Consider your finances

Basic financial requirements

Start-up costs

• Work out how much it will cost to set up your business. It is better to overestimate than underestimate.
• Plan how you will fund your business.
• Research other businesses to understand your potential costs by benchmarking your business.

Pricing for products and services

• Research your competitors to find out what they are charging for similar products or services.
• Review competitors' websites and online promotions.
• Learn more about what to charge for your products or services.

Income and profit

• Calculate key figures such as break-even point, gross profit and net profit. This will help you estimate the level of sales you need to cover costs and make a profit.
• Know your potential profitability.
• If you need to borrow money, develop a business plan for your lenders or investors, and a cash flow projection. There will also be lending criteria to follow.
• Estimate how long your business can survive without making a profit. Consider factors such as interest rates and your ability to borrow more money.
• Develop a budget to manage your money until your business starts earning income.
• Engage an accountant or financial adviser to help you prepare cash flow forecasts and develop record-keeping processes.
• Find out about your tax obligations.