The Basics of a Start
docx
keyboard_arrow_up
School
Strayer University, Washington *
*We aren’t endorsed by this school
Course
363
Subject
Finance
Date
Jan 9, 2024
Type
docx
Pages
5
Uploaded by CaptainKookabura3804
The Basics of a Start-Up
Antonio Rivera Jr
Fin 317
Dr. Sadu Shetty
11/03/2023
Start-Up Needs
When opening a business, it is important to ensure that you plan thoroughly. Ensure you
plan for the start-up cost and know what financing you need. Financing can come from
borrowing money from friends and family or using a credit card to pay the start-up cost. To start,
I will break down my estimated start-up cost to know how much funds I need to start my
business. These will be the estimates that I believe will help my business start and operate for the
first three months of opening.
Cash- $2,000.00
The cash for the start-up would be used to pay for shipping costs until a profit is earned.
Equipment- $500.00
The equipment cost to start my business is low because until it becomes a larger operation, it is
currently handmade by me.
Rent for space to operate- $3,500.00.
Rent is currently expensive and taking a physical location will be one of the most expensive
parts.
Labor- $0.00
To start the business, it will be a one-man operation until I can start pulling in a profit and then
focus on expanding.
Misc. (Petty Cash)- $4,000.00
At the start of my business, I would like my misc. funds to be double my cash in case I have any
emergencies come up.
Capital
To obtain capital to start my venture, I would first like to ask my family and friends for
funds. To start my business, I would like to try a bootstrapping method to open. If that fails to
work, I will next have to take on debt to open my business. I would rather take debt on than give
away any of my business. When working with investors, a business will often trade a percentage
of its business in exchange for capital. As an entrepreneur, I would not give up any of my
company for as long as possible. There are other options such as crowdfunding and angel
investors, but both require time and attention. I would like to focus on the business. Funding a
new venture is always one of the hardest parts but if you can obtain funding, it will enable you to
start turning your vision into reality.
Ratios
The first ratio that I will use to measure my business performance is the current ratio. A
current ratio is a liquidity ratio that indicates to investors and analysts how a company can
optimize the current assets on its balance sheet to satisfy its current debt and other payables. It
gauges a company's capacity to pay short-term obligations or those that are due within a year. A
current ratio below the industry average may suggest a higher risk of distress or default;
similarly, if a company has an extremely high current ratio compared to its peer group, it may
suggest that management is not making the most use of its resources. Generally, a current ratio
that aligns with the industry average or slightly higher is deemed acceptable (1). The reason I
have selected this ratio is because after operating for a time it will tell me if my business is
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
operating effectively. If my business can pay off short-term debt and still has money left over, it
means that I am not using borrowed money to operate my business.
The second ratio I have selected is the Gross Profit Margin. A company's gross profit
margin is the amount of money it makes after deducting the cost of goods sold (COGS). In other
words, it's the money left over after deducting operating expenses. This financial metric is often
expressed as a percentage of sales and is also sometimes referred to as the gross margin ratio.
Analysts use gross profit margins to evaluate a company's financial health. Sales and COGS can
be found on an organization's income statement. A high gross profit margin is desirable and
indicates a company is operating efficiently, while a low margin is evidence that areas need
improvement. It is one of the key metrics analysts and investors watch as it helps them determine
whether a company is financially healthy. Companies can also use it to see where to improve by
cutting costs and/or improving sales (2). A high gross profit can indicate that a company is
healthy which is why I choose this as my second ratio.
Sources
1.)
Jason Fernando. March 25, 2023. Current Ratio.
https://www.investopedia.com/terms/c/currentratio.asp
.
2.)
ANDREW BLOOMENTHAL. June 12, 2023. Gross Profit Margin.
https://www.investopedia.com/terms/g/gross_profit_margin.asp#:~:text=Gross%20profit
%20margin%20is%20the,as%20the%20gross%20margin%20ratio
..
Related Documents
Related Questions
Integrative Problem Samantha Sampson retired a few years ago at the age of 55. Because she is bored with retirement and still relatively young, Samantha has considered starting a business of her own. However, she doesn’t know anything about business. As a result, Sam has hired the consulting firm for which you work to give her a brief tutorial on business and finance. To begin her lesson, Ms. Sampson has asked you to answer the following questions:
What does it mean to maximize value?
What is sustainability, and how is this concept related to finance?
arrow_forward
I need help with question 6 on how to create the customer pivot table as given. Also, can you provide the steps of how to do that in Excel? Also, please provide the steps in order to solve the problem for Finance.
arrow_forward
Integrative Problem Samantha Sampson retired a few years ago at the age of 55. Because she is bored with retirement and still relatively young, Samantha has considered starting a business of her own. However, she doesn’t know anything about business. As a result, Sam has hired the consulting firm for which you work to give her a brief tutorial on business and finance. To begin her lesson, Ms. Sampson has asked you to answer the following questions:
What is finance, and why is it important to understand finance to run a successful business?
