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Building a Small Business Budget from the Bottom Up 
 
by kmhagen June 14, 2005

Start-up Requirements

Budgets are not all the same, and there is no standard format. Different types of budgets can be prepared for different purposes. One way to start, especially for a new business, is to prepare two separate budgets – one for start-up costs and capital expenditures, and another for the initial operating phase.

Organization costs

Part of a small business's start-up costs are organization costs to get the business set up. Organization costs may include legal fees and expenses, notary fees, licenses and registrations, tax consulting and others. These costs will depend on the legal structure you select for your business, and your line of business. For example, setting up a sole proprietorship will probably not involve significant legal costs, since it is not necessary to set up a separate legal entity. But legal costs may be more significant for a partnership, and even more so if the business is set up as a corporation. Attorneys should be able to estimate the cost of setting up a partnership or corporation.

If your business requires a commercial license or other type of operating permit, information about the cost should be available from the municipality or other legal jurisdiction in which the business will operate.

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