Pitch Perfect: Finance research

So for the Pitch perfect brief I was responsible for researching how much it would cost to start up a studio! Can't say I was too excited about this but here we go.
Providing it doesn't hamper your ability to operate effectively, keep your start-up costs to a minimum. Spending more will place greater pressure on you to generate more money quicker. Saddle yourself with too much debt and you will increase your chances of failure.

You must take into account all your start-up and operating costs for at least 12 months ahead. Relatively small expenses can mount up, while neglecting to include some in your costs will mean you're simply storing up some nasty surprises for later.

Your start-up costs could include equipment and installation, a vehicle, road tax and insurance, premises, fixtures and fittings, initial stock or materials, launch marketing and advertising items, legal and professional fees, possibly a licence, maybe staff uniforms, etc.Premises-related costs can provide a shock for less-experienced business people. First you have to find them, possibly refit and redecorate them, maybe make them safe, secure or legally compliant.If you decide to rent, a landlord will expect a deposit and rent upfront. You might also have to pay a service charge.All of these elements need to be included in your cost calculations.

I could not wrap my head around all this information,so basically what I did was asked my dad for advice, because he has his own business in Lithuania. Also he as this amazing ability of explaining the most complicated things in a very simple way.So he gave me a pretty long lecture, here are some key points:

He advised me to add up what costs we would do for the start up- computers, tables desks, business  licences, registration fees, etc.
Then make a separate monthly costs calculation, so this would include rent, insurance, bills, soft wear licenses. Then calculate the bear minimum it would take us to survive a month if we were to spend the minimum amount of expenses. Then calculate the annual costs and that would show us how much we would need to charge, as we would know how much we need for expenses, then double that because you need include any additional costs and profit. Another thing we should consider is bank loans, how much of a percentage they charge for business loans. That is pretty realistic to think about loaning money for a startup. Another thin I was really surprised about to find out was that in Lithuania, you have to pay 40% of your income for taxes. I thought that was in sane, because it is almost half! How are you supposed to break even?! Anyway in UK the situation is a lot better, the taxes are only 20% so I figured starting a business here would be a lot of better. Then I went on trying to calculate what my dad advised me to.

I went over this information with Wing and  we both agreed we would have to hire an accountant. I started looking up how much does it cost to hire an accountant, Wing mentioned that one of her friends studies accounting and he would charge about 5000 per year. But that is just for students, obviously a professional one would cost significantly more. Another thing I remembered from last years business start ups seminars was that it is better to pay yourself minimum wage and pay the rest in dividends.

We’ve estimated that if we were to take up a project for 3 months worth of time, the cost would be around 64.000 pounds. This is assuming we would charge double the expenses and we would pay ourselves minimum wage plus dividents. If we were to look into a start up campaign or an investor, a realistic goal to break even would be in five years time. As soon as we would start making profit, we would look into expansion possibilities such as hiring programmers for game making, we also have the upper hand on international networking (Wing and I thought we would have an upper hand on this because we come from foreign countries) so we would try and cast a net on a broader market.

So in the end I came with these numbers: