Optional Method to Calculate Needed Capital

Optional Method to Calculate Needed Capital
Many businesses can get a reasonable picture of their financial future by using the following
formula.  If the business will start making sales very soon after opening, you may decide to multiply
monthly fixed expenses by a number smaller than six.
Total Required Capital =
Six Months of Fixed Expenses + Asset Purchases + Start-up Expenses
Column 1    Column 2
Monthly Fixed Expenses
Salaries (include owner)    __________
Payroll Taxes at 12%     __________
Rent       __________
Marketing and Advertising    __________
Supplies      __________
Telephone  & Utilities     __________
Insurance      __________
Maintenance       __________
Legal and Accounting     __________
Miscellaneous      __________
(Other)_________________    __________
Monthly Fixed Expense Sub-total   _________   x 6 = _________
Asset Purchases
Purchase of Land and Building   ___________
Decorating and Remodeling     ___________
Fixtures and Equipment (plus installation)  ___________
Deposits on Rental Property and Utilities  ___________
Beginning Inventory     ___________
Asset Purchase Sub-Total       __________
Start-up Expense You Pay Once
Legal and Accounting Organization Costs  ___________
Licenses and Permits     ___________
Initial Advertising and Promotion   ___________
(Other)______________________________  ___________
Start-up Expense Sub-total       __________
Total Estimated Cash Needed to Start (Add Column 2)    __________

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