Start up and Running Costs Help

Start up Costs

  • Do you need to buy any new equipment?
  • What materials do you need to buy?
  • premises;
  • Stock;
  • IT and other equipment;
  • Office furniture;
  • Fixtures and fittings
  • Branding;
  • business stationery and office supplies;
  • Marketing your new business;
  • website development

Running costs

An enterprise will need to plan the costing and pricing of its products carefully. Costings cover all of the costs associated with the provision of the product. This will include:

  • fixed costs (costs that do not change according to changes in output) – such as electricity and water bills, rent or insurance costs
  • variable costs (costs that change according to changes in output) – such as the raw materials that make up the product. For example, if an enterprise plans to make jumpers, it may need to rent space in a factory or buy sewing machines. It would also need to buy fabric, zips, cord, labels and so on.


Examples of fixed costs

•Water rates

•phone and internet charges; (if on a all inclusive plan)

•Insurance;

•Rent;

•Non Domestic Business Rates (Business version of council tax)


Examples of variable costs

•Electricity

•Gas

•Water meter;

•marketing your new business;

•Postage;

•wages for you and your staff

Calculating Total Costs

The total costs of running a business are found by adding the fixed costs and the variable costs using this formula:

Total costs = Fixed costs + Variable costs


Example

Copy of aLesson 5 Costs.pptx