The Rudiments of starting a Business in Today’s Economy

By Sarah M. Asio, Texas Tech University.

Hard economic times! There is a common notion today that the economic times are hard and breaking even is difficult, if not impossible, for the average entrepreneurial initiative. As if finding a job was not already tough for the new graduate, getting started on a business venture is even tougher and daunting for the inexperienced entrepreneur. So how does one begin? According to the U. S. Small Business Administration – SBA (www.sba.gov) the first step is to determine expenses for the start-up and apparently, it is not rocket science. With some help from “Engineering Economics” fundamentals on cost estimation techniques for both capital and regular expenses, and a simple two-stage process suggested by SBA, one can begin by estimating initial start-up costs such as:

  • Incorporation Fees
  • Permit and/or License Fees
  • Down-payment on office space or rent for a commercial lease
  • Office furniture and supplies
  • Initial inventory
  • Signage, Business cards and stationary
  • IT/computer equipment

Followed by estimating on-going costs or regular expenses such as:

  • Inventory
  • Your salary, employee salaries, wages, and commissions
  • Rent, Utilities, Internet, phone, etc.
  • Professional services, such as an accountant and a lawyer
  • Taxes and Insurance
  • Marketing and Advertising
  • Website hosting and maintenance
  • Loan Payments.

(http://www.sba.gov/community/blogs/community-blogs/small-business-cents/how-much-money-do-i-need-guide-estimate-your-st).

After estimating costs the task of identifying sources of capital follows. While a few entrepreneurs have convinced the investors on “Shark Tank” that they are worth a shot, what happens to the other 99.9% plus that cannot make it to the TV show? One can always begin by looking at their own savings or personal Income to determine what proportion of the costs they can cover, followed by other avenues such as loans, investors, and to bring it closer to home – relatives (although this comes with its own pros and cons that will be left for a future discussion). Similarly, Investors come with their share of demands, among which is a percent stake in equity; let alone the need for the entrepreneur to show a clear road-map to profitability and the break-even point of the venture.

Unlike well established Non-profit corporations which may be unscathed by tumultuous economic cycles and are not necessarily under pressure to break-even, profit –making firms cannot afford the same luxury. The typical CEO may be wringing his/her hands and ardently trying to figure out how the firm can breakout with the next new product or service that will give the company a competitive edge. This presents opportunities for start-ups to pitch business ideas to industry power players and hopefully set off on a high gear if all goes well rather than risk being squeezed out of the market by long-standing establishments. Apart from the financial considerations presented here, an entrepreneur would require formal and legal advice from experts such as certified accountants, lawyers, business analysts, and perhaps a board of directors or trustees.

Share your thoughts or comments below. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above? Identify a technique relevant to each cost item. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

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  1. #1 by Jonathan Ohara on April 16, 2014 - 10:00 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    • You could use any cost estimation technique relevant to the type of costs: the single payment ones likely using present worth analysis (NPC), and the continual costs using an annuity analysis (EUAC).

    2. Identify a technique relevant to each cost item.
    Use Net Present Cost (NPC):
    • Incorporation Fees-
    • Permit and/or License Fees
    • Down-payment on office space or rent for a commercial lease
    • Office furniture and supplies
    • Initial inventory
    • Signage, Business cards and stationary
    • IT/computer equipment
    ________________________________
    Use Equivalent Uniform Annual Cost (EUAC):
    • Inventory
    • Your salary, employee salaries, wages, and commissions
    • Rent, Utilities, Internet, phone, etc.
    • Professional services, such as an accountant and a lawyer
    • Taxes and Insurance
    • Marketing and Advertising
    • Website hosting and maintenance
    • Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    • First of all, I would make sure the product or service is something people really want or need. Then I would find out what barriers to entry exist for such a business. Next I would try to visualize the future of the company/business (i.e. is the startup going to last?).I would make sure that I can spread the word for my business, and willing to let have demonstrations/samples to get the product out there. Another necessary strategy I would use is to be flexible to changing my business plan/model. Last but not least, I would find ways to minimize cost, preferably without cutting corners.

    • #2 by Amber Coffman on April 23, 2014 - 8:05 pm

      1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
      When deciding which cost estimation techniques I would use, I would first classify my cost accordingly. I would choose semi-detailed estimate so that I could get an accurate estimate for budgeting. I would use the net present cost analysis and equivalent uniform annual cost analysis to help estimate and determine the present and future value.

      2. Identify a technique relevant to each cost item.
      Net present cost analysis would be used on costs that are relevant at the time being:
      -Incorporation Fees
      -Permit and/or License Fees
      -Down-payment on office space or rent for a commercial lease
      -Office furniture and supplies
      -Initial inventory
      -Signage, Business cards and stationary
      -IT/computer equipment

      Equivalent uniform annual cost analysis would be relevant for costs that are going to be continuous costs which are:
      -Inventory
      -Your salary, employee salaries, wages, and commissions
      -Rent, Utilities, Internet, phone, etc.
      -Professional services, such as an accountant and a lawyer
      -Taxes and Insurance
      -Marketing and Advertising
      -Website hosting and maintenance
      -Loan Payments.

      3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
      First I would create a detailed budget of with all the costs integrated into the overall budget and make sure an estimation on the revenue that will be generated to make sure that this is an ideal business plan. I then would become aware of all the initial costs and make sure that the appropriate loans could be attained. After all the starting fees were taken care of then I would make sure that the upcoming revenues would cover the continuous costs.

  2. #3 by Madeline Bergmann on April 17, 2014 - 2:44 pm

    1. Cost estimation techniques vary depending on the accuracy required. Here we would probably use semi-detailed estimates for budgeting purposes since the project is in the preliminary design stage. This requires more time and resources to get a more accurate estimate. The initial start-up costs can be determined after weighing numerous options to find the best deal then getting quotas and prices. It is important to save money during the initial phase since there will be no income at the time so more effort should be put into getting the best prices. On-going costs may depend on monthly sales such as salary, marketing, and advertising so one must consider potential income when calculating these prices and rates. There is no specific way to determine these fluctuating costs so one can research various salary and marketing formulas until one works well. Typically, Net Present Cost analysis and Equivalent Uniform Annual Cost will be useful in discovering the amount of money you need to save in order to afford this investment. Also, if possible, it may be helpful to hire a small business accountant to assist you in planning your finances. You may also need to come up with multiple budge plans in case unexpected costs occur.

    2. The Net Present Cost technique will be used on all initial costs since it will be used at year zero in present time, this includes the incorporation fees, permit and/or license fees, down-payment on office space, office furniture and supplies, initial inventory, signage, business cards and stationary, and computer equipment. The Equivalent Uniform Annual Cost will be used on the on-going costs so that the annual income can also be taken into account, this includes inventory costs, salaries, commissions, rent, utilities, internet and phone services, professional services, taxes and insurance, market and advertising, website hosting and maintenance, and loan payments.

    3. In order to be able to afford starting up and maintaining your business you may need to consider loans from banks and/or family members in addition to your savings. Another idea would be to pitch your business proposal to big corporations to avoid the risk of having to compete with them. Also, keeping your product new and updated and guaranteeing customer satisfaction can help with sales and ensuring your business breaks even.

  3. #4 by Akshay Ahuja on April 18, 2014 - 1:25 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    I would use the internal rate of return cost estimation technique because this is where Present Worth of costs and Present Worth of benefits equal each other, which in other words means that there is a higher chance to breakeven with investments in new services and new products. I would also implement the Benefit-Cost Ratio cost estimation technique because the costs (consequences) listed above are either dealing with the public sector or the government.

    2. Identify a technique relevant to each cost item

    Use Internal Rate of Return for:

    • Loan Payments
    • Inventory
    • Your salary, employee salaries, wages, and commissions
    • Rent, Utilities, Internet, phone, etc.
    • Professional services, such as an accountant and a lawyer
    • Taxes and Insurance
    • Marketing and Advertising
    • Website hosting and maintenance

    Use Benefit-Cost Ratio for:

    • Incorporation Fees
    • Permit and/or License Fees
    • Down-payment on office space or rent for a commercial lease
    • Office furniture and supplies
    • Initial inventory
    • Signage, Business cards and stationary
    • IT/computer equipment

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    The first strategy I would use is to take care of any fixed costs such as “rent, insurance, utilities, internet, and phone.” This first strategy is significant because in order to sell your first product or service you must take care of these fixed expenses. Secondly I would utilize a strategy to cover recurring costs such as labor and delivery costs. Finally, I would strategize a plan to establish a unit price that is affordable for the demanders of the product or service I am providing as an entrepreneur.

  4. #5 by Juan pedro Ondo Nguema Nandung on April 19, 2014 - 2:38 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed below?
    First of all, I’ll classify the costs according to their type; The single payment ones, I’ll use Net Present Worth (NPW) analysis, and the rest, continuous costs items, I’ll use Equivalent Uniform Annual cost(EUAC).

    2. Identify a technique relevant to each cost item
    I’ll use (NPW) analysis for the items listed below
    Use Net Present Cost (NPC):

    Incorporation Fees-
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment
    And for the continuous cost items I’il use (EUAC), and these items are listed below:

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3.what strategy or strategies would you adopt in order to increase chances of breaking even in business start-up?
    The first thing to do is to study the market and see what product or services are demanded, meaning studying of the market movement, then try to find out what are the difficulties to bring this product or service in this market,visualize the future, that’s mean try to estimate the benefits in the future and lastly see if the business maximize the benefits and minimize the costs as the principal objective of any company.

  5. #6 by Robert Conley on April 20, 2014 - 12:19 pm

    1) From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    From an Engineering Economics perspective, I’d go with the Net Present Costs Method (NPC) for all of the initial expenditures for the business venture and I’d go with the Unit Annual Costs to compute annuity costs (EUAC) for the expenditures that will reoccur over time.

    2) Identify a technique relevant to each cost item.

    NPC would help me calculate the present costs of initial investments such as start up fee, the office space, equipment for the offices, permits, furniture, stationary, etc. I’d want to use the EUAC to get an idea of my annual costs such as salaries, company costs, rent/leasing expenses, utilities/electric/gas bills, marketing, domain maintenance and upkeep, etc.

    3) What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    I would make sure all of the rudimentary things such as my costs of business like those mentioned for initial investments was taken care of first and foremost before venturing to excel in getting my product/service, that I’m trying to create a demand for, ready for the market. Once that’s done, I create a marketing campaign via the web and through ad to get my product’s usability out to the public and have a price ready to match the incoming demand as well as break-even with the initial costs after a certain period of time.

  6. #7 by danbrown on April 20, 2014 - 5:59 pm

    1. Cost Estimation techniques that would be beneficial to me as an entrepreneur for a start-up company would be techniques that allow me to look at my estimated costs. Before I can begin to start a business, I need to know that I can financially achieve it. Two techniques that could help me figure this out would be Net Present Cost for line items that are paid once and Estimated Uniform Annual Cost which could help me with the costs that are continuous and paid over time.

    2. The Net Present Cost would cover line items such as Incorporation Fees, Permit or License Fees, Down-Payment on Office Space or Rent for a Commercial Lease, Office Furniture and Supplies,Initial Inventory, Signage, Business Cards, and Stationary,IT, and Computer Equipment.
    The Estimated Uniform Annual Cost would cover line items such as Inventory, Salaries and Employee wages, Rent, Utilities,Taxes and Insurance, Marketing and Advertising, Website Maintenance, and Loan Payments.

    3. To increase my chances of breaking even with my company I would look at the situation at every possible angle. I would look at it from a financial standpoint…can I actually afford to start up this business? From a creativity standpoint…does this product that I want to introduce to society have any major competitors and if so, is my product superior to what’s already in the market? in order to come out with a new product and have it be a success I need to know what I’m competing against and how much it will cost me now and in the future. I would also like to estimate my benefits as well to see if the business is worth all the time and money spent on creating it.

    • #8 by Danielle Brown on April 20, 2014 - 6:01 pm

      Hi Mrs. Asio. I put my Eraider Username. This post is by me Danielle Brown from your 3pm class

  7. #9 by Danielle Brown on April 20, 2014 - 6:16 pm

    1. The Cost Estimation Techniques that I would use to figure out my cost estimates would be Net Present Cost and Estimated Uniform Annual Worth. These techniques would help me figure out how much financially I would need to spend on items that have single payments and on items that are paid continuously over time.

    2. The line items such as Incorporation Fees, Permit or License Fees, Down-Payment on Office Space or Rent for a Commercial Lease, Office furniture and supplies, Initial inventory, Signage, Business Cards, and Stationary, IT and Computer Equipment would all be covered by NPC. Line items such as Inventory, Salaries and Employee Wages, Rent, utilities, Taxes and Insurance, Marketing and Advertising, Website Maintenance, and Loan Payments would be covered by the EUAC.

