The majority of new small businesses involve the owner's family in some way. This involvement may range from having the spouse do the bookkeeping to having the children work part time after school.

Jumping into a new business with both feet may be too risky for some people. In fact, most people believe it is best to stick one toe in to test the waters first, and most new businesses start on a part-time basis, while the owner is still working elsewhere.

All new businesses should prepare a monthly cash flow forecast for the first year and an annual forecast for the first five years of the business.

When small business owners plan their cash flows, they usually assume that sales will occur on a regular basis. For example, if they estimate that they will have $120,000 in sales revenue, they typically presume that they will do $10,000 per month in sales and plan accordingly. But the real world isn't always like that. Some businesses are seasonal, while others endure various ups and downs. As a consequence, the business owner who has planned for $10,000 in sales revenue for a month in which he gets only $2,000 may experience a cash shortage because he hasn't planned properly.

Your actual cash flow results will probably be different from the amounts you have budgeted in your cash flow forecast. If you're fortunate, the variance is on the positive side. If your sales end up being, say, 10 percent higher or your expenses are 10 percent lower than you budgeted, it's a nice situation to be in.

Product vendors may be an excellent source of sales data. If your new business is one that will have high inventory levels, product or warehouse facilities may be a potential source of sales data.

The Bureau of the Census can provide you with a lot of information that can help you to estimate your projected sales revenue. For starters, Census demographic information can tell you the numbers and types of people who live in a specified geographic area, classified by age and sex. It can also tell you the number of households, the average household size, and the average, median, and per capita income levels in a given area.

Your estimated sales figure is probably the most difficult number that you will have to come up with in planning your new business. There are many variables and assumptions that come into play when estimating sales. Your location, marketing, competition, and business knowledge will have significant influences on your sales volume.

To get an accurate read on how much money you'll need to keep your business running in the first 90 days, you'll need to figure out how much revenue your business will produce in those 90 days.

Suppose you have a submarine sandwich shop located in Cedar Rapids, Iowa. Here's a look at the cash you'll need in the first 90 days of operation. For a look at the cash you'll need to get the shop off the ground, using the same example, see our case study on startup costs.

What will it cost you to run your new business? Here's what you need to consider when you're figuring out how much it will cost you to keep the business afloat:

Suppose you want to open a sub sandwich shop located in Cedar Rapids, Iowa. Here's a look at the startup dollars you'll need to get your business off the ground.

If you decide to open a retail business with a storefront (as opposed, for example, to a mail order business), you'll have some special cost considerations that a home-based business won't have. So if you intend to open a retail business with a storefront, keep these extra costs in mind.

At this point, we're attempting to figure out how much money you need to open your business, with the objective of determining whether you'll need to obtain a loan for some portion of it. But don't forget that the interest on any loans you take out becomes part of the money that you need!

There are all sorts of startup costs that don't fit neatly into any category but that still need to be considered if you're to get an accurate picture of how much it will cost you to get your business off the ground. Here's a look at them:

One of your biggest outlays, of course, will be the cost of setting up your physical space: your storefront, your office, your plant, or the room in your home.

As a new business owner, one of the first decisions you'll have to face is whether to hire someone to help you. And, of course, there are other related decisions: if you decide you need someone for 40 hours per week, should you hire one full-time employee or two part-timers? And so on.

As a new business owner, your insurance needs will depend upon the type of business you run. For example, a self-employed computer consultant who operates out of her home will have insurance needs that are significantly different from a 10-employee company that manufactures explosives. The cost of insurance, therefore, will also depend upon the type of business you operate.

Every new business has unique advertising and marketing needs. The amount you will have to spend will depend upon the industry you're in and the competition you'll have, as well as your personal philosophy.

Among the professionals you may need to work with are a lawyer, an accountant, and, in some cases, a marketing or business consultant. You might as well think of them as being part of your business family because they'll play an extremely important role in your business's success or failure.

This is where we help you get down to figuring out how much it will cost you to open your doors for business on day one.

Before you start planning for the cash needs of your new business, you must determine how much cash you will need to survive. You have to plan cash needs during the startup and first few months of your new business. It would be nice to think that your business will be profitable from the day you open the doors, but that's not realistic.

One of the first steps in examining your business idea is to do some research to get to know more about your market. Presumably you already know that a market exists for your product. If you have an idea for a business but you're not sure whether a market for it exists or is big enough to support your business, you are getting ahead of yourself. If that description applies to you, you'll need to take a step back and look at finding the right small business for you.

One of the most common reasons small businesses fail is that the owners underestimate how much money they will need to start the business. It always seems to cost more than they thought. Have you ever heard the old adage about planning a trip from the U.S. to Europe: Plan what you should wear and how much it will cost, then halve the clothes and double the money. Perhaps we need a similar adage about starting a small business.