1 / 7

Essential Start-Up Costs and Financing Options for New Businesses

Starting a business requires careful financial planning. Key startup costs include equipment, supplies, furniture, vehicles, and legal fees. Entrepreneurs often consider various financing options, such as equity capital and debt financing. Equity capital involves raising funds by offering ownership stakes, sourced from personal savings, friends, family, or venture capitalists. On the other hand, debt financing entails loans from banks and trade credits. Understanding the pros and cons of each option is vital for sustainable growth and operational success.

usoa
Télécharger la présentation

Essential Start-Up Costs and Financing Options for New Businesses

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CLS 5 Accounting

  2. Start-Up Cost • Money Needed to Start a Business • Examples • Equipment and supplies • Furniture and fixtures • Vehicles • Remodeling • Legal and accounting fees

  3. Equity vs. Debt financing • Equity Capital – cash is raised in exchange for an ownership stake in the business. • Personal Savings • Friends and family • Private investor • Partners • Venture Capitalists • Debt Capital – money raised by taking loans • Banks • Trade Grant • Venture Capital – source of equity financing for small businesses with exceptional growth potential and experienced senior management • Less than 1 percent of all ventures

  4. Equity Capital • Also known as risk capital. • High risk, high reward.

  5. Types of Equity Capital • Personal Saving – 2/3 of entrepreneurs use only their own money to start the business • Friends and family – rich uncle • Partner – find a partner with similar goals • Private investor(Angel) – nonprofessional financing source. • Venture Capitalist – Experienced professionals.

  6. Types of Debit Financing • Operating Capital – the money a business uses to support its operations in the short term • Banks – the primary source of operating capital • Trade Capital - businesses grant these to other businesses for purchase of goods and services.

  7. Financing • With a partner, come up some pros and cons for each type of financing.

More Related