    3. In order to break even successfully with my business, I would need to know if I could creatively and financially achieve this. Creatively, I would want to make sure that my product isn’t already created or have something similar to it on the market. I would also want to know it’s major competitors and make sure my product is superior so it won’t be rejected by consumers. Also financially I would want to know my benefits so that I can determine whether or not my business is worth the time and money spent creating it.

  8. #10 by Jonathan Taylor on April 20, 2014 - 7:16 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    For the initial start-up costs, you would obviously want to use the present worth method, as all of those costs are incurred one time only, and in the present time. However, if you were developing this budget for a business that you are wanting to start up in a few years, a future worth analysis would be the smarter option, as the price of goods and services generally increase with time.

    It is tempting to want to use the Equivalent Uniform Annual Cost (EUAC) method for estimating the on-going and regular expenses. However, most of these costs will be incurred on a monthly basis, not an annual one. For that reason, the EUAC would need to be modified into an Equivalent Uniform Monthly Cost method, which will be referred to as EUMC.

    2. Identify a technique relevant to each cost item.

    For all initial and one-time fees, I would use either the Present Worth Analysis or the Future Worth Analysis, depending on the time frame. These costs include:

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    All on-going costs and regular expenses should be estimated using either the Equivalent Uniform Annual Cost or Equivalent Uniform Monthly Cost methods, depending on whether they are a monthly or annual expense. These costs include:

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    The first strategy I would use is to be real with myself. I would ask myself questions such as: “Is this a quality product that people are going to want?”, “Do I have the knowledge to run an effective business?”, and “Will this business be something people will want to invest in?”. Secondly, in order to make breaking even easier you need to borrow as little money as possible. Only buy the bare essentials needed to make your business perform; the fancy office equipment can be saved for when the business actually has some capital. Finally, be prepared to not get paid the first year or two. Many individuals that start a new business have to sacrifice their own salary in order to make sure the bills are all paid.

  9. #11 by Deana Brown on April 20, 2014 - 10:05 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    Just like there are a variety of costs involved, there are also a variety of cost estimation techniques one can use to provide estimates. However, the one that I would most likely use would be the payback & breakeven analysis. The payback period is defined as the period of time required for the cumulative profit to equal the cumulative cost of the investment. This would allow you to prioritize what costs you can tackle first.

    2. Identify a technique relevant for each cost

    I would use the net present cost (NPC) technique for the initial costs
    •Incorporation Fees
    •Permit and/or License Fees
    •Down-payment on office space or rent for a commercial lease
    •Office furniture and supplies
    •Initial inventory
    •Signage, Business cards and stationary
    •IT/computer equipment

    I would use the equivalent uniform annual worth (EUAW) technique for the on-going costs
    •Inventory
    •Your salary, employee salaries, wages, and commissions
    •Rent, Utilities, Internet, phone, etc.
    •Professional services, such as an accountant and a lawyer
    •Taxes and Insurance
    •Marketing and Advertising
    •Website hosting and maintenance
    •Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    With any business start-up, you want to make sure that you have great foundation so it can survive the initial wear and tear of being a brand new business. The first thing I would do is to make sure all my initial costs were taken care of. Then, I’d make sure that my fixed costs were under control. These two steps are crucial because in order to sell new products, all these costs must first be addressed.

  10. #12 by Shreyas Salvi on April 21, 2014 - 12:51 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    All the initial fees and start-up cost can be calculated using the Net Present Worth Analysis (NPW) and that will give you how much you are required to pay initially. The remainder of your costs such as your on-going costs as well as your regular expenses can be calculated using the Equivalent Uniform Annual Cost (EUAC).

    2. Identify a technique relevant to each cost item.
    All of the following are considered initial costs or one-time costs therefore the appropriate technique to use would be the Net Present Worth Analysis. To calculate the value at the end of the lifetime, I would consider using the Future Worth Analysis as well-
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    All of these following payments are considered fixed annual payments and would use Equivalent Uniform Annual Cost-
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    Whenever starting a business, it is essential to know what you are getting into. Having a good idea of all your costs and expenses within the time period you predict to be running your business is necessary to know if your company is fit to survive. To do this, I would consider all my one-time payments, including my initial costs, final costs, and any one-time payments in between. After knowing this, I would calculate ongoing costs and expenses. Once I have a fixed number per time period, I will be able to give a rough figure of how much of a profit it will take to break-even. As long as I know my companies financial plan roughly, the business should be able to run smoothly.

  11. #13 by Alfredo Castaneda on April 21, 2014 - 3:47 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    From an “Engineering Economics” perspective, I would use net present costs (NPC) and estimated uniform annual costs (EUAC) as my cost estimation techniques. NPC will be used for the initial single cost and EUAC will be used for the additional continual costs that follow.

    2. Identify a technique relevant to each cost item.

    I would use NPC for incorporation fees, permit/licenses fees, down-payments, rent for a commercial lease, office furniture/supplies, initial inventory, business cards and IT/computer equipment. I would use EUAC for inventory, salaries, rent/utilities/internet/phone, professional services, taxes/insurance, marketing/advertising, website costs and loan payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    I would set up an equation that subtracts costs (from inventory, salaries, bills, taxes, etc.) from revenue per unit and set it equal it to zero. With this equation I can calculate how much product needs to be sold to break even. Once I solve for equation, I now have a goal to reach. And to reach goal faster, you have to invest to gain, such as advertising and marketing.

  12. #14 by Adam Stevens on April 21, 2014 - 3:55 pm

    1) From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    From this perspective, I’d most likely choose the Net Present Worth Analysis Method for all of the initial expenditures for the business venture. For the expenditures that would be reoccurring over time I would choose the Estimated Uniform Annual Costs Method to compute annuity costs.

    2) Identify a technique relevant to each cost item.

    I would use Net Present Costs technique for the initial costs of: Office space payment or rent, furniture and office supplies, initial inventory, business cards and stationary, incorporation fees, permit and licensing fees,and IT & computer related equipment.

    I would then use Equivalent Uniform Annual Costs technique for: Salaries, wages, commissions, rent, utilities, internet, inventory, professional services hired, insurance and taxes, website hosting and maintenance, marketing and advertising, and loan payments.

    3) What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    When a person or group of people decide to start a business it is essential to know exactly what he/she/they are getting into, meaning you need to have a good idea of all the costs and expenses that are going to take place while running said business. First, I would make sure all of the primary things such as my costs of business like those mentioned for initial investments are taken care of before trying to get my product and/or service started. Next, I would create some type of marketing campaign either via the internet or through television and I would make sure to get my product’s usability out into the public eye with a price ready to match the incoming demand as well as having a break-even with the initial costs after a certain period of time. Also one cannot forget to consider all one-time payments and expenditures that will happen over time in order to estimate the costs of previously said product(s). Assuming all information was accounted for and the product is one which is in demand the business should run rather smoothly by taking all these things into account.

  13. #15 by Carlos on April 21, 2014 - 4:47 pm

    1.) From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    Equivalent uniform annual worth (EUAW), and net present worth (NPW), are two viable options for getting rough estimates of the cost of the business venture. With both of these techniques a minimum attractive rate of return can also be used or calculated, this would be extremely helpful if you are seeking help from investors, as they are looking to make a profit from their initial investment. These techniques also allow annual costs and one time costs to be converted from one to the other allowing all expenses to be included easily into the analysis.

    2.) Identify a technique relevant to each cost item.

    The followings costs are more suited to a net present worth analysis technique or net present cost in this case.

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    The following costs are more suited to a equivalent uniform annual worth technique, or an equivalent uniform annual cost technique in this case.

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3.) What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    First and foremost a good analysis of the business venture. If your business model is not feasible then there is no point in going forward and having a business that will be unable to break even. Secondly is ensuring the product or service being sold by this business is one that can actually turn a profit and continue to turn a profit. All the analysis and planning in the world won’t help if your product or service simply does not sell. So in short making sure your business plan is viable through economic analysis is key, as well as making sure you have a product with a good demand behind it.

  14. #16 by Kelsey Young on April 21, 2014 - 6:20 pm

    1. Initial start-up costs should be calculated using present worth analysis. On-going costs should be estimated using equivalent uniform annual worth analysis. The expected rate of inflation that will affect the cost of materials and price of labor should also be accounted for when considering costs that are expected to occur for many years into the future.

    2. The following cost items should all be analyzed using present worth analysis:

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    The following items should all be analyzed using equivalent uniform annual worth:

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3. When starting a business, it is of course vital to minimize costs and maximize revenue. However, the present and future worth of the assets acquired at start-up should be optimized according to budget. For example, expenses should not be spared when it comes to aspects such as marketing and advertising, which, if employed quickly and skillfully, will greatly increase revenues from the very beginning of a business’s economic life.

  15. #17 by Ahmed Ghayad on April 21, 2014 - 9:01 pm

    From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above
    -I will consider Net Present Worth analysis (NPW) for single costs that are paid only once as well as Equivalent Uniform Annual cost (EUAC) for the continuous costs that are paid in a regular time period and are repeated constantly.

    Identify a technique relevant to each cost item.
    Net Present worth Analysis (NPW) to calculate the initial capital needed to start the project

    -Incorporation fees
    -Permit and License fees
    -Down payment or rent for a commercial lease
    -Office furniture and supplies
    -IT and computer equipment’s
    -Signage, Business cards and stationary

    Equivalent Uniform Annual Cost (EUAC) to calculate the ongoing costs that is paid continuously.

    Rent, Utilities, Phone and Internet services
    Marketing and advertising
    Website hosting and maintenance
    Taxes and insurance
    Loan payments
    Salary, wages and commissions
    Inventory

    What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    -Make sure that business is unique and will offer goods or services that appeals to customers. Have special offers in the business that is different than other competitors. Also have a plan for growth that will increase the chance of breaking even. Take the time to invest in preparing financial projections and test all business assumptions. Try to minimize the costs by choosing the cheapest that will get the job done. Considering marketing and advertising because it will play a vital role in increasing the revenue and spreading public knowledge about the business.

  16. #18 by hugoreynoso on April 21, 2014 - 10:37 pm

    1. Any of the expenditures that have a one time investment are best estimated using the Net Present Cost analysis to try and get a reasonable estimate on what the value is at the moment. A Uniform annual cost method is more suited for the recurring cost over time to insure the growth of interest over time is accounted for.

    2. For present cost analysis:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment
    For EUAC:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.
    3. The best first step in making sure that your business stays in the black is seeing how long you can go under-profit before it becomes unsustainable. Investments are long term by the very nature of the work so if returns are to be had then there has to be a period of time in which monthly losses must be accepted. This is where economic analysis comes into play in calculating how thin you can spread you wallet and still expect a return.

  17. #19 by Nikita Maryasov on April 21, 2014 - 10:39 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    The initial start-up costs would be calculated using the Net Present Worth to determine single payment amounts and Equivalent Uniform Annual Worth to determine continuous payment amounts for the ongoing and regular costs.

    2. Identify a technique relevant to each cost item.

    Net Present Worth:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    Equivalent Uniform Annual Worth:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    Always weigh-in factors such as depreciation, taxes, loans (How much to take out, what %, RoR, whether it can be handled). Also, try not to take out any loans if possible. Try to maintain a steady rate of income/costs, even if you cannot break even, if something can be made back with profit, do not exclude such an option, if all else fails, the do nothing approach can be best (Or just not start up a business in general if you cannot handle it).

  18. #20 by Quoc Nguyen on April 22, 2014 - 12:27 am

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    Based on all the cost given , they can determine which one is either initial cost or annual cost.
    Initial Costs are only incurred only one time when the business starts; in other worlds companies have to have at least this amount of money in their budget when they start their business. To eliminate the initial cost, they can used the net present worth (NPW).
    Annual Costs are those extra costs or expansion fees in manufacture processing. Companies need to balance their benefits cost ( benefit cost = revenue cost – annual cost) and annual cost. The growing companies are those have benefit cost is higher than annual cost. To eliminate the annual cost, they can use Equivalent Uniform Annual Cost. In addition, they also use the Equivalent Uniform Monthly Cost (EUMC); therefore, they can keep track their business easily.
    2. Identify a technique relevant to each cost item.
    Initial Cost: Incorporation Fees, Office furniture and supplies, Initial inventory, Signage, Business cards and stationary, IT/computer equipment, Permit and/or License Fees, Down-payment on office space or rent for a commercial lease.
    Otherwise, the business also needs to deal with the annual cost.
    Annual Cost: Inventory, Your salary, employee salaries, wages, and commissions, Rent, Utilities, Internet, phone, etc, Professional services, such as an accountant and a lawyer, Taxes and, Insurance, Marketing and Advertising, Website hosting and maintenance, Loan Payments.
    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    Strategies:
    – Analyzing the market demand and supply, before starting making the product. Price is also a big thing that any business needs to deal with. Using demand and supply chart to figure out the equilibrium price. Determining, your customer, their age, budget, style, ect.
    – Eliminating the project is either short term or long term project. If the project is long term, the company should have a huge investment budget. By realizing a potential project, they also try to get the donation or investment from government or other resources.
    – Finding the best way to advertise your product to the customer such as commercial, poster, magazine, newspaper.
    – Focusing on the product quality and always improve the products.

