Consider your finances

What are your start-up costs?

• Work out your start-up costs. We recommend overestimating, rather than underestimating.
• How will you fund your start-up?
• Use financial benchmarks to understand what some of your costs might be. Learn more about benchmarking your business.

Can you generate enough income to cover your costs and make a profit?

• Calculate key figures such as break-even point, gross profit and net profit. These will help you estimate the level of sales you need to cover costs and make a profit. If you are uncertain of how to calculate these terms, visit an accountant or undertake financial training.
• What level of profitability can you expect?
• If you need extra finance you must develop a business plan for your lenders or investors, complete with a cash flow projection. Learn more about preparing a business plan.
• Estimate how long you can survive without making any money from your business. What if interest rates rise or fall? What if finance is not available to the extent you need?
• Develop a household budget to manage your money until the business starts earning income.
• Get an accountant to help you prepare cash flow forecasts and develop your record-keeping system.

What will you charge for your product or service?

• Contact competitors to find out what they are charging for similar products or services.
• Collect flyers and advertising brochures. Collect information on the specials and promotions that your competitors offer.
• Use our guide to help work out what to charge for your products or services.