Estimating costs for business plan documents can be as simple or as difficult a task as you make it – and, in turn, your pro forma can be as precise or as loose as your estimates. If you're opening a new retail store in an existing building that's currently vacant, and the store that used to occupy the space was similar, you could easily obtain extremely accurate figures for lease rates, monthly utilities, permits, etc. Consulting fees, contractor payments, franchise fees, etc. could all be very similar to whatever the last tenant paid, provided you could meet with them.
But what if you don't have access to these figures? There are tools on the Internet that can help you make confident estimates. Websites allow you to plug in your square footage and determine going rental rates in the market, and you could easily contact the electric company, for example, and obtain an estimate of the going rate for power to a unit like yours. For other costs, don't be afraid to plug in a working average. The goal of the business plan, at least on the first pass at building a financial model, should be to create a working pro forma that you can tweak later as you learn more exact figures. Do not let the lack of one specific figure hold you up or prevent you from completing the financial model – by its very nature, a business plan pro forma projection is tentative in nature. It is an estimate. Costs, expenses, your break-even point, your investor's return, even the terms and timeline of your loan could be subject to change, so don't agonize over perfection at the expense of getting the business plan completed to draft form.
If you still feel stuck on cost estimates, a one-stop solution is using a professional business planning company that has broad access to past plans with verified figures. At MasterPlans, we have built more than 8,000 financial models in Excel, Alight, and various softwares to help start-ups and existing businesses alike make a sound estimate at their profit potential. We've worked in virtually every industry, and have watched market trends come and go for almost a decade. Our expert financial modelers can help you determine a reasonable cost estimate for any expense or sales items. Call a consultant today at 877-453-2011 and mention your interest in cost estimates.
