Calculating Your Business Startup Funding

Would you like to know how do you calculate your business startup funding?

Calculating Your Startup Costs

There are three basic types of capital expenditure that require funding in the start up phase, working capital, fixed capital and reserve capital.

Working capital is the money needed for the daily operations of your business.

It includes things like, salaries and wages, rent, advertising costs, raw materials, inventory, etc.

Fixed capital is for purchasing premises, plant and equipment etc.

For example, if you are starting a coffee shop, you will need to buy crockery, cutlery, a coffee machine and an industrial dishwasher, among other things.

Reserve capital is just that, an amount of capital held in reserve for the inevitable rainy day. The amount of reserve capital you need will vary depending on how much experience you have running a small business. An experienced business person will need far less reserve capital than someone with little or no experience.

So how much funding do you need?

Would a Template Come in Handy About Now?

If you could do with a template to help you, just download and print a copy of the Capital Requirement Worksheet. Follow the instructions on the worksheet to calculate your setup costs.

Remember, as you are working on this exercise, it is fair better to over estimate your costs and end up with a bit of cash left over, than to run out before you have everything you need to open the doors!

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