Determining Your Start-Up Cash Needs

Before you determine where you’re going to get your start-up funds, you need to understand that your business’s initial cash requirements include not only one-time start-up costs but also working capital and a reserve. Here’s what these requirements mean:

One-time start-up costs: Start-up costs include such one-time expenses as legal fees, licenses and permits, utility and lease deposits, furniture and fixtures, inventory, leasehold improvements (such as remodels or additions to the store or office space you rent or lease), signage, and everything you need to initially open for business. Consult another business’s profit and loss statement (P&L) or a pro forma P&L sample on a business plan template for a listing of the typical day-to-day ongoing expenses you’re going to incur (or see Chapter 14).