Lesson 6 Money: Module 1- Cost Structure
This is the sixth lesson of the Foundational Course in Entrepreneurship V1.
You have now reached a point in your entrepreneurial journey where you need to take stock of your
finances and check how profitable your venture looks. Remember, you did a quick back-of-the-envelope
calculation earlier for a glimpse into the viability of your business idea! You will now take this further and
create your Basic Financial Plan.
Leaning Objectives:
Identify and estimate the various types of costs involved in starting a new venture
Cost Structure
In this module, you will learn about the various types of costs involved in a business
and how they are classified. Further using Basic Financial Plan Template, you will
identify the various costs relevant to your venture.
All of you have made certain estimates regarding cost in Back of envelope exercise,
where you all have assumed some of the cost which your business will incur when
starting your business. By the end of development of MVP you must have gained the
fair idea regarding the starting and operational cost of running your business, which
also means that you must know all your cost based on your expected revenues to
understand your expected profitability of business.
Profit= Revenue-Cost
Types of cost which business usually incurs:
Start-up Cost
Fixed Cost
Variable Cost
1. Start-up Cost (Capital Cost): Cost which an enterprise incurs even before start
their business.
Most businesses fall into one of three categories:
Brick-and-mortar businesses
Online businesses,
Service providers.
You’ll face different startup expenses depending on your business type.
This is the sixth lesson of the Foundational Course in Entrepreneurship V1.
You have now reached a point in your entrepreneurial journey where you need to take stock of your
finances and check how profitable your venture looks. Remember, you did a quick back-of-the-envelope
calculation earlier for a glimpse into the viability of your business idea! You will now take this further and
create your Basic Financial Plan.
Leaning Objectives:
Identify and estimate the various types of costs involved in starting a new venture
Cost Structure
In this module, you will learn about the various types of costs involved in a business
and how they are classified. Further using Basic Financial Plan Template, you will
identify the various costs relevant to your venture.
All of you have made certain estimates regarding cost in Back of envelope exercise,
where you all have assumed some of the cost which your business will incur when
starting your business. By the end of development of MVP you must have gained the
fair idea regarding the starting and operational cost of running your business, which
also means that you must know all your cost based on your expected revenues to
understand your expected profitability of business.
Profit= Revenue-Cost
Types of cost which business usually incurs:
Start-up Cost
Fixed Cost
Variable Cost
1. Start-up Cost (Capital Cost): Cost which an enterprise incurs even before start
their business.
Most businesses fall into one of three categories:
Brick-and-mortar businesses
Online businesses,
Service providers.
You’ll face different startup expenses depending on your business type.
