Creating a budget for a new startup?
Could anyone share a list of what all items I should be looking at to create an initial budget? Things like setting up the corporation, office space, desks, chairs, etc.
The more granular the better.
Or better yet, could you share an excel file of a budget that a successful startup made?
We are creating a python/django development consultancy.
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Please edit your question to clarify the type of startup - software, manufacturing, retail, etc. Makes a big difference. – Webbie 11 years ago
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Updated the question, it's a web development consultancy. – User30105 11 years ago
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For a consultancy, offer to come out to clients to avoid setting up an office. You want to have a steady cash flow before committing to an office expense. Consider using office sharing services where you pay for use of a conference room you can book n hourly basis - there are many to choose from in major cities. WeWork is great, but there are many others. – Webbie 11 years ago
2 Answers
Assuming a consumer (not enterprise) targeted software business, here are some expenses that you are likely to have, depending on what you are building:
1. Formation - from $300 (LegalZoom) to $X,000 if you hire a law firm and need extras like co-founder agreements, etc.
NOTE: you don't need to incorportate to build an initial product! Build an MVP, get some traction, then decide if you need a formal structure. At a bare minimum, postpone this expense. One possible benefit - if you plan to invest significant money, you can pass the loss through an S-corp to your personal income. Consult an accountant on all the options.
2. Building an MVP - expenses depend on the skills you and your founding team has
a) design - a few hundred for a template that's not unique, $1000 custom design via 99Designs, $X,000 for a designer to design mutiple pages per your needs
b) programming - ideally you or you co-founder cover this, otherwise expect to spend a few hundred dollars for a couple flat landing pages or thousands for a functional site with features
c) hosting - cheap if you are starting with a landing page on a blogging platform (recommended), $50-300/month for a dedicated server(s) for a complicated data-driven site
3. Initial Expenses at/post launch of the product:
a) Advertising - you should spend at least $150 the first month ($5/day via Google AdWords) to get some traffic to your product to maximize learning - are visitors signing up, where visitors drop out, what feedback are you getting, etc.
b) Software - analytics (Google Analytics is free and should be enough for your first year), SEO tools, widgets and add-ons (HelloBar, WebEngage, etc).
This is a really subjective list of possible expenses, assuming a consumer (not enterprise) targeted software business. This list and the cost will vary dramatically depending on the industry, team size and skills, type of product being built, etc.
This question is impossible to answer.
How big is the startup? At what stage is the startup?
If it's just you and an idea, your budget should be $100, you don't need a corporation, office, desk or chair that cost money.
If you're a two year old, revenue generating startup with 100 employees, the costs are going to be significant.
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+1 for avoiding a physical office space while small - avoid this expense as long as you can – Webbie 11 years ago