What are the major areas of the finance discipline?
How has finance changed since the beginning of the twentieth century?
What are some of the financial trends that are currently of interest to businesses?
What is value, and how is it determined?
What does it mean to maximize value?
What is sustainability, and how is this concept related to finance?
What is lean manufacturing? How is the goal of value maximization related to lean manufacturing?
arrow_forward
Integrative Problem Samantha Sampson retired a few years ago at the age of 55. Because she is bored with retirement and still relatively young, Samantha has considered starting a business of her own. However, she doesn’t know anything about business. As a result, Sam has hired the consulting firm for which you work to give her a brief tutorial on business and finance. To begin her lesson, Ms. Sampson has asked you to answer the following questions:
What is lean manufacturing? How is the goal of value maximization related to lean manufacturing?
arrow_forward
Integrative Problem Samantha Sampson retired a few years ago at the age of 55. Because she is bored with retirement and still relatively young, Samantha has considered starting a business of her own. However, she doesn’t know anything about business. As a result, Sam has hired the consulting firm for which you work to give her a brief tutorial on business and finance. To begin her lesson, Ms. Sampson has asked you to answer the following questions:
d.What are some of the financial trends that are currently of interest to businesses?
e. What is value, and how is it determined?
f. What does it mean to maximize value?
g. What is sustainability, and how is this concept related to finance?
h. What is lean manufacturing? How is the goal of value maximization related to lean manufacturing?
arrow_forward
Analyzing a cost-volume-profit graph
Nolan Rouse is considering starting a Web-based educational business, e-Prep MBA. He plans to offer a short-course review of accounting for students entering MBA programs. The materials would be available on a password-protected Web site; students would complete the course through self—study. Rouse would have to grade the course assignments, but most of the work would be in developing the course materials, setting up the site, and marketing. Unfortunately, Rouse’s hard drive crashed before he finished his financial analysis. However, he did recover the following partial CVP chart:
Requirements
Label each axis, the sales revenue line, the total costs line, the fixed costs line, the operating income area, and the breakeven point.
It Rouse attracts 300 students to take the course, will the venture be profitable Explain your answer.
What are the breakeven sales in students and dollars?
arrow_forward
Mini Case
Suppose you decide (as did Steve Jobs and Mark Zuckerberg) to start a company. Your product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video recorders, and cell phones. Your initial market is the student body at your university. Once you have established your company and set up procedures for operating it, you plan to expand to other colleges in the area and eventually to go nationwide. At some point, hopefully sooner rather than later, you plan to go public with an IPO and then to buy a yacht and take off for the South Pacific to indulge in your passion for underwater photography. With these issues in mind, you need to answer for yourself, and potential investors, the following questions.
What is an agency relationship? When you first begin operations, assuming you are the only employee and only your money is invested in the business, would any agency conflicts exist?
If you expanded and hired…
arrow_forward
Mini Case
Suppose you decide (as did Steve Jobs and Mark Zuckerberg) to start a company. Your product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video recorders, and cell phones. Your initial client base is the student body at your university. Once you have established your company and set up procedures for operating it, you plan to expand to other colleges in the area and eventually to go nationwide. At some point, hopefully sooner rather than later, you plan to go public with an IPO and then to buy a yacht and take off for the South Pacific to indulge in your passion for underwater photography. With these plans in mind, you need to answer for yourself, and potential investors, the following questions:
1. Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation?
2. Briefly explain how regulatory agencies and legal…
arrow_forward
BUSINESS AND CONSUMER LOANS
arrow_forward
PROMOTING MYSELF (Chapter 8)• Create an outline for each of the following promotional strategies you plan to use as you begin your career. o Advertising: What does your resume look like? What does it say about you? Also consider what your social media profile says about you. If a prospective employer were to look at your Facebook, LinkedIn, or Twitter profile, would they like what they saw? Would it reflect the image of a thoughtful, driven professional?o Sales Promotion: Do the companies you want to work for offer unpaid internships? If so, how do you go about applying for them? How can you adjust your personal financial situation to take an unpaid internship if it helps to advance your career?o Personal-Selling: What will you say in an interview that will convince a prospective employer that he or she is better off with you than without you?o Public Relations: What do your colleagues think about you? Would your professors or classmates recommend you? Think about what you can do to…
arrow_forward
Create notes a financial proposal to seek funding for your new uber business venture in st.kitts and nevis.
1. Business Market – Size of the market, the competition, channels of distribution
arrow_forward
Create notes for a financial proposal to seek funding for your new uber business venture in st.kitts and nevis.
