Cost and Financing Example
Here’s an example. If your total start up costs are $90,000, you will need to break this amount down into capital, marketing and business support costs. Let’s say, you need $68,000 in capital, $20,000 in marketing and $2,000 in business support. You will need to break each item into a separate component and add a financing portion to it.
Both sides have to balance out.
Please remember that this is a fictional company and fictional funding sources. However, the general outline is to help the business plan reviewer understand what it is you are asking for in terms of start up costs.
Also remember for any major capital purchase, you will always provide quotes at the back of your business plan in the form of an appendix. These quotes will correspond to the start up costs.
Start Up Cost and Financing
Terra Engineering
Costs |
Financing |
Capital Costs Operating Capital $20,000 Office Renovations $ 5,000 Equipment/Furniture $ 6,000 Specialized Equipment $27,000 Software $10,000 Total Capital Costs $68,000 Marketing Costs Promotional Activities $20,000 Total Marketing Costs $20,000 Business Support Costs Professional Fees $ 2,000 Total Business Support Costs $ 2,000 |
Capital Financing Owners Equity (40%) $27,200 Government Funding (30%) $20,400 Commercial Financing (30%) $20,400 Total Capital Financing $68,000 Marketing Financing Government Funding (40%) $ 8,000 Owners Equity (60%) $12,000 Total Marketing Financing $20,000 Business Support Financing Government Funding (40%) $ 800 Owners Equity (60%) $ 1,200 Total Business Support Financing $ 2,000 |
Total Project Costs $90,000 |
Total Project Financing $90,000 |
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