Finance in Business
For a business to be successful in the increasingly competitive
business environment detailed financial plans and accounts must be
drawn up and followed consistently. With so many financial demands
placed on small it is vital that all cost are calculated and accounted
for prior to the businesses start-up date, these costs are referred to
as 'start up costs'
Start Up Costs
Start-up costs are any payments that my business needs to make prior
Rent of premises and equipment.
The layout of the equipment I require in my shop has to allow for easy
cleaning. Equipment must be placed in areas that do not harbour dirt.
As I am entering a competitive market it is important that the design
of my shop is appealing to prospective customers. It should be
colourful and practical. I will utilise a small expenditure on
maintenance in order to achieve this.
Safety must be a priority to anyone setting up a business that deals
directly with the public. There are tough regulations set by the
government and these must be followed meticulously.
List of costs -
As my business requires specialist equipment such as frying equipments
it is vital that costs are kept to a minimum. I aim to rent, as much
of the equipment I require as possible, in order to ensure that start
up costs are kept low.
The equipment I need is listed below with prices -
· Fish Frying Range - £1235.00
· Chipping Machine - £234.00
· Fridge - £149.76
· Deep Freeze - £313.09
· Batter Mixer - £97.50
· Microwave - £116.93
· Tables - £120.98
· Sinks - £240.87
· Utensils - £54.00
· Till - £365.00
· See-Through Drinks Fridge - £213.43
£6,000.00 per annum (as stated in 'location' section) 6000 divided by
4 = £1500
· Gas and Electricity - £127.00 from Scottish Power for 3 months
· Water - £50.00 from North West Water for 3 months
· Wirral Globe - £876.00 for 3 months.
· Radio City 96.7 - £988.00 for 3 months.
· Fitting of specialist equipment - £1200.00
· Tiling and decoration etc. - £450.00
TOTAL START-UP COSTS - £4790.56
TOTAL RUNNING COSTS (FOR 3 MONTHS) - £3451.00
Total capital required - £8241.56
Why do businesses use loans to raise capital for the start-up of their
Often prior to a businesses start-up the prospective owners will
calculate that large volumes of finance must be raised in order for
the business to achieve its primary aim - to survive in the
competitive business environment. The easiest and safest way to
generate this finance is by acquiring a loan. Loan companies offer
security that cannot be offered by private financing, such as
insurance policies. Also loans allow for consistent repayments and