In LivePlan, there is no separate entry point for start-up costs - instead, they are entered as part of your regular forecast entries. Our original Windows software (Business Plan Pro), which was used to create the sample plan library, did have a separate start-up table. That approach was often confusing to our customers, though - it was often challenging to figure out what to put in the start-up period vs. the first month of the forecast.
So if you want to represent your start-up costs in LivePlan, we recommend setting your forecast start date to the first month that has any financial activity, instead of the month when you start earning revenue. That way, you can represent your start-up costs in the months before revenue begins.
Start-up Expenses vs. Start-Up Assets
- Expense entries are great for smaller purchases you'll use up quickly, such as office supplies or uniforms.
- Asset entries are for those large purchases of durable goods that your business will use over a period of time, such as equipment or vehicles.
With those forecast entries in place, you might also want to include an itemized list of your start-up costs in your plan. To do this, you can add a custom topic to your plan outline, and use it to describe your start-up costs as a bulleted list. The video below walks you through those steps:
Note: As mentioned in the video, we offer a free Starting Costs Calculator on our Bplans.com website.
Balancing start-up costs with start-up funding
Keep in mind that, since your start-up cost entries represent money spent, if you don't have a Financing entry to balance them, your financial statements will show you having negative profitability in the months before you start earning revenue.
Depending on your business scenario, you may want to balance these start-up entries with a representation of the funds you're using to make these purchases - for example, an Investment or Loan entry. You might already have these funds, or perhaps the entry represents funding you need.
There's no hard-and-fast rule here; there are also cases where a new business might show negative profitability in the start-up months and then start turning a profit later, after revenues begin. If you're not sure of the best option for your business, you may want to consult your financial advisor.