  19. #21 by Erika Matheney on April 22, 2014 - 1:11 am

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above

    -For all of the start up costs that are only have to paid once I would use the net present worth analysis to find an estimate of the initial costs and for the on-going costs I would use equivalent uniform annual cost to find a rough annual cost.

    2. Identify a technique relevant to each cost item.

    -Use net present worth analysis for all start up/ 1 time costs
    Incorporation Fees, Permit and/or License Fees, Down-payment on office space or rent for a commercial lease, Office furniture and supplies, Initial inventory, Signage, Business cards and stationary, IT/computer equipment

    Use equivalent uniform annual cost for all yearly/ repeating costs such as
    Inventory, Your salary, employee salaries, wages, and commissions, Rent, Utilities, Internet, phone, etc., Professional services, such as an accountant and a lawyer, Taxes and Insurance, Marketing and Advertising, Website hosting and maintenance, Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    – I would make sure that my company was original in some way to give an edge over competition. I would also make sure that the company was aimed at a certain demographic because many start up companies try to appeal to too many people and it hurts them in the long run. I would keep all start up expenses to a minimum and annual costs as low as possible until the company began making money. As much of the start up cost that I could pay out of pocket I would to avoid borrowing too much money and being in debt for a long time. The most important part would be to have a desirable product or else your company will never thrive.

  20. #22 by Joseph Howard on April 22, 2014 - 1:56 pm

    1. There are a multitude of techniques to estimate costs, the most prominent methods are the “net present worth” (NPW) and “equivalent uniform annual worth” (EUAW).

    2. NPW is better suited for non-recurring costs such as incorporation fees, permit and/or license fees, down-payment on office space or rent for a commercial lease, office furniture and supplies
    Initial inventory, signage, business cards and stationary, and IT/computer equipment.

    EUAW is better suited for recurring costs such as inventory, your salary, employee salaries, wages, and commissions, rent, utilities, internet, phone, professional services (such as an accountant and a lawyer), taxes and insurance, marketing and advertising,w ebsite hosting and maintenance, loan payments.

    3. My main strategy would be to analyze the various ways I could go about paying for this business and pick the most cost effective way. But this would be useless if no one knows about your business. In order to get the word out I would use the most powerful tool known to man, the internet. Through the internet you can connect to more people than you could imagine.

  21. #23 by Dustin Clevinger on April 22, 2014 - 3:50 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    Net Present Worth (NPW) would be used to estimate the initial, one-time start-up costs. Equivalent Uniform Annual Worth (EUAW) would be used to estimate the annual on-going expenses.

    2. Identify a technique relevant to each cost item.
    Net Present Worth (NPW):

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    Equivalent Uniform Annual Worth (EUAW):

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    In order to break even or make a profit, someone starting a business should maximize profits/benefits, while minimizing costs.

  22. #24 by Jared Reinecke on April 22, 2014 - 4:54 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    -For the initial costs the most appropriate technique would be Net Present Worth Analysis (NPW). This will give me an idea of what will be needed to start the business. Then for the ongoing costs every year an Equivalent Uniform Annual Cost (EUAC) would be best.

    2. Identify a technique relevant to each cost item

    For the following costs below Net Present Worth Analysis is what I would use.

    •Incorporation Fees
    •Permit and/or License Fees
    •Down-payment on office space or rent for a commercial lease
    •Office furniture and supplies
    •Initial inventory
    •Signage, Business cards and stationary
    •IT/computer equipment

    For the following Costs below that will incur annually I would use Equivalent Uniform Annual Cost (EUAC).

    •Inventory
    •Your salary, employee salaries, wages, and commissions
    •Rent, Utilities, Internet, phone, etc.
    •Professional services, such as an accountant and a lawyer
    •Taxes and Insurance
    •Marketing and Advertising
    •Website hosting and maintenance
    •Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    – In order for me to break even I would first want to make sure the product I am making is in high demand, and in some way unique. Making sure the market looks good for this product is essential, if no one is buying it, then there Is no point in manufacturing it. I also want to make sure I am able to turn a profit, minimizing costs and maximizing profits is imperative. If any of these steps are overlooked the business will be unsuccessful, and breaking even will be out of the question.

  23. #25 by Kylee Rodriquez on April 22, 2014 - 6:56 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    -For the costs at year 0 and all initial costs one would use the Net Present Worth Analysis, and for recurring cost that are made annually one would use Equivalent Uniform Annual Cost.
    2. Identify a technique relevant to each cost item.
    -Net Present Worth Analysis:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    -Equivalent Uniform Annual Cost:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    -The strategies one should use in starting a business and increasing the chance of breaking even are: making sure your product will sell in the long run and make a profit, making sure the product is in demand and that it is a want or need by a majority of people, having a back-up plan if your first plan fails, and making sure you have the funds to back up your business. Aside from these four things the entrepreneur’s knowledge in business and how the economy works as a whole are just as important.

  24. #26 by Austin Waterman on April 22, 2014 - 8:27 pm

    1. For starting a business, estimating is one of the most crucial steps in order to progress in the right direction. For budgeting purposes semidetailed estimates would provide the greatest balance of accuracy, time and resources. For the start up costs the best method would be net present worth because it estimates all the cash flows relating the future to now giving a better idea than using for instance payback period because it does not account for money declining over time due to things such as inflation. For the continuing costs, Equivalent uniform annual costs would be best because it accounts for the annual costs (which can be converted to monthly) of things such as salary and if needed, can relate to equivalent uniform annual worth for more detail.

    2. For NPW:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    For EUAC/EUAW:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3. To increase the chances of breaking even in a start-up, everything comes down to planning. Planning is what makes and breaks the business. Incorporated into this is also the right balance. The right balance in costs, loans, investments, estimating, etc. To get the best chance, instead of using a semidetailed estimate, it would need to be conformed to a detailed estimate increasing the accuracy. In order to appease this, the methods as described above as well as combining other methods of analysis such as, break even, benefit-cost, comparing rate of returns of different business plans, etc. Also examining the market, understanding who your customers are and what kind of price mark up fits best in this demographic. With the right plan, the best data can be show, increasing the chances of more investors, which will decrease the amount of loans needed, increase the profit and minimize the costs.

  25. #27 by Leandro Pereyra Vera on April 22, 2014 - 8:39 pm

    1.Initial start-up costs should be calculated using present worth analysis. On-going costs should be estimated using equivalent uniform annual worth analysis. The expected rate of inflation that will affect the cost of materials and price of labor should also be accounted for when considering costs that are expected to occur for many years into the future.

    2. Identify a technique relevant to each cost item
    I’ll use (NPW) analysis for the items listed below
    Use Net Present Cost (NPC):
    a.Incorporation Fees-
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment
    And for the continuous cost items I’il use (EUAC), and these items are listed below:
    b.Inventory
    salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3.Take care of any fixed costs such as “rent, insurance, utilities, internet, and phone.” This first strategy is significant because in order to sell your first product or service you must take care of these fixed expenses. After that I would plan for a strategy to cover recurring costs such as labor and delivery costs. Finally, I would strategize a plan to establish a unit price that is affordable for the demanders of the product or service I am providing as an entrepreneur.

  26. #28 by James Tabije on April 22, 2014 - 8:57 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    Answer: For the overall calculation of costs, the simple methods of Net Present Worth (NPW) and the Equivalent Uniform Annual Worth (EUAW) with can be used to find the costs any business would face during startup. The Net present worth can be used to analyze and calculate single-payment costs, which are very prevalent during start-up, and the (EUAW) analyzed costs that repeatedly occur at some rate. For further analysis, one can use this method to also convert reoccurring costs to NPW analysis, to offer a better outlook on the budget needed to start a business.

    2. Identify a technique relevant to each cost item.

    Answer: As said before, the net present worth method can be applied to single-payment type costs. Some examples include:

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    Additionally, with the inclusion of reoccurring costs, the NPW method can also be used here, though this method can be quite tedious and sometimes, very time consuming. So, the EUAW can be used to calculate costs quickly and efficiently. Some examples this technique can be used on include but are not limited to:

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    Answer: In addition to those cash flow analysis technique above, one can also employ the use of other techniques (such as Break even analysis, cost/benefit ratio, Incremental rate of Return, etc.) to calculate and predict exactly how much action to take in order to make their company break even. I think first and foremost in order to think of starting a business, one needs to confirm there is a sizable chance that the business with be able to support itself once initiated. This requires much preparation in the entreprenuer’s part and negligence is extremely costly (a mistake that’s often seen in shows like Shark Tank and Dragon’s Den). I would create a product aimed at the market that will be something that will be good enough to create a sizable demand. After that’s initiated, I would make sure to find ways to produce these supplies at high quality and volume, with relatively low cost. One can use the techniques i mentioned above for assistance.

  27. #29 by John Riggle on April 22, 2014 - 9:57 pm

    From an Engineering Economics perspective, I would use Net Present Worth (NPW) and Equivalent Uniform Annual Costs (EUAC) depending on which costs are being considered. Net Present Worth should be used on all initial start-up costs, while Equivalent Uniform Annual Costs should be used on continuous yearly, or annual, costs.

    To be more specific I would use NPW on the following:
    • Incorporation Fees
    • Permit and/or License Fees
    • Down-payment on office space or rent for a commercial lease
    • Office furniture and supplies
    • Initial inventory
    • Signage, Business cards and stationary
    • IT/computer equipment

    I would use EUAC on the following:
    • Inventory
    • Your salary, employee salaries, wages, and commissions
    • Rent, Utilities, Internet, phone, etc.
    • Professional services, such as an accountant and a lawyer
    • Taxes and Insurance
    • Marketing and Advertising
    • Website hosting and maintenance
    • Loan Payments.

    Although certain costs can be considered under either category, for the most part this analysis should suffice.

    In order to break even as a business start-up there are several key factors that can assist immediate success. First, it is essential to know if there is a demand for your business or not. Without demand, business can’t run successfully. Next, it is important to know who you are marketing towards. Once you identify your usual customers, one can properly market and advertise for them. Obviously, the service being offered or goods being sold must be quality. If someone has a bad experience with your company, they tell eight people on average, while if they have a good experience they only tell one person. This vouches for the fact that quality service and customer service are essential. Equally, if not more important, is cutting costs. As an owner of a business that has recently started, I would say this is crucial to not falling into debt early. If money is not properly managed and is misspent, a start-up company will have a hard time trying to stay afloat. Nothing ever goes perfectly as planned. Finding ways to save on shipping or turning waste into profit are two ways to assist a company financially. For example, I own an Apple Repair Company that repairs all apple devices. To reduce costs and improve profit margins, I buy all my parts in bulk and sell the cracked screens back to iPhone refurbishing plants. There is not a golden path to making a profit in a start-up company, but cutting costs, marketing efficiently, and offering quality service certainly help. If your iPhone screen is cracked or have a bad battery, check us out! http://www.greekgeeksttu.com (806) 410-0809

  28. #30 by Tommy on April 22, 2014 - 10:18 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    Yo
    You could use the net present worth analysis (NPW), which is subtracting the costs from the benifits. Also, I would use the continual costs technique as an annuity analysis (EUAC), is the cost per year of owning, operating, and maintaining an asset over its lifetime.

    2. Identify a technique relevant to each cost item.
    Net Present Worth (NPW)
    Franchise fee
    Permit and/or License Fees
    Initial expenses (Building, furniture, supplies, signs)
    IT/computer equipment

    Equivalent Uniform Annual Cost (EUAC):
    Inventory
    Salaries
    Bills (Rent, utilities, fees)
    Marketing/Advertising
    Taxes
    Website

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    As an entrepreneur myself, it has always been my dream to own my own business. As I begin to brainstorm ideas of a business I would make sure I am able to create a company that is different than anything else on the market. The most important part of a business is service. For example, Chick-fil-a, their product is not better than their competitors but their service is unlike any other business. With great service comes great business because word of mouth is a powerful thing. Marketing is a great tool but without great service your clients will come one time and if they did not enjoy their experience they will not come back. The last strategy I would use is sticking to your business plan. I continue to use Chick-fil-a as an example because it is one of the most profitable fast-food restaurants. Their business model is chicken. Throughout the years they have stuck to what they are best at, chicken. Although they have other items on the menu they all have chicken. With great service and sticking to your original business plan I believe you will be a profitable business.

