Estimate expenses . A realistic estimate of expenses along with contingencies is essential. Developing scenarios based on low, moderate, and high costs will provide sufficient variation to cover contingencies. Among the typical cost items are rent, equipment, utilities, supplies, transportation, legal and accounting, permits and licenses, payroll, and payroll taxes. Every business must be prepared to use some of its own capital for expansion and research and development. Failure to undertake the appropriate expansion could result in the delay of time to market for product launches or delivery of product. Therefore, the new owner must develop an adequate financial plan to ensure that the required capital is available to meet timely expansions and future contingencies.

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