Direct Cost- c o s t directly related to the products it services Estimate how long it will take before you can
can pay your bill
your business sells.
Direct Material Cost- all the money your business spends on
the parts and materials that become part of, or directly
related to, product or services you make or sell
Direct Labor Cost- are all the money your business spends on
wages.
Indirect Cost - are all other cost except direct cost. Ex. Rental,
interest.
04-14-23
SYB #6 Estimate your Start Up Capital ROI - Return of
Investment
Money You need to start your business (Depends on what
business)
Two types of Payments:
1. Investment- are money you will
have to pay out before your business can start.
2. Initial Working Capital- initial operating payments. Money
you have to pay out
during the first few months of your business.
How are you going to estimate your startup capital?
Investment
.1 Visit similar businesses and see the
supplier they have. They can also give you
advice. Carefully evaluate the prices a s
well as the quality of materials begore you place order.
2. Initial Working Capital
SYB 9
through your revenue.
Sources if Start-up Capital
The money to start your business must c o v e r t h e ff.
1. Payment for everything you need before you start
operating
2. The money to help you run your business before your sales
are high enough to pay your business expenses.
3 ways to buy Resources
1. Use your own money. (Equity Funds)
2. Borrow money to buy Resources. (Debt Funds) expect
interest in loans.
3. Rent or lease your resources. Means you will also pay more
than the paying price.
Major Sources of Money to start business
1. Private Savings
2. Borrowing money from friends or relatives who want to
invest in your business. (Partnership)
3. Borrowing from banks or other financial institutions.
4. Special loans or grants from government if your business
qualifies.
How To Apply for a Loan Convince lenders that:
1. You really need the money and you have.
2. You have considered other ways of financing your business.
3. You can Repay them