startup costs

Before you begin…

Re-open the Business Plan Pro minimum outline .bpdx file that you saved as part of Assignment 2:  Market Analysis. You will continue to build into this .bpdx file with each assignment.

Assignment Steps

Your Startup Plan should contain a text explanation of what your startup costs and startup funding numbers are, plus two tables, the Startup Costs and the Startup Funding tables. The table explanations can be found here:

  1. Startup costs, as explained on pages 161-165 of The Plan-As-You-Go Business Plan book. Or you can click here for the online version of the book.
  2. Startup funding, as explained in the online example from the online version of The Plan-As-You-Go Business Plan.
  3. The online version of Hurdle: The Book on Business Planning also has sections covering Starting Costs and Startup Funding in Chapter 6: Describe Your Company.

In this session you will learn:

  • The difference between ‘startup’ and ‘ongoing’ expenses
  • How expenses vs. assets are treated for tax purposes
  • The difference between profits and cash


Start-up expenses happen before the business is running. If expenses come after the start of the plan, they are ongoing expenses. Ongoing expenses belong in the profit and loss table.


Expenses: Items or services paid for that a business can deduct from income for tax purposes. Common expenses are rent, salaries, advertising and travel.

Assets: Property that a business owns, such as cash and inventory, office equipment, buildings, accounts receivable, and investments.  Assets cannot be deducted from income for tax purposes.

Costs of Goods Sold (COGS): The costs of materials which are used to make the goods a business sells. These costs vary in direct proportion to the amount of goods sold.

Sales Forecast: The planned sales a business expects to make in the future; this may be shown by months and/or years.

Liabilities: Debts; money owed that must be paid. Short-term (current) are generally debts to be paid in less than five years; long-term debts are generally for longer than five years.

Capital Input: New money invested in ownership in the business, not as loans or payment of loans.