How to realize how much capital you will need for startup of your business

1. Create a Start-up Plan.  You will need to make a list of the expenses you will incur for the following:

   Legal - incorporation, forms, contracts Stationery - letterhead, business cards, envelops Brochures Consultants Insurance Office Equipment - furniture, computers, copy machine, fax machine, etc. Rent Telephone Utilities Payroll Taxes Advertising Accounting Inventory

2. Figure out the expenses on a monthly basis for an entire year; project your expenses at 10% above your estimate to cover incidentals.

3. Create a business plan to figure out how you are going to sell your product(s) or service(s).

4.  List your resources for obtaining capital for your start-up.  For example, savings account, family contributions, credit cards, loans.

5.  Create a spreadsheet to determine what your cash flow will be.  Add up your monthly expenses and subtract it by the funding you have obtained and the products you plan to sell.

The spreadsheet will show you what your cash flow will be and how much money you will need to start up your business.

You will need to be conservative in your numbers and don’t think that you are going to begin selling your products or services right away.  Don’t spend all your money on setting up your business and then neglect to have money to advertise.  This is the most common mistake made by small business start-ups.  If you need funding to complete your one-year business plan, see how to obtain funding for your business start-up.