Many people struggle with the financial side of starting their small business. Not everyone has a head for figures – and it is especially hard to predict sales and demand when the business hasn’t started yet.
To predict sales revenue, you’ll need to know how to set prices. For example, will you simply add markup to your costs (known as cost-plus pricing) or will you base your price on the value your customer will place on your goods or services? Whichever method you choose, you’ll need to get your prices right if your business is to succeed.
A key task for new businesses is to work out your start-up costs. As well as launching your business, obviously, you need to be able to financially make it through that all-important first 12 months.
Once you know how much money you require to launch your business, you can decide whether you can do it with your own cash or whether you need to secure start-up funding from elsewhere.