Capital

To start your own business you will need seed money of your own plus sufficient cash to maintain a positive cash flow for at least the first year. Many businesses can be initiated on a very small scale with a small investment. Then, as the business grows and you gain experience, cash flow from your business can be used for growth. In some cases you don’t need capital to hire other people because you might start by doing everything yourself. The “do it yourself” start is a good way to learn everything about your business and also makes you better qualified to delegate work to others later on. You can control your risk by placing a limit on how much you invest in your business.

The following templates can help you determine your initial financing. You’ll need this information to set up initial business balances, and to estimate startup expenses. Don’t underestimate costs.

Business Financial Projections

Expenses per month

When thinking of capital consider the following Issues

Labor costs

This is specifically for those businesses that needs to employ workers. In this, one needs to set the number and the wage that will be paid to the workers that will be employed.

Startup expenses

These are expenses that happen before the beginning of the plan, before the first month. For example, many new companies incur expenses for legal work, logo design, brochures, site selection and improvements, and other expenses.

Registration and Licensing

As explained in the registration and licensing section, there are some amount that every person in need of doing business should pay to the necessary bodies so as to make it legal. These charges should also be accounted in the startup capital

Tabs below will give you more information on registration and licensing

Startup assets

Typical startup assets are cash (in the form of the money in the bank when the company starts), and in many cases starting inventory. Other starting assets are both current and long-term, such as equipment, office furniture, machinery, etc.

Startup financing

This includes both capital investment and loans. The only investment amounts or loan amounts that belong in the startup table are those that happen before the beginning of the plan. Whatever happens during or after the first month should go instead into the Cash Flow table, which will automatically adjust the Balance Sheet.

Startup loans

For more information on startup loans, click here