How Much Money Do You Need To Sustain Yourself?

Katheryn Hoban

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In order to achieve your dreams you have to have staying power. Before you open your own place you can first start by investigating the costs of rentals, utilities such as gas and or electric and which one is cheaper in your area, phone bills, any signage (and that is: signs of promotion and advertising for your business) that you may need, insurance, wholesale and day to day supplies for your niche, any restoration charges that you may incur to bring a space up to standards, repairs and maintenance that you may incur each month, and any expenses for permit or licenses that you may need on a yearly basis, and auxiliary charges such as web service and maintenance

If your business will need a physical place look at commercial spaces for cost per square footage (and then multiply it out), or look at space rentals in your area. Most commercial leases also include cam charges above and beyond rent; and that could include paying a percentage towards landlord’s taxes, mortgage and insurance, and his utilities, city and or county water and sewage or drainage charge. Determine how much space you’re going to need. Three hundred square feet might be more than enough for your needs but a real estate agent or property owner might try to talk you into more than you need because the greater the square foot of a space the greater the monthly rent will be.

Regarding commercial rental in most cases you need to have two full months rent and one half towards deposit up front. But some can charge three full months plus one half months’ rent. So knowing as much as possible up front can help you sustain yourself.

Once you have done some research and an investigation create a list of the expenses that you know you will incur, monthly and then annually. On your monthly list you should have nearly close to estimates of mortgage or rent, plus cam charges, property insurance, any health insurance, (utilities - usually paid per quarter), any travel expense that you know of, gas, and mileage, supplies or product that you can not live without to run your business. Don’t buy more than you need.

Let’s say the total of your estimate monthly total is $3500. You should increase that by at least half of the amount for unexpected expenses. You may want to double that to be on the safe side. If you can’t do that at least add another $1000 to it. Now add to that sum all the up front costs such as deposits, permits, fees that you will incur at the start. Finally multiply the new monthly cost by 6 months to 12 months. Longer if you can. But at bare minimum you should be able to sustain yourself for six solid months if you have no income coming in while you launch your business and get customers.

If you are working at home and you have little overhead, you still need to calculate your monthly expenses too. For an example car payment, insurances, website expenses, advertising, buying your products or materials, your house payment or rent, utilities, and continual monthly expenses like a college loan that you are paying on. Again come up with a monthly estimate or actual sum and then double the amount, multiply it by 6 months to twelve months and that is the money that you will need in savings to be able to run your business until it’s bringing in its own money.

I would personally try to put away savings of two years out to keep yourself in the game. It’s a tough haul but with budgeting, a savings plan, a little bit of patience you can manage. Better to have more than too little. The last bit of advice would be: don’t spend your surplus at least for the first three years. Keep it in case of an emergency.

Katheryn Hoban is the publisher of R-U New to a Business newsletter which gives FREE practical tips for starting and running your own on-line and or off-line business, from start to finish from your home or office. The pitfalls, rewards, every-day tips and things that you need to succeed, freebies, and more. For signing up you will receive a FREE report on STEPS ON HOW TO MANIFEST EXACTLY WHAT YOU WANT IN THIS LIFE. To subscribe send an e-mail to to reach Katheryn ph 201 970-9340 or


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