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How did you estimate the amount it was going to cost to do your project? How close were you?

Plus a million follow-up questions: were you over or under? By how much? What did you over- or under-budget for?

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John Wrot!
11-time creator
495
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How to estimate? Build a detailed honest budget. 
How close were we? Within 1%.

I built our budget for our first Kickstarter in 2013.  2.5 years later when the project came to completion we were within 1%.  .7% over budgeted to be exact.  That's about $900 in extra profit!  Woohoo!  : )

Update - June 2016: I just updated the budget spreadsheet below to better explain, and with updated formulas.

Go here (and click for "Kickstarter Advice Panels" - Go to Article #7) for information on how to budget for a Kickstarter.  It contains a Kickstarter budget spreadsheet that you can download and use for your own project.  (Free!)

It's geared toward Board Games, but should work fairly well for just about anything.  All you need to do is change the titles.

Let me know if you have any questions.  I'm always open and available to answer any specific questions I can.  You can contact me here if you like or in the comments below.

Have a great project! 
Heart if this was helpful.

John Wrot!
Gate Keeper Games
Kickstarter Campus Community Adviser

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Renee Launer
7-time creator
100
Answered on

We analysed it to *death* we accounted for every penny - we weighed each reward and looked up the US and international postage rates - we included the cost of a new laptop and estimated the amount of electricity we'd use.   We priced shipping boxes, the plastic bags the product went into, the stickers that sealed the bags down.  But it's still very hard because some costs are 'fixed' (that laptop) no matter whether you just make goal or whether you sell $10,000,000 worth - and others scale with the number of rewards you ship.  Some other things like leasing a workshop or employing someone to make rewards when it's too much for you to do it cause sudden 'jumps' in the income-versus-profit curve.  So we did the math for every $10,000 increment from our minimum goal up to 50 times what we thought we could *possibly* make and made sure that we'd be happy and safe from financial ruin at every single increment.

You simply cannot over-analyze this stuff.

As others have said, postage is a major pain.   Most projects offer free local shipping - which is fairly easy to estimate - but overseas is a nightmare.   Some places have it where the size of the box matters, others where it's the weight.   If (for example) you live in the USA and you estimate that 20% of your stuff will go to Europe and 20% to Australia and you find that you get a cult following in Japan - then you might get utterly screwed on postage....but if all your overseas sales are to Canada then you'll be overpricing your international shipping for those guys.   So make BIG allowances for that.

Don't forget that you'll be paying taxes on your sales - either personal income tax or business tax or both.

Depending on the nature and complexity of your rewards, expect perhaps around 5% of your shipments to go wrong in some way - you may have to re-ship items that the backer claims went missing (maybe they did, maybe they didn't - you'll never know).   Stuff may be faulty, you'll probably end up posting the wrong thing to some of your backers.

Just analyze the heck out of it all.

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Michael Scott
21-time creator
30
Answered on

Postage is the great killer. Make sure to check all postage costs ahead of time. Make sure the end product weighs what you estimated. During production there are always curve balls, the closer your prototypes are to the end product in size and weight the better. You also need to budget for damaged and lost packages, they are a part of life. 

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Laura Dodson
4-time creator
12
Answered on

Have a finished prototype of your product before starting the campaign.  That will eliminate some of the uncertainty. Postage is a killer as well.  One of my ongoing things for KS to have is a built in postage calculator.  So if your reward weighs a pound and is being shipped to Canada, it calculates the postage for the backer.  It would save so much heart ache.

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Tom Love
8-time creator
17
Answered on

ALWAYS ALWAYS budget for postage and postage that GOES WRONG!!!

Postage is ALWAYS a surprise, even after your 3rd Kickstarter. But also postage is a real-world thing... it goes wrong.
packages are lost, products (in my case posters) arrive damaged. Remember to add this into costs and also the amount of product you make/order.

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Greg Crawford
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I am hoping to have my first program launched in the next 90 days. I understand and it appears as though costs are a huge issue, so for my "widget" (a physical product to be shipped in the US) that will be manufactured in the USA. I have the following items listed as costs and based on theses costs I can build a "Kickstarter and retail price" to determine a profit margin. 

My costs are as follows:

  • Manufacture of Widget (materials and labor)
  • Powder coating
  • Label
  • Shipping to US customers (US only) - best to have them pay for it or include it for free?
  • Shipping labels
  • Shipping envelopes
  • KS fee (5%)
  • Merchant fee 1 ($0.20)
  • Merchant fee 2 (3%)
  • Marketing - FB, Instagram, Pintrest, 3rd party blogs, etc. (3-5%)
  • Returns/"lost in the mail" (2-3%)

Taxes - what is the best way to handle this? 

Am I missing something?

Many thanks,

Greg

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Shelby Cinca
2-time creator
4
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Product itself was close, but shipping was quite off which I've learned has been a common struggle for many 1st time board game publishers.

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Earl Scioneaux
5-time creator
14
Answered on

Lots of extra budget for postage!

I nearly got seriously burned with a low estimate for international shipping and a lot more international orders than I anticipated for vinyl records.  Fortunately, in my case, my project doubled its goal so I had the financial wiggle-room to handle it... but it could have been very, very bad.

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Sam Pearce
2-time creator
6
Answered on

As well as all the good stuff about planning planning and planning your postage costs on a worst case scenario, I got a bit caught out on our first project with paying VAT on rewards within the EU. 20% VAT on every item delivered within the EU (from the UK) is a big chunk. No VAT payable outside the EU - but shipping costs are higher. You just have no way of knowing where the balance of pledges will come from so plan on the worst case scenario . . . 

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Blaine Hansen
23
Last edited on

Hey you guys :)

I've put together a little prototype meteor app to help people figure out their budgets, as well as their individual product charges, and I wanted some feedback. A test version of it is running here:

http://smartstarter.meteor.com/

What do you think? What makes sense? What's confusing? What could I add? Is it ugly? How could it look prettier? I appreciate your honest (but polite!) advice.

Thanks!

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John Brendle
1
Answered on

I set up a business plan with sbc.gov.  Which is an overview of the whole company it covers the company mission statement, goals, reseach, profit, losses, taxes, insurance, and gives a beginner good insight to what is involed in managing,and running a company. so it can be successful.

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Aman Raj
1
Answered on

I am very close to it

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Matthew Delgado
1
Answered on

How do I find a manufacturer?

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Licia Laminafra
0
Answered on

My glass heels collection shoes( VENEZIA GLASS) need for a start up: 300.000€ money for to buy all number of pair of shoes and leather.... So I need a  E-commerce As luxury Net a Portér . I need with minimum of purchasing ready to wear for meny numbers of pairs of my shoes.   About factory craftmanship quantity ( is the some for a Louboutin in Vigevano)is necesssry minimum 100 pairs and I can to start my NEWCO WITH MINIMUM 300.000€... for a pair of my shoes. 3 months for esecution and Pakaging shipment � .The price of eny model is 800.€. It will be possible  change tipology of leather and colors of the best top handmade in Italy!Is one of idea choose from Nobel of auDA advisor Market for BP!

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Licia Laminafra
0
Answered on

300.000€ minimum for my Start Up 

Prototype and new 10 pairs with the best façon of handmade in Italy. I’am Alone! Unique Designer with all knowhow about this glass Venezia shoes. To com I è with bag and bje in real sterling g crftma ship and glass egg gorgeous as my photos

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hpwarrantycheck
0
Answered on

Never really build a project

Ij start Canon