Startup Expenses and Capitalization Spreadsheet
In starting your very own business, you must anticipate that you are going to have several expenses before you can begin operating. It is very important for you to estimate and organize these needed expenses accurately. You will also have to think and plan on the source of your capital.
Simply put, this is going to be a very detailed research project.
You must keep in mind that in preparing your startup expenses and capitalization spreadsheet, the research that you will be conducting must be thorough. This is because the more thorough and accurate your research is, the lesser the chance that you will count out essential expenses or miscalculate them. However, you must also bear in mind that although you have conducted a thorough and well detailed research, starting and opening your new business will always seem to cost more than what you have anticipated. This is where your spreadsheet will be of use to you.
Two Approaches on Making a Spreadsheet
In general, there are only two major ways on making allowances in case there will be a surprise expenses. The first one is for you to add and include a bit of “padding” on each of the item in your budget. There is, however, a problem with this approach. The problem is that it will destroy the accurateness of your well made plan. On the other hand, there is a second approach that you can opt to choose. In this second approach, you will need to include a line item which you must separate from the others. This is typically called contingencies. This will be useful in accounting the unforeseeable. This approach is what most business counselors usually advice to new business owners. The main reason for this is that this approach will let you easily realize and see the “contingencies” line on your spreadsheet.
Create Your Spreadsheet
When you create your startup expenses and capitalization spreadsheet, you will need to include and consider several things in it. Expenses, contingencies, working capital, sources and collateral are what you need to include in making your spreadsheet. You can use Microsoft excel when making your spreadsheet. First you must write the sources of capital and under it is where you are going to write your investment and the other investors. You must also write the amount of investments that you and your co-investors have contributed and sum it all up. After that, write your bank loans where you will include all the name of the banks. Include also the amount that you have loaned from each bank and get the total amount. If you have other loans aside from the bank, you must also write it in your spreadsheet.
Next thing for you to write are the startup expenses of your business. You will include in it all the things from which you have spent your money like the cost of the construction of your office, lease, capital equipment, location expenses, and a lot more. Lastly, make a summary statement of all you have included in your spreadsheet. If you are still having some difficulty, you can search online forms and details about writing a spreadsheet.
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