Total Project Cost
One important question of the business planning process is the total cost of implementing the project. The question deserved special consideration at the start and throughout the process. It is considered before starting a business as one of the three major questions in the Three-Way
Fit model: Do people want or need the product? Does the business fit with my lifestyle? Can I afford the business? It is considered during the planning process for budget and financing purposes.
Total Project Cost is the first step to calculating the cost of a project and determining from where funds will be obtained.
Words to Know:
Determining Capital Investment
Answer the following questions to help you complete a total project cost:
What types of assets – land, property, equipment, or supplies – would you need to start the project?
How much capital would you need to start the business? The amount includes fixed assets and working capital (start-up expenses and 2-3 months of expenses).
Where would you obtain the capital?
Would you need to borrow? Why is this loan good for your business? How will you repay the loan? When will you pay it back?
You can use the following chart to write down preliminary figures for the total cost of your project: