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Financial planning: How much money do you need?
 Cash.
Capital. Funding. Whatever you choose to call it, starting a business
takes more than talent and hard work. It takes money. Of course,
to be a successful business owner, you need a dose of the following:
- A knowledge of the business
- Luck (it never hurts)
But without sufficient money, you're back to dreams.
Don't get lost in the visions of fortune and freedom before you
ground yourself in the reality of making it work.
Most small businesses are undercapitalized right from
the start, according to the experts. Without budgets and a simple
cash flow statement, you risk condemning your business to failure
because of lack of money. Enter your project prepared for the financial
challenges, and you'll stand a much greater chance of thriving.
In order to ensure a profit for your business, you
have to think ahead in terms of expenses and income. By preparing
a budget as your "profit plan," you map out projected incomes and
outflows for your company. Some experts recommend preparing a master
budget for the entire year, then breaking it down into manageable
sections, such as quarters or months.
To determine the capital costs portion of your budget
for the first year of business, you'll have to start by totaling
what you have on hand, what you'll need to open up shop and what
you'll need to operate for the first quarter.
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