Ever tried to launch a new period and was faced with the decision to price it. It sounds insane to buy a product for $10 and sell for $11 but yet a lot of businesses engage in this practice because they have no idea how much it truly costs to bring the product to market. This is why cost management is important. Most often the indirect costs of launching a product are often ignored and not apportioned to the total cost. This is why sometimes it seems like you should be making a lot of money but yet the bottom line never shows it. A budget could help you think through all the possible scenarios you will need to successfully launch your product. A budget does not have to be long and tedious as long as it is relevant to the tasks at hand. While developing your budget do not be afraid to ask the difficult questions like what will happen if my most optimistic sales do not occur. In circumstance where fixed costs are high, honestly answering this question is very important as you will need a minimum amount of sales to break even.
When starting out and testing the market try to keep as much of your expenses variable and do not forget to contact an expert to see how different scenarios could affect the taxes you will owe. Taxes are one of the biggest expenses that erode profit and with proper planning you could maximize profits and minimize taxes.