SCORE's Startup Worksheet Sets You on the Right Course

(Free Download) Starting a business is exciting, but underestimating your initial costs can quickly turn the dream into a financial challenge. Many entrepreneurs have run out of funds because they didn’t fully understand the scope of their expenses. To avoid this hurdle, it’s crucial to meticulously research, plan, and create a solid foundation for your business's financial health.

Step 1: Expenses – Build an Accurate Picture

Take a deep dive into what it will cost to launch your business. This process starts with creating a comprehensive list of all the essentials. Break it down into categories like equipment, inventory, services (e.g., remodeling, insurance), and more. Every detail matters. What do you need to buy? Where will you buy it?

Research multiple vendors to compare prices, terms, and service quality. It’s a little extra work now that saves a lot later. Your attention to every small detail now can protect you from financial surprises once you’re up and running.

Step 2: Plan for the Unexpected – Add Contingencies

No plan is complete without a safety net. The best entrepreneurs expect the unexpected and allocate a reserve fund to address unforeseen circumstances.

Based on potential risks outlined in your business plan—like market shifts or economic uncertainty—set aside a contingency budget. Many experts suggest reserving 10-20% of your total estimated costs to handle surprises. Clearly document why and how much you’ve allocated. This not only provides security but demonstrates professionalism to investors or lenders.

Step 3: Secure Working Capital – Maintain Stability

Starting strong means anticipating the need for ongoing funds as your business grows. Establish a 12-month cash flow projection to figure out how much working capital you’ll need for daily operations, payroll, and other ongoing expenses.

If calculating this isn’t clear-cut yet, you can leave it blank in the short term—but understand it’s a critical step in ensuring financial stability in those early months.

Step 4: Identify Your Capital Sources

With a clear understanding of your startup costs, shift your focus to the big question—where will the money come from? Break it down into clear categories:

• Personal investment

• Contributions from partners or investors

• Loans or other borrowed funds

This section of the worksheet is your opportunity to demonstrate exactly how you'll fund your vision. Clarity and specificity build trust and confidence with any outside party evaluating your plan.

Step 5: Collateral – Backing Your Commitments

If you’re seeking a bank loan, showing collateral is essential. This is where you list assets (e.g., property, equipment) with clear estimated values that you’re offering to secure your loan. Be prepared to provide documentation to support these assessments. A journalist doesn’t share a quote without citing the source, and you shouldn’t either.

Why Planning Matters

An entrepreneur who skips the step of estimating costs accurately is like a ship captain sailing uncharted waters without a map. While optimism fuels the dream, detailed planning ensures the dream doesn't sink.

From carefully listing expenses to ensuring financial stability with working capital and contingencies, each step is a pillar in building a sound business foundation. The process may seem daunting, but it’s your safeguard against the unexpected.

Need help walking through these steps or using the worksheet to its full potential?

SCORE is an excellent resource. Please see their Start Up Expense Worksheet Below. Together, we can make your vision a reality and set your business on the path to success.

Start-Up-Expenses_0 (1).xlsx

Download XLSX • 18KB