Costs in the Business Plan and Business Loans – What You Should Consider When Creating Your Financial Plan

Only with a solid cost planning, you can estimate whether or from when your start-up profitable. If the costs are too high, the best turnovers bring you nothing – because then it just does not hang too much with you. That’s why it’s so important that you think about what you’re going to spend on your business and how much – and where you can save.

The good news: unlike your sales, the costs can be predicted relatively accurately. For example, you can research important factors such as labor costs or rents without too much effort. For material costs, purchase prices or the cost of certain services, you can have price lists or offers sent.

Do not forget to mention in your business plan how you calculated your numbers. You can add particularly relevant statistics or documents as an attachment to your business plan to show your readers that your information is on hand.

Costs are not equal to costs

Costs are not equal to costs

Not every euro you spend is reflected in your financial plan in the same way: while ultimately all spending reduces your bottom line and ultimately leads to higher capital requirements – but how and when exactly that happens depends on the type of cost , Thus, investments are added to your capital requirements and deducted directly from the payment of your liquidity reserve, but they do not affect 100 percent on the profitability of your company. That’s because the money is not gone, just changed its shape. Instead of some 100-euro bills, you now have a nice new computer. However, he loses value year after year, and you can write off this loss of value, so deduct from your profits. The amount of time you can write off which investments does not depend on how careful you treat your computer. There are precise specifications that the tax office determines.

For a perfect overview, divide the costs into four areas in your business plan:

  • Formation expenses
  • investments
  • Direct (variable) costs
  • fixed costs

Start-up costs & investments

Start-up costs & investments

Unfortunately, before you can make money with your business idea, you have to spend money first: registering your company with the trade office, rebuilding and equipping your business premises or purchasing expensive production machines. These costs, which arise for you once at the beginning of your independent activity, can be differentiated in start-up costs and investments.

The start -up costs include every euro you spend to prepare for your own business. These include, for example

  • notary fees
  • fees
  • Costs for start-up consulting
  • training
  • patents
  • Traveling expenses

If you clear all the receipts, you can later prove your expenses to the tax office and deduct them from the tax. You can even do that if you do not start a business after all. In that case, you can deduct your expenses from your personal income tax as business expenses.

While the start-up costs are incurred even before the actual start-up, you better spend your investments directly afterwards. Investment is all expenditure on things that are used over a longer period, such as:

  • machinery
  • computer
  • Furnishings
  • real estate

The investment costs vary greatly from foundation to foundation. Depending on the business idea and size of the company, they can range from zero euros to almost infinite. A freelance copywriter may just need a computer to start with, while a technology-based startup needs to budget millions of dollars for its machines, fleet, real estate, and software.

Objects you already own, such as a computer, you note as an investment and at the same time as an equity investment in the company. So you increase your equity .

Variable costs and fixed costs

Variable costs and fixed costs

Variable or direct costs are the part of your current expenses that depends directly on sales : they rise and fall with the sales figures. These are typically expenses for material, goods purchase, packaging and logistics.

Let’s say you want to open an ice cream parlor. Then count your expenses for the ice cream ingredients, for waffles, paper cups, coffee and cold drinks at direct costs. Seasonally, they will be much higher in summer than in winter.

In contrast, your fixed costs always remain the same, whether you sell a lot or a little. Labor costs often account for a large proportion of the fixed costs. In addition there are business expenses such as rent, insurances, energy etc.

To take our example again: For your ice cream parlor, you will have to pay the full rent and at least a basic staff in the winter months – even if you make significantly less sales during this time.

The cost of your expenses can not always be recognized at first glance. Wages and energy costs can also be counted as variable costs, provided that they depend on the capacity utilization. The fee for the waitress, who helps out only in fine weather in your ice cream parlor, you can, for example, to the direct costs count.

When you create your financial plan with Catherine Morland, our payroll assistants will help you determine your costs. For example, you can enter your direct costs individually based on the revenue item and select the applicable VAT rate. In the case of labor costs, we support you in calculating the additional costs. They vary from employee to employee and depend, among other things, on which health insurance he belongs to and whether he pays church tax. For the sake of simplicity, we have entered a lump sum of 23 percent for the additional costs – of course you can adjust these presets at any time individually.


You can have similar charts automatically created by Catherine Morland based on your numbers.

The cost structure

The cost structure

The relationship of the cost types to each other describes the cost structure of your company. It is a key building block of your business model and should be well thought out. Among other things, it depends on, among other things, how high your economic risk is – and with it, whether and on what terms you get financing from your bank.

Often, higher direct costs are associated with a higher trading margin (that is, the difference between the purchase price and the selling price). This is best illustrated by an example: imagine two textile companies earning their money selling shirts. One man makes the shirts himself. He needs production facilities, has to pay the wages of the seamstresses, leases warehouses and, and, and. His monthly fixed salary, machinery, energy and real estate costs are high. Its variable costs, on the other hand, are limited to spending on the substance being processed and packaging / logistics. The money he gets for every shirt he sells remains, for the most part, in the company.