  29. #31 by Long Tran on April 22, 2014 - 11:31 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    To keep it simple, for initial start up cost, since its at time 0 on cash flow, I would use Net Present Worth analysis or just Net Present Cost since I assume a new business might not make that much benefit. For ongoing cost, I would use Equivalent Uniform Annual Cost or Arithmetic Gradient Uniform Series to estimate the cost that occur each year after 0.

    2. Identify a technique relevant to each cost item

    NPW or just NPC for:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    EUAC and AGUS for:

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance (In come tax and Taxable income technique)
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    For a business start-up to break even, I would try to maximize the benefit and minimize the cost. To minimize the cost, I first plan to choose the lowest fixed cost possible such as “rent, utilities, internet and phone” because these costs don’t change no matter what. To maximize the benefit, I would combine a good marketing and advertising with good customer service. Because customers understand there will be some problems with new business start-up, say product’s quality is not as good as expected, but with a good customer service, customers most likely will give a business a second chance. Furthermore, I would try to match my customer’s demand, provide what they need therefore I can keep my profit coming steadily.

  30. #32 by Jacob Longbotham on April 22, 2014 - 11:50 pm

    From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    From an “Engineering Economics” perspective, I would use estimated uniform annual worth (EUAW) and maybe net present cost (NPC) as my cost estimation techniques. I would use EUAW so I could estimate if my business would succeed and be profitable. I would use NPC to make sure that over the years my costs would become less and less each year.

    2. Identify a technique relevant to each cost item.

    I would use NPC mostly for initial inventory, business cards and IT/computer equipment. I would use EUAW for salaries, rent, taxes/insurance, and marketing/advertising.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    I would set up a limit on how much my company could spend each year based on my estimation so that the company should break even. I think advertising would need to be an important cost to allow business to come in. But first I would need to think whether or not I can afford it and if it is worth the investment.

  31. #33 by James Flickinger on April 23, 2014 - 12:23 am

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    I would use both Net Present Worth (NPW) and Equivalent Uniform Annual Costs (EUAC). The NPW would be used for all the initial and start-up costs, while the EUAC would be used on the continuous annual costs.

    2. Identify a technique relevant to each cost item.
    I would use the Net Present worth (NPW) for the following:

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment
    Then I would use Equivalent Uniform Annual Cost (EUAC) for the following:

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent,
    Utilities,
    Internet,
    Professional services
    Taxes and Insurance
    Marketing and Advertising
    maintenance
    Loan Payments

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    I would make sure that I am always minimizing costs and maximizing profits as much as possible. Make sure that the workers( that would include family and friends at the start) are always trying to network when the right occasion arises. Another strategy I would use for a start up business would be to advertise. There is free advertising in social media like Facebook, Twitter, etc. That way I could have brand awareness for what my business is all about and try to ingrain my logo in the consumers head, just like the apple for Apple Inc., or the famous golden arches for McDonald’s.

  32. #34 by Samuel Andrew Mata on April 23, 2014 - 12:33 am

    1) From an “Engineering Economics” perspectives, what cost estimation techniques would you use to provide estimates to the costs listed above?

    The cost estimation technique I would use for the cost provided above would be the Net Present Worth (NPW), because I think it is important to see the dollar amount of money in order to grasp the amount of money necessary to start your business, decide how you will obtain those funds (out of pocket, loans, or other), and analyze the potential gains or losses that may occur when starting up a business.

    2) Identify a technique relevant to each cost item.

    For the initial startup cost it would be best to use the Net Present worth (NPW) because those are all cost that will come immediately and would be best calculated as the amount that will be spent now, rather than later.
    For the on-going cost I believe it would be best to use the Equivalent Uniform Annual Cost (EUAC) because since all the cost will be reoccurring and would be better budgeted on a monthly, annually, or any other time period, rather than finding the money amount all at once like the NPW.

    3) What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    Strategies I would adopt to increase the chances of breaking even in a start-up business would be, have a valued or necessary product or service. Also, I would try to keep initial cost to the bare minimum, if successful grow from there, if not it reduces possible loss. Lastly I would price my product or service accordingly based on the materials need, work necessary to complete the product or service, supply and demand of my product or service, and I would select the price based on competitors, if any.

  33. #35 by David Pulver on April 23, 2014 - 12:54 am

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    Before you begin spending money for your new entrepreneurship, you can calculate all start-up costs by using the Net Present Worth analysis technique (NPW). Once the initial costs are calculated, you need to plan for the future of your new business. You can estimate the future costs by using the Equivalent Uniform Annual Cost (EUAC) technique.

    2. Identify a technique relevant to each cost item.
    You can break down all start up costs and future costs into the two analysis techniques. All initial costs can be found using NPC and include: incorporation fees, permit and/or license fees, down-payment on office space or rent for a commercial lease, office furniture and supplies, initial inventory, signage, business cards and stationary, and IT/computer equipment. All future costs can be found using EUAC and include: inventory, your salary, employee salaries, wages, and commissions, rent, utilities, internet, phone, professional services (such as an accountant and a lawyer), taxes and Insurance, marketing and advertising, website hosting and maintenance, and loan payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    If I created a product that I believe would be a marketing success, I would first attempt to sell it off to an already successful business. If they agree to sell my product and buy it off me, I could use the money gained from that as an initial investment towards future products that are similar in nature to ensure they will also be successful.

  34. #36 by Paul Phoro on April 23, 2014 - 1:26 am

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    I would utilize techniques like EUAW, FNW, NPW to help make appropriate decision that maximizes profit under numerous conditions at present and future.

    2. Identify a technique relevant to each cost item.
    EUAC:
    • O&M
    . Initial Cost
    • Wages and salaries
    • Rent, Utilities, Internet, phone,
    • Inventory
    • Taxes and Insurance
    • Marketing and Advertising
    • Loan Payments.

    NPW:
    • Incorporation Fees
    • Permit and/or License Fees
    • Down-payment on office space or rent for a commercial lease
    • Office furniture and supplies
    • Initial inventory
    • Signage, Business cards and stationary
    • IT/computer equipment

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    As a new entrepreneur, I will ask myself first the question of how soon will the business be profitable? A break-even analysis is one of the business planning tools that can help you make that determination. Learn how to calculate your break-even point and how the information can help your planning. Break even table The Break-even Analysis lets you determine what you need to sell, monthly or annually, to cover your costs of doing business–your break-even point

    The Break-even Analysis depends on three key assumptions:

    Average per-unit sales price (per-unit revenue):
    This is the price that you receive per unit of sales. Take into account sales discounts and special offers. Get this number from your Sales Forecast. For non-unit based businesses, make the per-unit revenue $1 and enter your costs as a percent of a dollar. The most common questions about this input relate to averaging many different products into a single estimate.
    Average per-unit cost:
    This is the incremental cost, or variable cost, of each unit of sales. If you buy goods for resale, this is what you paid, on average, for the goods you sell. If you sell a service, this is what it costs you, per dollar of revenue or unit of service delivered, to deliver that service. If you are using a Units-Based Sales Forecast table (for manufacturing and mixed business types), you can project unit costs from the Sales Forecast table.
    Monthly fixed costs:
    Technically, a break-even analysis defines fixed costs as costs that would continue even if you went broke. Instead, we recommend that you use your regular running fixed costs, including payroll and normal expenses (total monthly Operating Expenses). This will give you a better insight on financial realities. If averaging and estimating is difficult, use your Profit and Loss table to calculate a working fixed cost estimate—it will be a rough estimate, but it will provide a useful input for a conservative Break-even Analysis

  35. #37 by Fahad Alwuhayb on April 23, 2014 - 1:30 am

    1. from an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    1) Net present worth analysis for initial costs.
    2) Equivalent Uniform Annual Cost for recurring cost that are made annually.
    2. Identify a technique relevant to each cost item.
    -Net Present Worth Analysis:
    Incorporation Fees.
    IT/computer equipment
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    -Equivalent Uniform Annual Cost:
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Inventory
    employee salaries, Your salary , wages, and commissions, Utilities, Internet, phone, mortgage etc.
    Marketing and Advertising
    Website hosting and maintenance

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    There are many strategies that you would adopt. First, is to define your business and vision and it is the most important. Also, there are several question that you can ask yourself like, who is the customer?, what do you sell, etc. the second strategy in my opinion is writing down your goals. You can create two goals, 1/short term goal: range from 6 to 12. 2/long term goal: can be 2-5years. Explains what you want to accomplish by starting with your personal goals and then your business goals. The third strategy is learning from your competition. You may want to look at how your competitors do business before you start your own because that would definitely help you out and you learn from their mistakes and try to avoid them when you are doing your own. The fourth one is financial matters. You might want to ask yourself, how will you make money? What is your break-even point? There are two ways to help a company financially, first is finding ways to save on shipping, second, is turning waste into profit. Also, one of the important strategy is taking care of any fixed costs like utilities, insurance, mortgage etc.. you got to take care of those first in order to sell your products.

  36. #38 by Joshua Espinoza on April 23, 2014 - 4:10 am

    From an “Engineering Economics” stand point, the best estimation cost to use would be that of most relevance. for instance, using (NPW) for: license Fees, IT/ computer equipment, office furniture supplies, incorporation fees, etc.. As for : Rent, utilities, marketing, taxes, insurance, loans and web postings; (EUAC) would be best. In order to break-even and be successful, the businessman/lady or the company in general, need to create a style and understand the need and of the consumer. At the same time, not always trying change their product. For instance, selling a really good cup of coffee ; and within a few months (from the start of sells) changing up the recipe or adding other thing to the menu(taking the focus off the coffee).Within the production and sells of this product, Television and internet marketing should be heavily enforced. During these days , everyone is on there computer, phone, or TV; so the images of the product can physiologically become a need for the consumer. I believe a business should change with the times, but keep strong ties to it’s roots.

  37. #39 by Santos Montoya on April 23, 2014 - 4:30 am

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    When starting a small business many methods can be used to determine the estimated cost. One of the first actions to take would be to categories the cost listed above into recurring and non-recurring cost. Once these costs are divided, one can use the equivalent uniform annual cost (EUAC) and the net present worth of cost to determine whether or not to invest in the new small business.

    2. Identify a technique relevant to each cost item.

    As mentioned before the cost need to be split into two categories, recurring and non-recurring payment/costs. Once this is complete one can use the net present worth of cost (NPW of cost) for the one time initial fees/cost that are not considered ongoing and equivalent uniform annual cost (EUAC) for the recurring payments. Below the costs are split to show a relevant technique for each cost item.

    Relevant to use NPW of Cost for non-recurring cost
    • Incorporation Fees
    • Permit and/or License Fees
    • Down-payment on office space or rent for a commercial lease
    • Office furniture and supplies
    • Initial inventory
    • Signage, Business cards and stationary
    • IT/computer equipment

    Relevant to use EUAC for the ongoing payments
    • Your salary, employee salaries, wages, and commissions
    • Rent, Utilities, Internet, phone, etc.
    • Professional services, such as an accountant and a lawyer
    • Taxes and Insurance
    • Marketing and Advertising
    • Website hosting and maintenance
    • Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    The first and foremost action to take when determining whether or not a business start-up is going to be worthwhile on an economic standpoint, would be to have proper research on companies that have been successful and understanding what made them unique to possible competitors. Once one can assure that their product is innovative and creative compared to that of another competitor, one must ensure that the demand for this particular item or service will increase or remain at a steady level without excessive decline in the future. Also being aware of possible unexpected costs and having a budget to cover a reasonable unexpected cost is a must to increase chances of breaking even. Proper analysis of benefit to cost can be interpreted with the equivalent uniform annual worth method (EUAW). Along with this the present worth of cost needs to be equal to or less than the present worth of benefits to ensure that one can break even. One must keep track of the cost in a detailed manner to have good vision as to what kind of benefits must be made to ensure that the business is able to break even.

  38. #40 by Tyler Hart on April 23, 2014 - 4:52 am

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    Net Present Worth analysis (NPW) should be used for the one time, initial costs. This technique will tell you how much capital you need for start up costs. Ongoing cost should be calculated with the Equivalent Uniform Annual Cost (EUAC) analysis. Granted, this can be altered for a more detailed budget, as some costs are annual, while others are monthly. The monthly alteration would be recommended for a start up company, since costs will fluctuate with growth over the first few years. However, if an annual budget is to be prepared, then this alteration is irrelevant, since monthly costs are simply added together.

