How To Start A Business Part 2
1. How much capital do I need?
The capital depends on the kind of business one is planning to engage in.
This includes the working capital requirements for months until the
income/collections start pouring in or are enough to finance the operation.
Let us take an example of how to estimate the capital for a small
restaurant that is not franchised.
Assumptions:
1. Place is leased
2. Sole proprietorship
3. Place is going to be renovated
1. Equipment /Dining/Kitchen/Big and small such as Oven, Stove,Grills, Coffee makers/
Refrigerators /Freezers/Cooking Pans etc.
2. Glasses/Diningware/Utensils
3. Furniture/furnishings such as tables and chairs for Dining area, Office Desks/Filing cabinets/ etc.
4. Office Equipment such as Cash registers, vaults, PC's, printers, etc.
5. Renovation which includes non-detachable cabinets/counters/lighting fixtures
etc.
6. Food and drinks inventory- the non-perishable ones and with longer shelf lives.
7. Food inventory-refers to highly perishable and should be good only for a number of days requirement (initial)
8. Supplies (Kitchen and Office)
9. Working capital Requirement -this represents the number of weeks or months
budget for recurring expenses until enough cash flow is generated from the business.
For a restaurant which are mostly cash transactions, this would be shorter than
the businesses where collections average 30 days.
1. Food inventory (especially if there is no established suppliers yet, once the restaurant business is known, suppliers come and extend credit as much as 30 days.
2. Salaries and Wages for personnel
3. Rent or lease
4. Miscellaneous- a catch all account for expenses that do not fall under
the general categories
5. Organization cost-includes licensing, business permits, promotional expenses
before the launching and MY PAYMENT as consultant for preparing the business
plan for you. hehehe
Next: Sourcing of Capital
business plan,capital
posted by cathy at 6:36 AM
