Type of business to start
The type of business I would like to start is a real estate business in the form of a partnership of about two to three business partners. We would be able to accumulate our resources upon starting the company. We will be able to share business risks equally and share profits according to the percentage of investments for each member. It would involve buying plots of land and building homes from scratch, then selling and renting to desired buyers.
Costs and expenses to track for the business
This type of business would involve different costs and expenses that would want to be tracked as the company progresses. Some of the costs include;
1. Costs of location
Buying the plot of land for construction would require spending vast amounts of money depending on the number of fields we want to buy.
These are the type of costs that involve paying electricity bills, water bills, and many more, and they are typical costs that may change every month.
1. Business insurance
Getting insurance for the business helps to cover all types of risks incurred during construction or those that may happen after the company has been started, including fire and life insurance costs during construction.
The government imposes taxes on every type of business; therefore, this type will also include taxes as a cost or expense during operation.
1. Business fees such as licensing and other permits must be catered for when starting this type of business.
Importance of the costs and expenses to the business decision making
These types of fees listed above are essential generally since;
It saves time and money since failure to track business costs effectively may collapse the business.
They also help optimize the cash flow in a business, maximize tax deductions, and manage cash flow effectively.
It also helps to compliment a fellow shareholder who might want to see the amount spent while they were not around or if the task given was for a specific partner.
Alfie Marsh, Spend journal; How to track business expenses in 6 steps. January 5, 2022.
Geoff Charles, article; how to track business expenses and manage company costs. January 19, 2021
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