We often get questions from our community from those who want to open or expand a business. Each business has its own needs, goals, and much more. However, there are some must ask questions before opening small business when proceeding. Here are a few of the most pertinent questions regarding small business.
1. What Will My Expenses Be?
Expect two main expenses for your new business: 1. The initial startup costs 2. Ongoing overhead expenses. For example if you are opening a restaurant, you will need to tally such costs as:
- Lease or mortgage on the property.
- Cost of equipment such as stoves, ovens, appliances, computers, etc.
- Cost of fixing up the property including repair and design.
- Any furniture and other items such as tables, chairs, hostess stand, cooking hardware, silverware, and more.
- The cost associated with hiring new staff and training them.
- Any costs associated with products including food, beverages, and alcohol.
- Time and cost to acquire any and all licensing.
- Cost to market the business.
- Any and all taxes. Here’s a neat article on small business taxes in Texas.
Ongoing expenses would include:
- Lease or mortgage on the property.
- Cost to maintain equipment.
- Cost to maintain the property including lawn service, cleaning, extermination, etc.
- Replacing furniture and other items as needed.
- The cost associated keeping staff and new hires.
- Any costs associated with products including food, beverages, and alcohol.
- Cost to market the business.
- Any and all taxes.
2. How Do I Calculate Costs?
We recommend beginning by tallying your startup costs as well as how long you will go before you earn a dollar and begin turning a profit. For example, if your startup costs are $100k and it takes you six months to open your business. You will have to go six months without earning a single cent. You must also plan for how long it will take to make that $100,000 back in both gross and net profit.
It is essential to be as accurate as possible with these estimated costs. We highly recommend getting a trusted bookkeeper in your area to help plan for the uncertainty of it all. Remember it is better to overestimate your costs as bidding below your needs now could lead to cash flow issues down the line. Which brings us to:
3. Do I Need a Bookkeeper?
Yes, you do. Get one that specializes in small businesses in your area. He or she can help you perform advanced tasks, such as preparing prospective profit and loss statements, a business plan, and much more. They may also even have clients in similar industries as your business and can speak from experience. Don’t be afraid to ask your friends, family, and even competition for bookkeeper recommendations.
4. Where Do I Get Funding?
Your bookkeeper probably knows of funding sources in your area. You may also check out your personal bank, especially if you have a long standing account with a good record. You may be assistance from government agencies depending on your business. Venture capital firms and angel investors can also be viable. Of course, you should be willing to put your own money into your business, as no investor will if you won’t. In many cases, new business owners do a combination of these strategies.
Must Ask Questions Before Opening a Small Business in Houston
Do you need help opening a mid to small business in Houston? Our bookkeeping services can help navigate these difficult times. Feel free to contact us to learn more on how our team can help with your small business.
