X2.1 - Sales and Costs Flashcards
1
Q
Main Types of Costs
A
TARTING UP EXPENSES- Costs of registering the company, building a website, preparing an office, etc.
BUYING ASSETS- equipment, machines, etc your business needs to operate. (Note- in most cases we will rent a shop/factory/office if we need it, but not buy it).
INVENTORY- the first batch of materials we will need to make or sell products.
2
Q
Operating Costs
A
We will also need to consider our operating costs, and how much cash is
needed for the first months when not generating enough sales to cover costs.
In addition, how much cash (liquidity) we should try to have on hand as a
general policy.
