Paul
Paul

Paul's start up case study

Paul has identified the startup costs for his business and broken it down into three considerations - assets he intends to bring into the business, anticipated one-off costs and monthly ongoing costs for the next three months.

1.  Assets he will bring into the business

assets he will bring into the business

Paul will bring assets worth $3,400 to start his business. This is a great start because he does not need to purchase or fund assets he already owns and can contribute to the business.

Paul then starts to look at anything else he needs in order to start the business:

2.  Anticipated one-off costs to start business

one-off costs to start business

3.  Monthly on-going costs

monthly on-going costs

Summary of Costs

summary of costs

Paul has identified that he needs to find funding to cover $9,438 in start up costs.

He has taken another looked at his personal bank accounts and found that he can cover this startup cost himself. Paul’s investment in the business now consists of:

fund startup

So the total amount of investment that Paul will have in his business is $12,838.


Discussion

Paul identified more items to bring into his business such as a printer, desk and chair. These will also become assets of his business, along with his laptop computer and mobile phone and the value of these assets will form part of the capital that he contributes in setting up his business.

Paul has discovered that he will need a contingency as part of his costs and has added 10% to the sub-total of his projected costs. Do you think his contingency amount is sufficient? Justify your answer.

Post your thoughts to the Comments section.


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This article is from the free online course:

Online Business: Pricing for Success

RMIT University