|Start Up Capital||| Print || A leading cause of small business
failure is inadequate start-up capital. Before you begin your
new venture, you must realistically project not only your start-
up costs for such things as equipment, renovations, and
promotion, but also your cash flow requirements for the early
stages of operation. It often takes time to build sales levels,
yet rent, utilities and other costs are immediate. During this
time, bills are arriving faster than the customers; cash
reserves can help the business survive. Funding needed for
start-up and operation of a business is available in two forms:
(1) debt capital - borrowed funds; and (2) equity capital -
funds generated through the sale of stock, or by the investment
of the owner. The terms on repayment of debt capital vary and
are negotiated between lender and borrower. Raising capital
through the sale of stock is complex and highly regulated; you
should seek legal advice. More than half of all businesses are
started with capital invested by the