    2. Identify a technique relevant to each cost item.

    The one time fees listed below should be calculated using NPW.
    • Incorporation Fees
    • Permit and/or License Fees
    • Down-payment on office space or rent for a commercial lease
    • Office furniture and supplies
    • Initial inventory
    • Signage, Business cards and stationary
    • IT/computer equipment

    The reoccurring costs listed below should be calculated using EUAC. (An annual budget was assumed)
    • Inventory
    • Your salary, employee salaries, wages, and commissions
    • Rent, Utilities, Internet, phone, etc.
    • Professional services, such as an accountant and a lawyer
    • Taxes and Insurance
    • Marketing and Advertising
    • Website hosting and maintenance
    • Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    First and foremost, I would make sure that a market exists for whatever good/service I am selling. Whether it be, a niche market, or a global market, either can be conquered in due time. Next thing would be to start as small as economically possible. The smaller the start up, the smaller the start up costs. The smaller the start up costs, the quicker I can break even, and start pulling in profits. The break-even point should be reached as quickly and efficiently as possible. Initial marketing should be done through social networking, and word of mouth for free. “Underground” marketing makes your company seem cool or fresh and will gather much more attention than people realize. Growth is good, but getting too big too fast can kill companies. I would reinvest much of the early profits back into the company to aid in growth. Once the company is on a sturdy financial threshold, I would begin acquiring other companies with similar products/services. If at any time, the company were in financial trouble, I would go on Shark Tank, so Mark Cuban could give me a shit ton of money and expertise in order to succeed.

  39. #41 by Juan Gonzalez on April 23, 2014 - 11:41 am

    1.
    To begin a business, estimating costs for it is crucial in order to foresee the future of the business and help it rise and progress in the right direction. From an “Engineering Economics” perspective, for the overall calculation of costs during the start up of the business, at year 0, the simplest methods to use would be the Net Present Worth. This method would help estimate the present cost for the business. Furthermore, if estimates were needed for reoccurring years, the best method to use would be the Equivalent Uniform Annual Worth, which can be used to find the annual (or monthly) costs any business, would face during startup. This method, (EUAW) is used for continuous costs and would be the best for annual or even monthly time periods. It could include periodical cash flows such as salary or other maintains costs. The Net Present Worth can be used to analyze and estimate single payment costs while the Equivalent Uniform Annual Worth can be used to analyze and estimate costs that repeatedly occur periodically.

    2.
    The Net Present Worth method can be applied to single-payment type costs or incomes while the Equivalent Uniform Annual Worth can be applied for reoccurring payments or incomes. Although Net Percent Worth can be applied throughout every payment, it gets tedious and sometimes very confusing for the reoccurring payments, thus, the Equivalent Uniform Annual Worth would be used instead.

    a.) For Net Percent Worth:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    b.) For Equivalent Uniform Annual Worth:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3.
    There are other strategies one could and should use in starting up a small business to help increasing the chances of breaking even and thus, gradually make a better and higher profit. In addition to Net Percent Worth and Equivalent Uniform Annual Worth, one can also apply techniques such as Break Even analysis, cost/benefit ratio, Incremental Rate of Return and more to estimate costs and benefits for the business to help one make decisions to further the business to succeed. First of all, I believe that before even getting started analyzing cost estimates, one should make sure that the product or business one is selling or starting up will sell or thrive in the long run and make a profit rather than leave them with a broken investment. By making sure the product or business is in demand, one would have a better chance to break even or even make a high profit. Additionally, one must have some entrepreneur’s knowledge alongside knowing how the economy works. Simple mistakes could ruin the business if not handled correctly due to something one might not know. Also, funds should also be in place to back up the product or business. A back-up plan would also be helpful just in case the business fails or spirals downward. The right balance in costs, loans, investments, estimating, etc. is what would help the business the most. Trying to minimize costs and increasing the demand in any way would be crucial. In the end, everything comes down to planning and organization; it is what makes or breaks a business.

  40. #42 by Nikhil Menon on April 23, 2014 - 12:42 pm

    1. From an Engineering Economics standpoint the planning and budgeting is an important stage to think about. From looking at the article, You should use net present worth analysis (NPW) for items that do not require continuous payments, and for items that will cost continuous payments that you pay over time you would use Equivalent Uniform Annual Worth (EUAW).

    2. So for NPW you would use it for

    • Incorporation Fees
    • Permit and/or License Fees
    • Down-payment on office space or rent for a commercial lease
    • Office furniture and supplies
    • Initial inventory
    • Signage, Business cards and stationary
    • IT/computer equipment

    And for EUAW
    • Inventory
    • Your salary, employee salaries, wages, and commissions
    • Rent, Utilities, Internet, phone, etc.
    • Professional services, such as an accountant and a lawyer
    • Taxes and Insurance
    • Marketing and Advertising
    • Website hosting and maintenance
    • Loan Payments.

    3. I believe the first step is to fully understand all the costs associated with the business, you need to understand if revenue will cover the costs. You will need to have a good business model to ensure everything is satisfactory. Always minimize costs whenever you personally can. Some other common sense business factors would be analyze supply and demand, be wary of competitors, and also be aware of how the economy is doing.

  41. #43 by Aaron Martinez on April 23, 2014 - 12:51 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    you could set up a cash flow. to see your annual or monthly benefits and operating costs. and make adjustments from there to try and get where you want to get finically. like using the EUAC technique to minimize costs.

    2. Identify a technique relevant to each cost item.

    NPW- Taxes and Insurance, Marketing and Advertising, and Signage, Business cards and stationary are just a few examples.

    EUAC/EUAW- Down Payment on office space, office furniture & supplies and rent and utilities.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    I would try to minimize my initial startup cost and keep my annual cost as low as possible while trying to maximize my benefits with as little as possible input at first to try and get my money back.i would try with the fixed input at first just incase my business doesn’t start out fast. and try to maximize my output.

  42. #44 by Eric Carmona on April 23, 2014 - 12:59 pm

    1) I would use the net present worth (NPW) method to calculate an estimate for the initial cost and an equivalent uniform annual cost (EUAC) method for an estimate of continuous cost that will be reoccurring.With these, I would make a graph of expenses per year so that I can have an estimate of how much profits I have to make in order to break even.

    2) Net present worth (NPW) analysis for the one time initial cost that have to be made to start up a business.

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    Equivalent uniform annual cost analysis for the cost that will have to be made on a continuous basis.

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3) I would want to assume the worst when starting up a business so that I can strategies accordingly such as rounding my estimates low. I would not want to leave it completely up to chance whether I lose all of my money or profit a lot, I would want to have something in place that I can fall back on. For example, I would not have a company that only produces a product that is out of the ordinary that is not really considered a necessity that people will always need. I would want to also produce a product that people always use, so that I can at least rely on that product selling due to the actual need of this product and that there will always be a demand for. I would want to do a good job of marketing my product and focusing on getting the attention of different social groups in society. I would also take into account the location of where my business is at in order to get a feel for the popularity of my product and to pinpoint the social classes I can reach out to. If the demand is high for my product is high and there is a competitive edge with other businesses that I can create, I would feel confident in the probability of making making sales and having a relatively consistent profit that I can estimate through the years and take chances on the side to come up with ideas that will break through and make even more profit on top of what is estimated to be a consistent profit. I would always stick to the expenses and benefits chart that I wanted to use in order to see where I stand in terms of being in debt, breaking even, or profiting.

  43. #45 by Brenda Koke on April 23, 2014 - 1:26 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    There are many different cost estimation techniques that are applicable to the estimates that are listed above. The best technique for single payment and the initial business start up would be would be the Net Present Worth analysis. For costs that are recurring Equivalent Uniform Annual Worth technique would be ideal for yearly costs which include operations and maintenance. But even before all of the calculations, a detailed plan of the costs and benefits over time are required for any kind of estimate.

    2. Identify a technique relevant to each cost item.

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    All of the items above are initial start up costs and therefore as mentioned in the previous question there most efficient technique would be the Net Present Worth Analysis.

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    The items listed above are on going and recurring costs. These costs come up either one a year for several years are several times a year and the most beneficial cost analysis technique would be the Equivalent Uniform Annual Worth Analysis.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    First, analyzing the market for how much product is in demand. Using other companies as an example, depending on the market either higher cost for higher demand and lower cost for a lower demand, the product will solely depend on competition and demand. Make sure the overhead costs and risks are minimized as much as possible. Comparing rate of returns and using as little money as possible would make the break even come a lot faster. Make the money work for you.

  44. #46 by Abdullah Alwosaibi on April 23, 2014 - 1:31 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    For someone that wants a general idea of where they are headed (NPW) would be an ideal choice, but then again that doesn’t take into account competitors nor taxation, inflation, and even depreciation; therefore, you cannot put a specific estimate based on a few data points and a more accurate way would be taking all of these factors into account. A (NPW) is only ideal for a start up and to calculate a once in a lifetime cost, for you to be able to take into account a continuous cost a (EUAC) would be helpful for an estimate, but not a specific cost.

    2. Identify a technique relevant to each cost item.

    Net Present Worth (NPW)
    Franchise fee
    Permit and/or License Fees
    Initial expenses (Building, furniture, supplies, signs)
    IT/computer equipment

    Equivalent Uniform Annual Cost (EUAC):
    Inventory
    Salaries
    Bills (Rent, utilities, fees)
    Marketing/Advertising
    Taxes
    Website

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    For you to be able to start a business and expect to break even as soon as possible, besides using the (breaking even methods, and the B/C ratio method). It is very hard to break even within the first few years, you have to build a good rep. and expect to lose a lot of money by doing so. One of the main strategies is to have incentives, and customer/employee attractions, as well as special offers. To take into account that for you to start a business you should have costs that would be able to cover, for the least the first year of your business. First cost including rent, employees, and products. That will insure that you don’t run out of business fast, the other thing is to take into account what is missing in the market, and try to work around them. A great method to use also would be to create a unique product outside of the market that would attract customer. For ex. the (Cane’s Sauce) the sauce is special and can only be found there; therefore, everyone buys from them for their sauce.

  45. #47 by Eri Amezcua on April 23, 2014 - 1:38 pm

    1.- From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    In this class we learned multiple ways of estimating cost, but I believe for this specific example the best options are the Present Worth Analysis technique or the Annual Cash Flow analysis technique.

    2.- Identify a technique relevant to each cost item:
    -For all the one time payments I will recommend the use of the Net Present Cost analysis which goal is to minimize the total initial cost. In this example the one time payments are:

    -Incorporation Fees
    -Permit and/or License Fees
    -Down-payment on office space or rent for a commercial lease
    -Office furniture and supplies
    -Initial inventory
    -Signage, Business cards and stationary
    -IT/computer equipment

    – For all the other payments that a company must continue paying I will recommend the Equivalent Uniform Annual Cost which shows you the amount of money that the company will be required to pay at different time periods. In this example the outgoing payments are:

    -Inventory
    -Your salary, employee salaries, wages, and commissions
    -Rent, Utilities, Internet, phone, etc.
    -Professional services, such as an accountant and a lawyer
    -Taxes and Insurance
    -Marketing and Advertising
    -Website hosting and maintenance
    -Loan Payments.

    3.- What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    In my personal opinion the key of success is being realistic, people tend to get too exited of their new business and forget that they are other business trying to do the same thing. This creates a really tough market and the possibilities of success are extremely low. That’s why I believe being cautious and realistic at the moment of starting a new business will prevent you to over spend in your initial costs, when you do that your possibilities of breaking even are higher and in case of failure your loss will not be that much higher.

  46. #48 by Isaias Espinoza on April 23, 2014 - 1:48 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    I would use the internal (ROR) cost estimation technique because this is where NPW of costs and NPW of benefits equal each other, which means that there is a greater chance to breakeven with investments in new services and new products. I would also implement the BCR cost estimation technique because the costs (consequences) listed above are either dealing with the public sector or the government.

    2. Identify a technique relevant to each cost item

    Use Internal Rate of Return for:

    Loan Payments
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance

    Use Benefit-Cost Ratio for:

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    In order for me to break even I would first want to make sure the product I am making is in high demand. I want to make sure I am able to turn a profit, minimizing costs and maximizing profits is imperative. If any of these steps are overlooked the business will be unsuccessful, and breaking even will be out of the question. In order to at least break even, you must find a way to maximize your profits and minimize your costs.

  47. #49 by Ibrahim Allam on April 23, 2014 - 1:58 pm

    1) For the overall calculation of costs, the simple methods of Net Present Worth and for the continuing costs,Equivalent Uniform Annual Worth with can be used to find the costs any business would face during start up.With both of these techniques a minimum attractive rate of return can also be utilized, this would be very helpful if you are looking for help from future investors, as they are always looking to capitalize their profits from their initial investment.

