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How to find out if your small business idea will make money

February 12, 2020 | Entrepreneurship
How to find out if your small business idea will make money, CDC Small Business

This post, about the numbers behind your small business idea, originally was published by Venturize, a blog powered by our content partner Small Business Majority, a national organization that advocates for small business owners

There are many excellent reasons for starting a business: being your own boss, loving what you do and enjoying the challenge of getting your enterprise up and running. But at the end of the day, you need your business to make money.

Now that you know that your business idea has legs, it’s time to see if your business makes sound financial sense.

Starting any business costs money and time. Even starting small with a home-based business can involve the costs of registering your business and office expenses like getting a new computer, chair and desk. Other businesses can have higher start-up costs, including things you may not always think of like intellectual property law fees, a new website or extensive marketing costs. If you’ll need a physical business location, you’ll need to consider expenses like signing a lease, build-out costs, purchasing expensive equipment or hiring workers.

Knowing your business model is key to understanding just how expensive it will be to start your business.

Look at the numbers

Tools that can help you calculate the cost of starting your business include:

Opportunity cost

Don’t forget to look at the opportunity cost of using your time and money to start your business. If you weren’t working on your business, how else would you be spending your time? If you’re digging into personal savings or investments to make the numbers work for your business, what interest rate would your money get if it wasn’t invested in your company? Is it still worth it to open your business?

Starting a business is no small task. Deciding to turn your idea into reality should come after serious thought and consideration. But while being an entrepreneur is hard work, it’s also exciting.

You think you’re ready to take the next steps to turn your business idea into reality? Check out our other resources on finding financing and writing a business plan. Also, stay tuned for the next post in our “Turn your bright idea into a business” series.

In case you missed it:


CDC Small Business Finance offers several loan options for business owners who want to grow their operations and are planning for their long-term needs. Contact our loan experts about your business and they’ll work to match you with a financing plan that best suits you. Reach us at loaninfo@cdcloans.com or (619) 243-8667.

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