Overheads And Costs


Budgeting for your business is tricky business indeed. If you estimate that you’ll need more than you actually do, you may end up borrowing too much money from creditors and have to deal with excessive interest rates. On the other hand, if you underestimate the amount of finances you’ll require, you may end up not being able to carry out the operations you need to make your business grow more profitable. Here’s a list of some of the operational and overhead expenses you should keep in mind when growing your business:

  • Building costs – Determine a blue-print for the building and get bids from various contractors to help you get the most competitive prices. Make sure you set realistic and accurate deadlines taking into consideration various external factors which may affect the construction work.
  • Equipment costs – Talk to different suppliers to make sure you get the right equipment at the best price. Bear in mind that there are always additional expenses such as installation and delivery.
  • Inventory costs – This is your initial product and its cost determines how efficient your output is. It’s a good idea to base this on past inventory sales.
  • Accounts receivable – Projections made on accounts receivable are usually based on existing receivables on the balance sheet.
  • Additional expenses – There are always additional expenses that don’t fit into specific categories – however, they should not be left out of your predictions.