    2) Identify a technique relevant to each cost item.
    Net Present Worth:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    and for the EUAC:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3)To begin i would increase the chances of breaking even with proper preparation. Having a good layout of what to expect can really help you to focus on success when your business is started. If money is not properly managed and is spent loosely on the wrong things start to fail elsewhere and you will have a hard time trying to to even make money.This first strategy is important because in order to sell your first product or service you must take care of fixed expenses that you will incorporate into your business. Take the time to invest in preparing financial projections and test all business innovations. Creating some type of marketing campaign would also help a business really flourish putting up ads on the internet is very inexpensive and very effective additionally television ads would really put your business out into the public’s’ eye. I would want to make sure that my product or my service isn’t available all over the market especially in the area i am stationed. Finally, I would collaborate a plan to establish a reasonable price that is affordable yet beneficial for myself and my business.

  48. #50 by Alberto Landivar on April 23, 2014 - 2:23 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    -From an “Engineering Economics” perspective, I could use several simple cost estimation techniques related to the type of costs. One would be the Present Worth Analysis method, which can be used into single payments costs and for the recurrent costs I would use an annuity analysis like the Equivalent Uniform Annual Cost.

    2. Identify a technique relevant to each cost item.

    -The Net Present Worth (NPW) method can be applied into initial and one-time fees, of course there is space for the Future Worth Analysis (FW) when the time frame is a one to come yet. These costs are:
    -Incorporation Fees
    -Permit and/or License Fees
    -Down payment on office space or rent for a commercial lease
    -Office furniture and supplies
    -Initial inventory
    -Signage, Business cards and stationary
    -IT/computer equipment

    -For all regular expenses and on going costs the estimation technique used should be the Equivalent Uniform Annual Worth or the Net Present Worth can also be in consideration, the EUAW can be used to calculate costs quickly and efficiently. Some costs where these techniques can be used on are:
    -Inventory
    -Your salary, employee salaries, wages, and commissions
    -Rent, Utilities, Internet, phone, etc.
    -Professional services, such as an accountant and a lawyer
    -Taxes and Insurance
    -Marketing and Advertising
    -Website hosting and maintenance
    -Loan Payments.

    3-. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    -To increase the chance of break-even in a business start-up not only the economic analysis formulas learned like the Present Worth Analysis, for the one-time fees items, or the Equivalent Uniform Monthly worth technique, (Monthly because most on-going costs are based monthly), are important. But also the strategy one as a Manager of Owner of a business uses is relevant. As a head of a business you should set priorities as soon as possible to increase productivity, also your primary goal aside of providing a great service for the costumers is to make a short-term plan to break-even as soon as possible. Always have a back-up plan and every week make an entire analysis of the company’s situation to know when to act before it is late.

  49. #51 by Ronald Anderle on April 23, 2014 - 2:34 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    First there are many cost estimation techniques that would work for this. But for starter companies I would choose EUAW, NPW or both. Using both would be good since with EUAW you can analysis recurring cost then you can put it in a NPW for all the single payment costs for more accurate economic analysis.

    2. Identify a technique relevant to each cost item.

    With the different types of items that will be single payment costs and recurring cost you can put them in 2 catalogues.
    For the single payments (NPW)

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    And for the recurring costs (EUAW)
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    First before even thinking of starting a business the owner needs to know the risk level or if the product is in a demand. This research before starting will help in the long run to see if your product has the protential of being wanted or if it has a distinct niche in the market. Once this little bit of research is done you can move to a economic analysis strategies to see if you can break even. So secondly you need to state every cost that will occur such as the ones listed in question 2 and the article. After this you can use the NPW and EUAW to see economic cost but also you can use Break even analysis and Cost/Benefit Ratio and others to see what you need. With these you can see where you can lessen costs to fit to break even. And finally after all the research and calculations you need to get the product marketable. This is actually much easier now days because of the internet. If you can market well on the internet people will tell others and in the end you can see more product and break even much faster.

  50. #52 by Kentesha High on April 23, 2014 - 2:41 pm

    1.The Engineering Economics fundamentals I would use would be Rate of Return. According to Newnan, Eschenbach and Lavelle when calculating Rate of Return you must convert varies consequences of the investment into a cash flow chart Present Worth of Benefit minus Present Worth of the Cost will help you determine if you will break even. When plotting and creating a spread sheet of your Net Present Worth in this business and also using EUAB to determine the Rate of Return before you invest the time and money in a business (Time Value of Money).

    2. The initial one time fee’s you would calculate first.

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    The Uniform annual fee’s much be calculated for the next 12 months.

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3.My strategy to becoming an entrepreneur would have to be understand that the economic times when determining how success your business will be, you must study the market. I would start off small and let my business build on its own. Focus on one idea and have a true purpose that will sell itself and you can market to a large audience not alienate any social class of people.

    Kentesha High
    Section: 006 2:00-2:50pm

    Great Article Sarah M. Asio.

  51. #53 by Kentesha High on April 23, 2014 - 2:42 pm

    1.The Engineering Economics fundamentals I would use would be Rate of Return. According to Newnan, Eschenbach and Lavelle when calculating Rate of Return you must convert varies consequences of the investment into a cash flow chart Present Worth of Benefit minus Present Worth of the Cost will help you determine if you will break even. When plotting and creating a spread sheet of your Net Present Worth in this business and also using EUAB to determine the Rate of Return before you invest the time and money in a business (Time Value of Money).

    2. The initial one time fee’s you would calculate first.

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    The Uniform annual fee’s much be calculated for the next 12 months.

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3.My strategy to becoming an entrepreneur would have to be understand that the economic times when determining how success your business will be, you must study the market. I would start off small and let my business build on its own. Focus on one idea and have a true purpose that will sell itself and you can market to a large audience not alienate any social class of people.

    Kentesha High
    Section: 006 2:00-2:50pm

    Great Article Sarah M. Asio.

  52. #54 by Connor Guerrero on April 23, 2014 - 3:07 pm

    1) From an Engineering Economics perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    The startup costs are already given in the present worth, so there is not much that can be done to estimate those costs, other than just using Net Present Cost (NPC). Keep in mind that it can be difficult to initially pay for all of the startup costs up front, so the Equivalent Uniform Annual Cost method (EUAC) can be used to estimate the costs that can be paid off over time.
    The continuous costs can be estimated using EUAC as well, because they will have to be accumulated over time.

    2) Identify a technique relevant to each cost item.
    Net Present Cost
    • Incorporation Fees
    • Permit and/or License Fees
    • Down-Payment on office space or rent for a commercial lease
    • Office furniture and supplies
    • Initial inventory
    • Signage, Business cards and stationary
    • IT/computer equipment
    Equivalent Uniform Annual Cost
    • Inventory
    • Your salary, employee salaries, wages, and commissions
    • Rent, Utilities, Internet, phone, etc.
    • Professional services, such as an accountant and a lawyer
    • Taxes and Insurance
    • Marketing and Advertising
    • Website hosting and maintenance
    • Loan Payments

    3) What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    Financially, I would start by estimating all benefits. After setting a realistic expectation of revenue, the payback period method could be used to set a reasonable expectation of when the company will breakeven. I would make sure to not overreach the company beyond its means, so that it can actually make a profit.

  53. #55 by Tyler Winston on April 23, 2014 - 3:07 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    The point of cost estimation techniques is to find out available revenue, profit or deductions(costs) for a given cash flow. For fees that are uniformly charged every year, it is much easier to use Equivalent Uniform Annual Costs (EUAC) methods. For each one-time fee or non uniformly occurring fees, it is best to do a Net Present Worth (NPW) or Future Worth (FW) calculation. NPW methods can be used for EUAC methods, however, it can be very time consuming.

    2. Identify a technique relevant to each cost item.

    Incorporation Fees – NPW
    Permit and/or License Fees- NPW
    Down-payment on office space or rent for a commercial lease – NPW
    Office furniture and supplies – NPW
    Initial inventory – NPW
    Signage, Business cards and stationary – NPW
    IT/computer equipment – NPW

    Inventory payments- EUAC
    Your salary, employee salaries, wages, and commissions – EUAC
    Rent, Utilities, Internet, phone, etc.- EUAC
    Professional services, such as an accountant and a lawyer – EUAC
    Taxes and Insurance- EUAC
    Marketing and Advertising- EUAC
    Website hosting and maintenance – EUAC
    Loan Payments.- EUAC

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    Because Profit is based on Revenue minus Costs, the main goal is to maximize revenue and minimize costs. Lowering costs might be as simple as buying components from a cheaper manufacturer or getting purchase reliefs based on business start-up status. Some businesses may even team with larger businesses for funding to reduce costs; and it can be a mutually beneficial relationship. It is also very important to not only sell products to consumers, but to create value of a product across the entire industry.

    Raising revenue is a very complex topic with many different approaches. Marketing and creating desirable and quality products is one method to increase reputation and gives the ability to create demand and raise revenue rates. Demand also increases with improved customer service- buyers want to know they are a personal company that cares about them. Reputation is one of the single most important qualities in a company that is in competition with others for the same product.

    Another strategy implement is to have a dynamic product line that changes with cultural and social change. If a company is in the industry of electronics or software, keeping with the most up-to-date products is a must, or they will be left behind. To be truly profitable, a company needs to convey an innovation to “must-have” products for people. One of the best examples of this is in Apple. By creating the iPhone, Apple generated a massive shift in culture change with the use of electronics in daily life. Apple has done the same with iPads, Macs, and many other products. Start up companies would be wise to follow the path that Apple has taken through their history.

  54. #56 by kenteshahigh on April 23, 2014 - 3:30 pm

    1.The Engineering Economics fundamentals I would use would be Rate of Return. According to Newnan, Eschenbach and Lavelle when calculating Rate of Return you must convert varies consequences of the investment into a cash flow chart Present Worth of Benefit minus Present Worth of the Cost will help you determine if you will break even. When plotting and creating a spread sheet of your Net Present Worth in this business and also using EUAB to determine the Rate of Return before you invest the time and money in a business (Time Value of Money).

    2. The initial one time fee’s you would calculate first.
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment
    The Uniform annual fee’s much be calculated for the next 12 months.
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3.My strategy to becoming an entrepreneur would have to be understand that the economic times when determining how success your business will be, you must study the market. I would start off small and let my business build on its own. Focus on one idea and have a true purpose that will sell itself and you can market to a large audience not alienate any social class of people.

    Kentesha High
    Section: 006 2:00-2:50pm
    Great Article Sarah M. Asio.

  55. #57 by kenteshahigh on April 23, 2014 - 3:30 pm

    1.The Engineering Economics fundamentals I would use would be Rate of Return. According to Newnan, Eschenbach and Lavelle when calculating Rate of Return you must convert varies consequences of the investment into a cash flow chart Present Worth of Benefit minus Present Worth of the Cost will help you determine if you will break even. When plotting and creating a spread sheet of your Net Present Worth in this business and also using EUAB to determine the Rate of Return before you invest the time and money in a business (Time Value of Money).

    2. The initial one time fee’s you would calculate first.
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment
    The Uniform annual fee’s much be calculated for the next 12 months.
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3.My strategy to becoming an entrepreneur would have to be understand that the economic times when determining how success your business will be, you must study the market. I would start off small and let my business build on its own. Focus on one idea and have a true purpose that will sell itself and you can market to a large audience not alienate any social class of people.
    Kentesha High
    Section: 006 2:00-2:50pm
    Great Article Sarah M. Asio.

  56. #58 by Tyler Morris on April 23, 2014 - 4:28 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    For the initial cost I would use the net present worth (NPW) method because all the cost are at one given time. You could also try to use the equivalent uniform annual cost (EUAC) method for the recurrent cost or expenses.

    2. Identify a technique relevant to each cost item.
    For the initial fees you could use either the future worth or the present worth analysis. The cost these include could range from office furniture, rent, and equipment for an office.
    For all the on-going cost and expenses you can estimate using equivalent uniform monthly cost or equivalen uniform annual cost depending on how often the cost occure. These would cover cost such as employ salary, internet, phone, and loan payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    At first I would see if this is a start up or product that has a good foundation. With that foundation taking care of initial cost is another critical factor to equate, is it worth the investment of the initial cost? After the initial cost I would want to make sure I have a clear understanding of my reoccurring cost and expenses. These thought process are critical because if you are going to start the sell of a new product you must know all the cost involved.

  57. #59 by Jotvir Brar on April 23, 2014 - 4:45 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    I would use a few cost estimation techniques to estimate these costs. Using the Internal Rate of Return (IRR) technique would be viable due to the fact that that chance to break-even is fairly high in new services and products. A Benefit-Cost Ratio (BC) would work because the costs in question are both concerned with the government and public sector. I would also use the Equivalent Uniform Annual Cost (EUAC) technique to deal with the continual costs.

