Cost analysis. If you haven’t heard the term before, there it is. Those single two boring words could mean the difference between success and failure for your start-up business. Business is about money, more specifically, making a profit. If you don’t agree with that, this is not the blog post for you. Try our recent post “How to work for the man in a tiny cubicle the rest of your life and die mediocre.”
Plowing ahead – there are hundreds of factors to consider when it comes to cost analysis but let’s focus on a few to get your grey matter going. What sort of venue are you planning for your business? More importantly, which one would be the most profitable? Some choices are retail store, online sales, or sales calls by appointment only. Formulate a budget for each. Consider costs for the venue, inventory, employees, marketing, product, and more. Sit down and compare the results. The cost analysis should be a major part of your decision.
Do you need funding? What sorts of loans, grants, or other sources can you tap into? Will the business be profitable enough to make it worth your time and effort? If you need $10,000 in startup money and only forecast to clear $1,000 in annual profits – it might be time to slam on the brakes on that idea sooner rather than later.
Of course, none of this is set in stone but even a simple cost analysis is better than flipping a coin.
The Young Wealth Team