The Financial Analysis is quite important. If you are applying for a business loan it could be the most critical section of all, as these estimates will help determine if you are a good credit risk. All projections must be based on historical and/or industry information – no “winging” it here!
This post will include projected start-up costs; income will be included in the next post. Although I am not applying for a small business loan, I still treated this section as rigorously as if I were. I researched how much the equipment I needed would cost and included the vendor name and item numbers. I received actual web site design bids. I used historical data for phone and email newsletter services. I included accurate costing information for everything I could.
The only estimate that may be a little nebulous is that for my precious metal purchases – findings and raw material that will be incorporated in my work. The precious metal market is in high flux, due to the economy. There has been wide variation over the past several months, so I based my precious metal pricing on the market price at the time I put together my Business Plan. I fully expect it will change and will price my finished goods accordingly.
Although the specific numbers I developed are only useful to my own business, here are the expense categories I used:
- Initial Web Site Cost
- Web Hosting & Web Upkeep
- Logo Design
- Business Papers
- Copyright/Trademark Registration
- Packaging
- Credit Card Processing
- Email Newsletter Service
- Other Marketing Costs
- Professional Services – accountant., consultant
- Phone
- Office supplies
- Studio Equipment – one time purchases
- Studio Consumables – sandpaper, mold material, etc.
- Precious Metal Consumables – becomes an intrinsic part of jewelry.
- Non-Precious Metal Consumables – becomes an intrinsic part of jewelry.
If you see something I may have forgotten, please let me know in a comment. As I said in a previous post, the Business Plan is a living, breathing document and subject to change.
Next: The Business Plan – Financial Analysis & Projections, INCOME!