    2. Identify a technique relevant to each cost item.
    For the Benefit-Cost Ratio technique, the cost items that would work with this would be: Incorporation Fees, Permit and/or License Fees, Down-Payment on office space or rent for a commercial lease, Office furniture and supplies, Initial inventory, Signage and Business cards/stationary, and IT/Computer equipment.
    For the Internal Rate of Return technique, the cost items that would work with this would be: Loan Payments, Inventory, Your salary, employee salaries, wages, and commissions, Rent, Utilities, Internet, phone, etc., Professional services, such as an accountant and a lawyer, Taxes and Insurance, Marketing and Advertising, and Website hosting and maintenance

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    Before the start-up, I would make sure that all the fixed expenses, such as: permits, incorporation fees, computer equipment, initial inventory, down-payment etc., would be handled with in order to minimize profit loss when selling the first product. Once the fixed costs are dealt with, the second logical step would be to make sure all recurring costs like: delivery costs, wages, professional services, utilities, insurance, phone, rent, internet etc. In order to cover the recurring costs as well as make a profit, the strategy is fairly simple. I would make sure that my product or service would be affordable, in demand, and of high quality in order to make a profit, cover costs, and keep the investors(if any) happy.

  58. #60 by Erick Callier on April 23, 2014 - 5:49 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    The cost estimation technique used would depend on the situation that presented itself to you. For this instance I would use the Present Worth of costs and benefits because they equate one another. With this technique there is a higher chance to recover your expenses with investments in new products.

    2. Identify a technique relevant to each cost item.

    For NPW:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    For EUAC/EUAW:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    The first and foremost point of success in a new start up business is to thoroughly research all associated cost of the new venture. Also, have additional capital available to withstand slow sales initially and accounts receivable issues. Gaining credit from vendors can also be an issue for new businesses; this can put a strain on cash flow and ruin many start-ups before they get off the ground. One of the most important strategies to success would be to differentiate your business from other competitors through a new product or marketing technique or specialized service that would enable your business to be unique and therefore gain a competitive advantage that should result in higher profit margins. Do not take initial profits from early success for personal motives; the profits earned should be used for debt reduction and/or growth (more inventory, additional advertising, new locations, etc.). Spending more than your initial budget without the strong prospect of additional business from that spending is a recipe for disaster.

  59. #61 by nguye188 on April 23, 2014 - 6:12 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    From an ”Engineering Economic” perspective, we could use the Present Worth techniques to determine the value of the future money received and disbursement, to help us find the Present Worth of an income, producing property. Other wise, the Equivalent Uniform Annual Cost would also use to convert money to an equivalent annual cost or benefit to help us understand and know more about economics in engineering .
    2.Identify a technique relevant to each cost item
    For every business, especially in engineering economic field, there is a technique relevant due to the cost of each item. For example: they have basic cost which first cost are purchased buying a building or renting land
    •Incorporation Fees
    •Permit and/or License Fees
    •Down-payment on office space or rent for a commercial lease
    •Office furniture and supplies
    •Initial inventory
    •Signage, Business cards and stationary
    •IT/computer equipment
    In the other hand, the annual cost in the company is calculate due to the cost of:
    •Inventory
    •Your salary, employee salaries, wages, and commissions
    •Rent, Utilities, Internet, phone, etc.
    •Professional services, such as an accountant and a lawyer
    •Taxes and Insurance
    •Marketing and Advertising
    •Website hosting and maintenance
    •Loan Payments.
    people who do the business have more knowledge in general cost in engineering flied and how much money they will make.
    3.What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    understanding basic-cost , find the salvage values as the way to reducing the cost .it is better than increasing the benefit.
    make good decision in “sensitive to estimate”, have more evaluate and understanding the impact of any particular estimate. For example, ask a question that how much a particular estimate would be fix in order to achieve a particular decision? Will our plans are constructed in successful way achievement for now and the future? that will help to making big benefit in the company.

  60. #62 by nguye188 on April 23, 2014 - 6:18 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    From an ”Engineering Economic” perspective, we could use the Present Worth techniques to determine the value of the future money received and disbursement, to help us find the Present Worth of an income, producing property. Other wise, the Equivalent Uniform Annual Cost would also use to convert money to an equivalent annual cost or benefit to help us understand and know more about economics in engineering .
    2.Identify a technique relevant to each cost item
    For every business, especially in engineering economic field, there is a technique relevant due to the cost of each item. For example: they have basic cost which first cost are purchased buying a building or renting land
    •Incorporation Fees
    •Permit and/or License Fees
    •Down-payment on office space or rent for a commercial lease
    •Office furniture and supplies
    •Initial inventory
    •Signage, Business cards and stationary
    •IT/computer equipment
    In the other hand, the annual cost in the company is calculate due to the cost of:
    •Inventory
    •Your salary, employee salaries, wages, and commissions
    •Rent, Utilities, Internet, phone, etc.
    •Professional services, such as an accountant and a lawyer
    •Taxes and Insurance
    •Marketing and Advertising
    •Website hosting and maintenance
    •Loan Payments.
    people who do the business have more knowledge in general cost in engineering flied and how much money they will make.
    3.What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    understanding basic-cost , find the salvage values as the way to reducing the cost .it is better than increasing the benefit.
    make good decision in “sensitive to estimate”, have more evaluate and understanding the impact of any particular estimate. For example, ask a question that how much a particular estimate would be fix in order to achieve a particular decision? Will our plans are constructed in successful way achievement for now and the future? that will help to making big benefit in the company.

  61. #63 by Michael Stevens on April 23, 2014 - 6:25 pm

    1) Strategically, first one should calculate the Net Present Worth (NPW) of all the costs. From there any payment can be assumed, wether it be a loan, investors, self-funded, etc.
    2) The first list of start-up costs are all (obviously) one-time costs; therefore using NPW, to determine these costs, is most beneficial.
    The second list is equivalent to continuous costs for a certain period of time. The best technique would be to use an annual analysis (EUAC).
    3) The best strategy to help break even sooner is to keep track of budgets, such as minimize costs and maximize profits.

  62. #64 by Clint Balch on April 23, 2014 - 7:33 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    To provide estimates on the costs, it would be reasonable to use the Net Present Cost analysis technique. You could also use the Equivalent Uniform Annual Cost technique to estimate yearly costs.

    2. Identify a technique relevant to each cost item.

    Net Present Cost
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    Equivalent Uniform Annual Cost
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    In order to break even, a business must be built on a solid foundation. This means that it is necessary to have extensive planning. This could come in the form of making sure that there is a demand for your product, making sure you have sufficient capital to invest, and that you have a sound business model. Techniques such as Equivalent Uniform Annual Worth analysis can help to estimate on whether or not your business can be profitable.

  63. #65 by Mitchell Anderson on April 23, 2014 - 7:58 pm

    1. To help gain a basis on what is required to have a start up company, A Net Present Worth Analysis (NPW) can calculate present values for the fees that come with starting a company such as down-payments or leases on buildings or hardware. Adding up all the fees through a few simple calculations using current interest rates over a certain period of time. This method may not give pin-point accurate results since it is a rough estimate of the main fees that are involved with running a start-up.

    2. For the following list, Net Present Worth Analysis is most useful as it calculates the values for non-recurring fees and payments:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    For the following list, Equivalent Uniform Annual Cost would be most useful as it calculated the values for recurring fees and payments:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3.The best way to increase the chances of breaking even in my mind would be to prepare as much as possible and take in as many valuables into calculations to ensure that when you sell your product, the profit is large enough to make up for any variables not accounted for that could result in a non-favorable venture. Unforeseen issues or overlooked problems could make a large difference in how much money you take home at the end of the night. Planning down the road for the future market is difficult, but understanding the opinions of people and how their needs or wants change with as people seek easier and faster ways to achieve a certain goal. Companies such as GoPro, saw an opportunity to create a new market for helmet-mounted cameras which took them to new heights of profitability.

  64. #66 by Hunter Moeller on April 23, 2014 - 8:39 pm

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    As an entrepreneur, having an accurate estimate of the total costs required to start and run your business is very important in order to build an effective business model and maximize profitibility. In order to come up with an estimate for the intitial costs, or any one-time occuring costs, I would use Net Present Worth of Costs (NPC). For an estimate of any on-going costs, I would use the technique called Estimate Uniform Annual Cost (EUAC).

    2. Identify a technique relevant to each cost item.
    First, I would come up with an estimate for the following intitial start-up costs by using NPC, because they all appear as costs made in a single payment.
    -Incorporation Fees
    -Permit and/or License Fees
    -Down-payment on office space or rent for a commercial lease
    -Office furniture and supplies
    -Initial inventory
    -Signage, Business cards and stationary
    -IT/computer equipment

    As for the next list of costs, they can be defined as on-going or reoccurring costs that can be estimated using EUAC.
    -Inventory
    -Your salary, employee salaries, wages, and commissions
    -Rent, Utilities, Internet, phone, etc.
    -Professional services, such as an accountant and a lawyer
    -Taxes and Insurance
    -Marketing and Advertising
    -Website hosting and maintenance
    -Loan Payments

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    When starting a business my main focus would be building an effective business model that not only increases my chances of breaking even, but even further maximize the profitability of the business. A key first step to this would be to study the market that I am entering. By doing so I could analyze what the competition is in the market that I am entering and figure out away that my product/service could compete with the what is currently available. This means that whatever my business if offering, needs to be something that is unique, reliable, and just as good, if not better, than what my competition has to offer. I would also want to be sure that such a product/service has a high consumer demand and that it could be provided while still maximizing the benefits and minimizing my costs. Once I find out my estimated costs using the techniques above, I will have a good idea how much revenue my business needs to bring in, in order to break even and hopefully achieve becoming a profitable business. Combining these strategies will help me set a price at which my service/product is offered and decide how many units need to be sold in order to break even. Also, by analyzing an internal rate of return I could find a point at which my present worth of costs is equal to my present worth of benefits, which would make me further aware of what other financial planning needs to be done. Once, I have a set business model where the benefits seem to equal or even exceed the costs it would be time to enter the market and monitor how effective my plan is. If things seem to not go as planned then, adjustments can be made then analyzed using the same techniques. For example, if sales did not go as planned in the first year, then you may want increase advertising/marketing spending if it will increase your chances to break even. These small adjustments may be necessary, however I believe that sticking close to your original business model is important as long as anticipated benefits can cover what you estimated your costs to be.

  65. #67 by Hopkins Ojarikre on April 23, 2014 - 8:44 pm

    1. I would use Equivalent uniform Annual Costs (EUAC) and also Net Present Worth (NPW) depending on what costs like single cost or a continuous or annual costs. EUAC for continuous costs and NPW for single costs.

    2. I am going use EUAC
    • Salary, employee salaries, wages and commission
    • Rent, Utilities, Internet, phone
    • Taxes
    • Insurance
    • Payment of Loan
    • Inventory

    While For Net Present Worth
    • Incorporation fees
    • Permit and license fees
    • IT or computer equipment
    • Office furniture and supplies
    • Stationary like business cards

    3. There are various ways or strategies in breaking even in a start up business.
    Defining your idea is important. It will become the driving force of your business. Like knowing who is the customer, what business are you in, what do you sell (product/service), what is your plan for growth, what is your primary competitive advantage? Also, you can learn a lot about your business and customers by looking at how your competitors do business in order to break even. A cash flow projection will show you how much working capital you will need during those “gaps” in your cash position. Identifying all target markets, tools and different strategies and qualify the best target markets. Finally making your products and services affordable would make the business break even.

  66. #68 by Hopkins Ojarikre on April 23, 2014 - 8:50 pm

    1. I would use Equivalent uniform Annual Costs (EUAC) and also Net Present Worth (NPW) depending on what costs like single cost or a continuous or annual costs. EUAC for continuous costs and NPW for single costs.

    2. I am going use EUAC for Salary, employee salaries, wages and commission, Rent, Utilities, Internet, phone, Taxes, Insurance, Payment of Loan and Inventory

    You use Net Present Worth for Incorporation fees, Permit and license fees, IT or computer equipment, Office furniture and supplies and Stationary like business cards.

    3. There are various ways or strategies in breaking even in a start up business.
    Defining your idea is important. It will become the driving force of your business. Like knowing who is the customer, what business are you in, what do you sell (product/service), what is your plan for growth, what is your primary competitive advantage? Also, you can learn a lot about your business and customers by looking at how your competitors do business in order to break even. A cash flow projection will show you how much working capital you will need during those “gaps” in your cash position. Identifying all target markets, tools and different strategies and qualify the best target markets. Finally making your products and services affordable would make the business break even.

  67. #69 by John Turner on April 23, 2014 - 10:08 pm

    1: Internal rate of return, and a basic cost benefit analysis could both be effectively used to weigh the various rewards and costs of your entrepreneurship, including but not limited to start up capital and fixed costs.

