Once you have decided the work breakdown structure of the startup, the very next step is to estimate the cost associated with each activity.

There are two factors that need to be considered while estimating the cost of your startup.

[ I ]You have enough budget – Estimate the cost associated with each activity that you have defined in work breakdown structure.


Website Design of E-commerce:-

  1. Domain Purchase = C1
  2. Hosting Plan = C2
  3. Website Build = C3
  4. Logo Design = C4
  5. Payment gateway = C5

So total cost of startup activities is ∑Cn (n=1 to n)

Here the target is to capture all the possible cost associated with each activity of startup so that in later stage you don’t find any abrupt change in your cost estimations.


[ II ] You have limited budget – Here, the approach is reverse as used in the above case. You need to allocate the budget to each activity based on the priority.

One way of cost reduction is to outsource the minimum activities and do the maximum work possible by yourself.

Say your startup team need to hire website developers, so try to do the other work of website design like UI Design, Logo Design etc by yourself.


Website Design of E-Commerce:-

Total Available Budget = C

  1. Domain Purchase = C*X1%
  2. Hosting Plan = C*X2%
  3. Website Build = C*X3%
  4. Logo Design = in-house activity
  5. Payment gateway = C*X4%

So total cost of startup activities is ∑C*Xn% (n=1 to n)

Here the target is to allocate the budget to each activity in optimum way. You can decide the priority of each activity based on in-house and outsourced activities and allocate the maximum budget to outsourced activities.


Wish you luck for your startup.

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