Your business starts racking up expenses even before your grand opening so it’s important to calculate your business costs early in the process. With a better understanding of your costs, you’ll be able to attract investors, secure funding, apply for loans, perform a breakeven analysis, estimate profits and determine business deductions. Calculating costs sounds overwhelming, but the process is fairly straightforward.

1. First, Identify Your Startup Expenses

Make a list of all of the things your business needs to get started. The expenses you can expect to incur depend greatly on the type of business you have. However, there are some expenses common among all businesses such as office space, utilities, insurance, employee salaries, supplies, licenses and permits and more.

2. Determine the Cost of These Expenses

After you’ve made a list of assets and expenses for your business, you can estimate the actual cost. Some items on the list will have defined, fixed costs while others will need to be estimated.

3. Add it All Up, and What do You See?

Once you’ve determined the cost of everything, you should separate your one-time and recurring expenses. This will help you determine both your annual expenses and your expenses for the next five years.

Learn more about calculating business costs and securing startup funding by visiting the Small Business Administration. You can also find tools online that will help you calculate your costs such as CardConnect’s startup cost calculator.