    2: The net present worth could be used for all costs and benefits, so long as you adjust for inflation.

    3: I would start with low risk endeavors, and gradually move toward higher risk/reward ventures.

  68. #70 by Nana Yaw Mensah Ntiamoah on April 23, 2014 - 10:18 pm

    1. .From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    From economic perspective, the cost estimation you can use are the net present worth analysis, equivalent uniform annual cost , marginal cost technique, rate of return and benefit ratio.

    2. Identify a technique relevant to each cost item.
    I will use the rate of return for:

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    And i will use the net present worth analysis for:

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    First of all, you will have to know who your tarket markets are so as to dedicate you time and effort to those target markets or customers. And also having a very good organization and setting up a plan will increase the chances of breaking even in a business start-up.

  69. #71 by madelyn tadlock on April 23, 2014 - 11:10 pm

    1.From an engineering economics stand point I would start by looking at all potential costs that could occur and using Net present worth analysis and equivalent uniform annual costs. I could figure out the costs that will be occurring from year to year and see how much would need to be saved to afford these costs. However, because these costs can fluctuate and change it becomes more difficult to calculate these costs.

    2. The Net Present worth analysis can be used on these initial costs since it will be used for a present time, which will include the incorporation fees, permit and/or license fees, down-payment on office space, office furniture and supplies, initial inventory, signage, business cards and stationary, and computer equipment. The Equivalent Uniform Annual worth can be used on the continuous costs to determine the annual fees for inventory costs, salaries, commissions, rent, utilities, internet and phone services, professional services, taxes and insurance, market and advertising, website hosting and maintenance, and loan payments.

    3.To break even for a business start up and to maintain a business it would be necessary to consider fixed costs or loans needed to get your business going. It’s also necessary to consider the recurring costs for such as labor and supplies. Also to ensure growth of your company you need to continue to update so you can stay ahead of any competitors.

  70. #72 by Luis Juarez on April 24, 2014 - 12:10 am

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    The strategies that I would adopt in order to increase my chances of breaking even in a business start-up are estimating a net present worth cost and an equivalent uniform annual cost. This gives me an accurate estimate as to what my cost are going to be. Either strategy is sufficient enough to give you an idea as to where your break-even point would be.

    2. Identify a technique relevant to each cost item.

    Present worth:

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment
    Followed by estimating on-going costs or regular expenses such as:

    Annual Worth:

    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    First i need to identify how much my cost is going to be. By doing this i can have an estimate on whether i will be able to handle the expenses myself or if i would need some help by getting a loan or looking for investors. After i have an idea of what that will be, i will begin to see how much profit i will be making at the start of the business. Advertisement is going to be a big part of how much my profit will be. The popular my business is, the more profitable it will be. And last but not least, the quality of my business will play a big role in how profit will rise. Being able to accomplish these three will help me have a great chance in being able to break even.

  71. #73 by Muhana Alsalahi on April 24, 2014 - 12:13 am

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    Ideally, a person should use, the Net Present Worth method to estimate his costs for a onetime fee like (equipment and permits), and EUAC for a reoccurring payment like (maintenance and bills). They are ideal because they are easy, and they save a person a lot of time, they help them get an estimate on how much they are going to have to pay for the first few years, until they are able to break even or until they have to replace their equipment.
    2. Identify a technique relevant to each cost item.
    Net Present Worth (NPW)
    Franchise fee
    Permit and/or License Fees
    Initial expenses (Building, furniture, supplies, signs)
    IT/computer equipment

    Equivalent Uniform Annual Cost (EUAC):
    Inventory
    Salaries
    Bills (Rent, utilities, fees)
    Marketing/Advertising
    Taxes
    Website

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    If someone is planning on starting a business, they should always ask the experts before they get themselves into something they are not ready for. They should also try to cover most of their first year’s expenses before starting their business. Most businesses lose money on their first year, or first few years, until they are able to break even. They should be prepared for that before. The way to get people attracted to your business is by bringing something different than everyone else. That will make you stand out and people will be attracted to the product with the correct attitude and advertisement, as well as, the competitive prices.

  72. #74 by Nabin Kaini on April 24, 2014 - 12:15 am

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    From an “Engineering Economics” perspective, I would use the Net Present Costs Method (NPC) for all of the initial expenditures for the business venture and for the expenditure reoccurring over time I would use the estimated uniform annual costs (EUAC).

    2. Identify a technique relevant to each cost item.

    For Net Present worth (NPW):
    -Incorporation Fees
    -Permit and/or License Fees
    -Down-payment on office space or rent for a commercial lease
    -Office furniture and supplies
    -Initial inventory
    -Signage, Business cards and stationary
    -IT/computer equipment

    For Equivalent Uniform Annual worth (EUAW):
    -Inventory
    -Your salary, employee salaries, wages, and commissions
    -Rent, Utilities, Internet, phone, etc.
    -Professional services, such as an accountant and a lawyer
    -Taxes and Insurance
    -Marketing and Advertising
    -Website hosting and maintenance
    -Loan Payments

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    To increase the chances of breaking even in a business start-up, I would first analyze the market demand and supply before I start making the product. I would make sure the market looks good for that product and also make sure that I am able to get a profit from that product. I would do some research about my competitors and make sure I make my product more superior so I would get more costumers.

  73. #75 by stephen shea on April 24, 2014 - 12:34 am

    1.From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above? I would use Net present worth technique to determine startup value. Then I would use the Estimated Uniform Annual Worth method to find out annual costs and revenue streams.

    2. Identify a technique relevant to each cost item.

    The following one time payments I would Use the Net Present Cost approach in determining the cost:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    These reccurring payments can be evaluated using the EUAC method since most are yearly costs with an unlimited term of years.
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up? I would make sure that my product will meet sufficient Supply and Demands needs for the market I am trying to sell in. Location is very important. Something with an immediate need will spark immediate revenue and will offset the start up capital required. A continuing campaign of marketing and correct use of signage and product placement will keep the product in the public’s eye. IF the product is a non essential product for people then more emphasis will be placed on Research and Development to ensure the product is keeping up with current demands or trends. To break even you must spend money to make money. Startup fees will put you at a deficit but if the product has staying power within a market then it will pay itself off over time.

  74. #76 by jjopoku on April 24, 2014 - 12:47 am

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    It’s best to use the Net Present Worth and the Equivalent Uniform Annual Cost method. In this NPW process, the initial investment is subtracted from the sum of all the present values of cash flow, for the economic life of the project.

    The EUAC method consider the time value of money and convert all investments, cash flows, salvage values, and any other revenues and costs into their equivalent uniform annual cash flow over the anticipated life of the project. The interest rate however, is known and set at a minimal acceptable rate of return.

    2. Identify a technique relevant to each cost item.

    NPW will be used for materials, supplies, permit, direct labor, maintenance, repairs, and direct overhead

    EUAC will be used for employee salaries, commissions, taxes, loans, rent and utilities.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    It’s best to review the income statement. They are generated each month after all the accounting transactions are verified and reconciled.
    Also, one should review all avenues to increase revenue as well as reduce costs in order to generate a profit. A business that doesn’t eventually generate a profit will not remain in operation very long.
    And one must prepare a break-even analysis in order to determine profitability.

  75. #77 by Mohamed Essaid on April 24, 2014 - 3:33 pm

    1. From an “Engineering Economics” perspectives, what cost estimation techniques would you use to provide estimates to the costs listed above?

    According to the costs given, we can find out which is the initial cost and annual cost.
    Initial Costs are acquired a single time when the business begins; companies need to have, at the minimum, this much money in their account when they are planning to begin their business. To abolish the initial cost, the net present worth has to be used.
    Annual Costs are additional prices in the manufacturing procedure. Businesses have to stabilize their annual and benefit costs. The developing businesses are the companies that have benefit cost greater than annual cost. If however Equivalent Uniform Annual Cost is used, annual cost would be removed. Furthermore, they could also use the Equivalent Uniform Monthly Cost to keep track of the company undoubtedly.

    2. Identify a technique relevant to each cost item.

    Initial Cost is Union costs, furniture and supplies for the office, Signage, Business cards, computer products, Permit or License Costs, deposit fees for the office rent lease.
    The company deals with annual cost.
    Annual Cost: Inventory, salaries, wages, and bonuses, Rent fees, Internet, and phone bills, etc., In addition to that there are Licensed assistances, for instance accountants, lawyers, Taxes and Insurance, Marketing and Advertising, Website, maintenance, security, and Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    Strategies:
    – Examining the market need in advance, before creating the product. The Price of the product is also very significant weather it would be affordable. Through the demand and supply chart we can conclude well balanced price. Defining the customers’ age, style, budget etc.
    – The project that is being created should either have a small or big depending on weather the project is created for short or long term project. If the project is long term, the company should have a huge investment budget. If the big budget is not affordable by the entrepreneur, if not then seeking help from the government or getting loans would be the right choice.

    Advertising the product to the customer through TV commercials, high way posters, magazine or newspaper, are one of the many ways to attract the public’s attention.
    – More importantly paying close attention to the product’s quality and regularly improving the product’s quality.

  76. #78 by Saad Hashmani on April 25, 2014 - 6:07 pm

    1. from an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?

    Since the start-up costs incur once only, Present worth method is the most suitable technique unless calculations and estimation is being done for a future date for which future worth analysis will be more appropriate since the costs may change (increase) in future.
    Furthermore the ongoing and regular expenses estimation can be done by using Equivalent Uniform Cost method however since most costs are on monthly basis we will use Equivalent Uniform Monthly cost method.

    2. Identify a technique relevant to each cost item.
    -Net Present Worth Analysis:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    Ongoing cost estimates:
    -Equivalent Uniform Annual Cost:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?
    The simplest strategies include rolling and flow of cash and that can be achieved by volume sales for a competitive price. Secondly investing bigger portion towards sell-able inventory rather than expensive and luxurious equipment for presentation (may be necessary for certain businesses). Ensuring the product is marketed well (Unless the product is known by the right crowd it won’t give good results). Product should be priced right and price shouldn’t vary in close regions to keep a positive image for a new business. Last is to manage supply and demand. If the product is manufactured and distributed at right times then it may allow the breaking even to be achieved earlier than in back order situations.

  77. #79 by Esteban Gonzalez on April 28, 2014 - 5:53 pm

    1. From an “Engineering Economics” perspective, what cost estimation techniques would you use to provide estimates to the costs listed above?
    There are a variety of available methods for the different costs listed.
    I would most likely use the NPW (Net Present Worth) for all of the fees that are paid in the start of the time period (such as fees, start-up costs, etc.) The remaining costs that include yearly payments, operating and maintenance and/or payments that are normally repeated, I would use EUAC (Equivalent Uniform Annual Cost).

    2. Identify a technique relevant to each cost item

    For NPW:

    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    IT/Computer Equipment
    Signage, Business cards and stationary

    For EUAW:
    Inventory
    Individuals salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Loan Payments
    Website hosting and maintenance

    3. What strategy or strategies would you adopt in order to increase chances of breaking even in a business start-up?

    If I were to start-up a business of my own, I would first make sure that the business I am starting up is based off the fundamentals of supply and demand in the current economic situation. Otherwise, starting it up would not be wise if there is not enough people in need of your service. I would adopt breakeven analysis and make sure to being with low initial fees and start-up costs to ensure a neutral start of my business. I would also try to minimize costs for materials without sacrificing quality and/or safety. Just because it isn’t a “popular” brand doesn’t mean it is not functional. Obviously with every business, one has to use common sense in order for it to succeed. Understand your customers, know how to keep track of your money, and make sure to plan before any big purchase, decision, or action.

  78. #80 by Stephanie GIenger on May 5, 2014 - 12:33 am

    1.
    I would use most NPC for the beginning process and the costs following my initial purchases I would use EUAC to keep everything as regulated as possible.

    2.
    NPW:
    Incorporation Fees
    Permit and/or License Fees
    Down-payment on office space or rent for a commercial lease
    Office furniture and supplies
    Initial inventory
    Signage, Business cards and stationary
    IT/computer equipment

    EUAC:
    Inventory
    Your salary, employee salaries, wages, and commissions
    Rent, Utilities, Internet, phone, etc.
    Professional services, such as an accountant and a lawyer
    Taxes and Insurance
    Marketing and Advertising
    Website hosting and maintenance
    Loan Payments.

    3. The first thing to do is have a product that is in high demand that not many other businesses have to offer. After that, I would have a great marketing team get my business up and running. The price of my product would have to be compared to other businesses that have similar products to mine and have the price lowered enough to be attractive to the customers but still enough to make a good profit. I would definitely think of good marketing strategies of attracting customers and have a friendly atmosphere so the customers feel comfortable and don’t feel as if I am trying to rip them off.

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