Week 10 Initial Cost Estimates Entrepreneurship Week 10 Initial Cost Estimates

Example

Example

Example

Example

Start up Cost Estimates Item Source Amount Computer Etronics Co 300 OMR Accounting software 40 OMR Desks Nizwa Office supply 50 OMR Chairs Web site creation Muscat software 20 OMR Car Budget cars 2000 OMR Advertising brochures Nizwa Printing Co. 15 OMR / 1000

Start up Cost Estimates – ice cream shop Item Source Amount Computer Etronics Co 300 OMR Accounting software 40 OMR Refrigerator Nizwa industrial supply 150 OMR Display case 250 OMR Web site creation Muscat software 20 OMR Advertising brochures Nizwa Printing Co. 15 OMR / 1000 Store decorations 60 OMR Cleaning supplies 15 OMR General Tools 10 OMR

Operational Processes If you sell something, Where will you get it? How will it get to your store? How often will you be supplied?

Operational Processes – flower shop Flowers will be imported from India They will be flown to Muscat and delivered to my store Delivery will be once each week.

Operational Processes If you make something, Where will you get the materials? What equipment will you use? Who will do the work? How much do you plan to make?

Operational Processes – soap maker There are three main ingredients for my soap. I can obtain them from the Muscat Industrial Supply Company. They do not deliver, so I will have to drive to Muscat once a week to pick up ingredients. I do the mixing myself in my family’s kitchen. It requires several bowls, some water, and an industrial mixer. I can make the soap in an hour. Then I mix in coloring and scent, and pour into molds. The molds need to set for 12 hours. I make 68 bars of soap each week.

Cost of goods sold Cost of good sold – costs that only occur if you sell a product - (food for your restaurant, clothing for your store) We may forget some costs – napkins at a restaurant, spoons for ice cream, wrapping paper for flowers – but these costs matter. Be sure to include all costs.

Cost of goods sold – Flower shop Items part of each sale: Flowers (.1 OMR each) Cardboard container (.1 OMR) Gift card (.02 OMR)

Cost of goods sold – Soap company Items part of each sale: soap (.7 OMR each) Paper wrapper (.1 OMR) Company description/promotion (.02 OMR)

Growth Plan Typical growth patterns: Geography – same business in more places Size – larger size store/restaurant Products – more products/sizes/brands

Operational Process example You have a coffee shop near the university. What process is needed for you to serve your customers?

Operational Process example You have a coffee shop near the university. What is the cost of goods sold for one cup of coffee? Be sure to include everything you need to serve that one cup of coffee.

Operational Process example - 2 You have a bookstore in the Nizwa souq. What process is needed for you to sell books?

Operational Process example - 2 You have a bookstore. What is the cost of goods sold for one book? Be sure to include everything you need to sell that one book.

Build you Business Plan Online support to build your business plan www.sba.gov/tools/business-plan/1

Online Resources www.entrepreneur.com /www.sba.gov/blogs/how-estimate-cost-starting-business-scratch