.0/5 Stars.
Gopal krishna Debnath  |  November 28, 2013
customer is the focal person of a business, hence he/she should be properly honored and addressed. clear description of the product is very important so that actual customer get the real and to the point information.
  • Currently 5.0/5 Stars.
Sandeep Chandra  |  February 03, 2011
  • Currently 5.0/5 Stars.
Muhammad Hamayun  |  December 09, 2010
  • Currently 5.0/5 Stars.
moqassalamin amin  |  September 01, 2010

 

Discussion