Presentation Transcript

1. 4.00 Explain the Fundamentals of Financing a Small Business

   4.01 - Identify the costs associated with owning and operating a small business.
2. Start-up Costs One time expenses that entrepreneurs incur when starting a business
3. Types of Start-up Costs Deposit to rent or lease a space Equipment, furniture, fixtures Decorating and remodeling Beginning inventory Deposits for utilities Accountant and lawyer fees Licenses and permits Advertising and promotion for grand opening Contigency fund – cash set aside for unexpected needs of the business
4. Factors that Affect Start-up Costs Nature of the business Size of the business Inventory required Time between starting the business and earning income from sales Operating expenses that must be paid before cash is received from sales
5. Nature of the Business Manufacturing Retail Wholesale Service
6. Continuing Costs Fixed Costs – expenses that remain the same for a period of time, must be paid regardless of sales Office salaries Insurance Rent or Lease
7. Continuing Costs Variable Costs – expenses that may change from month to month, depending on the needs of the business, increase and decrease based upon sales Salaries and wages for employees Advertising and promotion Supplies and materials Utilities