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Money Smarts
Chapter 17 Money Smarts: Start-up Costs
When you decide to start a business, one
of your major concerns is how you will finance it. Some businesses
can start on a shoestring budget (very little money needed)
while others may require a lot of money for such things as
inventory or equipment.
The first step in financing a new business
is to identify all the costs that you will have. Some costs
will be one-time expenditures while others will continue month
after month. An example of a one-time cost would be a sign
for your new business. Costs that might occur on a monthly
basis are utilities, insurance, rent, salaries or sales commissions,
inventory cost, and shipping expense.
SCORE® “Counselors
to America’s Small Business” is a nonprofit association
that provides guidance to small businesses nationwide. Go
to SCORE’s 60-Second
Guide to Financing Your Start-up Business.
Read the article and answer the following
questions.
- What are some possible costs you will have in starting
a business and keeping it going?
- Name some possible sources of funds for starting a business.
- What are some things most lenders will require when you
apply for a loan?
- What information does a lender look for in a business
plan?
- Why is it important that you practice your presentation
before requesting start-up financing?
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