As you try to decide how much capital you will need to start your business, it is helpful to know what all of your costs will be. Regardless of the kind of capital you have to work with, permanent or borrowed or a combination of the two, there are distinct categories of capital that every business requires.
The first is start-up funds, which include money for furniture, fixtures and machinery.
Next, you will want to consider overhead, which includes the cost of rent, utilities, cost of credit, delivery costs and fixed salaries.
Other equally important capital needs include inventory or parts; working capital, which is the money you will need to conduct business, such as petty cash, postage and cash-on-delivery payments; and personal living expenses.