Expenses and Capital Requirements

It is important to create three financial forms that will build a foundation for the financial sections of your plan: operating expenses, capital requirements, and cost of goods. Generate spreadsheets for the first three years for your business. This may require the assistance of an accountant or other professional who is familiar with finances.

OPERATING EXPENSES

Under your Operating Expenses, you include the expenses incurred in running your business. Expense categories typically include: marketing, sales, and overhead. Overhead includes both fixed and variable expenses.

COST OF GOODS

For a manufacturing company, the cost of goods is the cost of manufacturing of the product. For a retail or wholesale business, the cost of goods is the purchase of inventory. To detail your cost of goods, you need to know how many units you will sell for a year as well as what inventory you have on hand, and at what stage of production those units exist.

CAPITAL REQUIREMENTS

In your Capital Requirement, you will give details about the amount of money you will need to acquire the equipment needed for your business. Capital Requirements also includes depreciation details of all purchased equipment.