His competitor focuses on selling and purchases finished shirts from a supplier. Although it has a much smaller trading margin, because a fairly large proportion of the sales price goes directly to the supplier, but also low fixed costs.

From this it follows – greatly simplified – that higher fixed costs for founders are associated with a higher economic risk. They are not easily influenced when, for example, sales suddenly break away. If your sales figures fall short of your expectations, your liquidity will soon be jeopardized by high fixed costs! For this reason, it is usually smart to keep the fixed costs as low as possible in the face of high uncertainty and to accept higher variable costs with a lower margin. Exceptions should be well justified in your business plan: Why would you prefer to create certain services or products instead of buying them ready?

Why cost planning in the business plan is so important

Why cost planning in the business plan is so important

How complex and exhaustive it is to list your costs when creating your business plan depends on your business idea. But even if you start “only” in the home office and without employees, you should carefully calculate how much you spend. This will help you with your profitability forecast, your capital requirements planning and your liquidity calculation and at the same time provide you with a first clue for your price calculation. Unfortunately, too many start-ups still start their own businesses without ever having thought about the costs of founding them! Here it is very helpful to take a look at comparable business plans to get a sense of what costs are common and how typical cost items affect your own business model. That’s why at Catherine Morland we offer more than 30 successfully financed business plans from a wide variety of industries that can serve as a role model and guide for our users.

The financial plan for a communication consultancy shows you how to do everything right as a freelance sole proprietor in the business plan creation. You can see this in addition to over 30 other real plans on Catherine Morland in the full version.

Real business plans of successful entrepreneurs
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Real business plans of successful entrepreneurs This and everything for business planning exists with us.

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Although it is a relatively lean start-up, the founder’s expenses for travel, telephone & internet, insurance, tax advice, advertising and office rental amount to several thousand euros annually. Their financial planning shows that, after deduction of costs, their revenues will initially not be enough to secure their existence. Therefore, our founder plans a financing through the start-up subsidy, which – as we know today – is actually granted.

Without a thorough calculation of the costs, the founder would probably have realized too late that her start-up in the first few months is not yet worth it. She might have had to give up her self-employment, although her communications consulting has long been established.

The founders of Heimplanet, whose full business plan you can also find at Catherine Morland (even if you have not yet registered!), Had to pay much higher costs. The two inventors Stefan and Stefan founded this company a few years ago to bring an inflatable tent on the market, which impresses with its functionality, its design and its low weight. In their financial plan, the two indicate their costs, on the one hand, separately according to the distribution channels “own online shop” and “specialized trade” and, on the other hand, according to revenue items. The tables have been supplemented by short explanations, so that all questions of the readers have been answered in a coherent and understandable way – not least because of this clarity they should have to thank that their bank has granted them the hoped-for financing.

Incidentally, the case of the two tent inventors refers to the fact that your cost planning is also related to the legal form that you choose for your company: For a corporation such as GmbH or UG, the salary that you pay out as an entrepreneur becomes the personnel costs of the company added. For partnerships such as a GbR, what you need to live for you is listed separately as a private withdrawal.

At Catherine Morland, your cost of living will automatically be added to the right type of cost, depending on which legal form you have selected.

Four steps to a well-founded cost overview


Granted, the cost thing is a bit complicated and you’re probably starting to feel a little bit upset now. But do not let it frighten you. Step by step, you will succeed in a solid cost planning – we support you.

This is the best way to do it:

  1. Make a list of all costs

First, ask what you spend money on in your business. Write down everything that comes to your mind on a piece of paper. Then you sort your list: The big items you move up, the small down.

For example, if you want to open an online store, shipping costs will be a high percentage of your running costs and higher up your list. However, if you plan to start your own business with a cabinetmaker, you can post the shipping costs below.

  1. Subdivide your costs by cost type

Now you have a first overview of the most important cost drivers of your foundation. Next, do you set about adding expenses to each cost type: are these start-up costs, investments, direct or fixed, labor, or operating costs? Read other business plans for inspiration

  1. Determine the current prices

Find out the prices you need to calculate for the most important items. You can consult trade fairs, talk to suppliers, get price lists or study statistics. Even discussions with industry experts can provide valuable information.

  1. Estimate your needs

In the end it gets a bit complicated again, because now you have to assess your future needs as accurately as possible. This is closely related to your sales expectations, especially as far as direct costs are concerned.

One last tip: Do not bother with the cost planning too early in the details, but start with a rough thumb bearing, which you refine in the course of your planning process on and on. Consider again and again, if you could not change the cost structure of your company and if so, which advantages and disadvantages would be associated with it. You can also look at and compare scenarios to better understand your cost structure: how are your costs going when your sales soar or break suddenly?

No matter if you start your own business with a small sole proprietorship or if you want to launch a million-dollar startup right away: Be aware that the costs of your company are not natural and unalterable. You can influence her! Take this opportunity and think in advance of your startup, what the optimal cost structure may look like. Then you have the best prospects for a sustainable and successful start-up!