Starting a business may begin with a dream, but it doesn’t become a reality with financing. According to the U.S. Small Business Administration, calculating startup costs is launchpad.

“The key to a successful business is preparation,” the SBA said. “Before your business opens its doors, you’ll have bills to pay. Understanding your expenses will help you launch successfully.”

Calculating startup costs isn’t just about raising funds but creating a financial foundation for the new business. In addition to attracting investors and/or securing loans, the startup calculation allows business owners to estimate profits, conduct a break-even analysis and save money with tax deductions, according to the SBA.

The first step is to identify startup expenses.

There are common startup costs you’re likely to have no matter what. Look through the following list, and make sure to add any other expenses that are unique to many businesses, including office space, equipment, communications, utilities, insurance, professional services, employee salaries, advertising and marketing and others.

“Once you have your list of expenses, you can estimate how much they’ll actually cost,” the agency said. “This process will be different for each expense you have.”

Next comes organizing the list into one-time expenses and monthly expenses.

One-time expenses are the initial costs needed to start the business. Buying major equipment, hiring a logo designer, and paying for permits, licenses, and fees are generally considered to be one-time expenses. Monthly expenses typically include things like salaries, rent, and utility bills.

“You can typically deduct one-time expenses for tax purposes, which can save you money on the amount of taxes you’ll owe,” the SBA said.” Make sure to keep track of your expenses and talk to your accountant when it’s time to file your taxes.”

All that’s left is adding those expenses up to get a good picture of how much capital is needed to proceed with launch.