1. Business Market – Size of the market, the competition, channels of distribution
2. Financing requested – How much money will be required to fund the start-up? In whatcurrency? Provide a justification for the amount requested.3. Source of Funding – From where will the business seek funding, commercial bank, venturecapitalists or any other? Provide a detailed justification for the choice.4. Management Structure – Provide an Organizational Chart, identify key personnel, theirrespective roles and the number of employees.
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you

Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning

Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Related Questions
- Integrative Problem Samantha Sampson retired a few years ago at the age of 55. Because she is bored with retirement and still relatively young, Samantha has considered starting a business of her own. However, she doesn’t know anything about business. As a result, Sam has hired the consulting firm for which you work to give her a brief tutorial on business and finance. To begin her lesson, Ms. Sampson has asked you to answer the following questions: What does it mean to maximize value? What is sustainability, and how is this concept related to finance?arrow_forwardI need help with question 6 on how to create the customer pivot table as given. Also, can you provide the steps of how to do that in Excel? Also, please provide the steps in order to solve the problem for Finance.arrow_forwardIntegrative Problem Samantha Sampson retired a few years ago at the age of 55. Because she is bored with retirement and still relatively young, Samantha has considered starting a business of her own. However, she doesn’t know anything about business. As a result, Sam has hired the consulting firm for which you work to give her a brief tutorial on business and finance. To begin her lesson, Ms. Sampson has asked you to answer the following questions: What is finance, and why is it important to understand finance to run a successful business? What are the major areas of the finance discipline? How has finance changed since the beginning of the twentieth century? What are some of the financial trends that are currently of interest to businesses? What is value, and how is it determined? What does it mean to maximize value? What is sustainability, and how is this concept related to finance? What is lean manufacturing? How is the goal of value maximization related to lean manufacturing?arrow_forward
- Integrative Problem Samantha Sampson retired a few years ago at the age of 55. Because she is bored with retirement and still relatively young, Samantha has considered starting a business of her own. However, she doesn’t know anything about business. As a result, Sam has hired the consulting firm for which you work to give her a brief tutorial on business and finance. To begin her lesson, Ms. Sampson has asked you to answer the following questions: What is lean manufacturing? How is the goal of value maximization related to lean manufacturing?arrow_forwardIntegrative Problem Samantha Sampson retired a few years ago at the age of 55. Because she is bored with retirement and still relatively young, Samantha has considered starting a business of her own. However, she doesn’t know anything about business. As a result, Sam has hired the consulting firm for which you work to give her a brief tutorial on business and finance. To begin her lesson, Ms. Sampson has asked you to answer the following questions: d.What are some of the financial trends that are currently of interest to businesses? e. What is value, and how is it determined? f. What does it mean to maximize value? g. What is sustainability, and how is this concept related to finance? h. What is lean manufacturing? How is the goal of value maximization related to lean manufacturing?arrow_forwardAnalyzing a cost-volume-profit graph Nolan Rouse is considering starting a Web-based educational business, e-Prep MBA. He plans to offer a short-course review of accounting for students entering MBA programs. The materials would be available on a password-protected Web site; students would complete the course through self—study. Rouse would have to grade the course assignments, but most of the work would be in developing the course materials, setting up the site, and marketing. Unfortunately, Rouse’s hard drive crashed before he finished his financial analysis. However, he did recover the following partial CVP chart: Requirements Label each axis, the sales revenue line, the total costs line, the fixed costs line, the operating income area, and the breakeven point. It Rouse attracts 300 students to take the course, will the venture be profitable Explain your answer. What are the breakeven sales in students and dollars?arrow_forward
- Mini Case Suppose you decide (as did Steve Jobs and Mark Zuckerberg) to start a company. Your product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video recorders, and cell phones. Your initial market is the student body at your university. Once you have established your company and set up procedures for operating it, you plan to expand to other colleges in the area and eventually to go nationwide. At some point, hopefully sooner rather than later, you plan to go public with an IPO and then to buy a yacht and take off for the South Pacific to indulge in your passion for underwater photography. With these issues in mind, you need to answer for yourself, and potential investors, the following questions. What is an agency relationship? When you first begin operations, assuming you are the only employee and only your money is invested in the business, would any agency conflicts exist? If you expanded and hired…arrow_forwardMini Case Suppose you decide (as did Steve Jobs and Mark Zuckerberg) to start a company. Your product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video recorders, and cell phones. Your initial client base is the student body at your university. Once you have established your company and set up procedures for operating it, you plan to expand to other colleges in the area and eventually to go nationwide. At some point, hopefully sooner rather than later, you plan to go public with an IPO and then to buy a yacht and take off for the South Pacific to indulge in your passion for underwater photography. With these plans in mind, you need to answer for yourself, and potential investors, the following questions: 1. Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation? 2. Briefly explain how regulatory agencies and legal…arrow_forwardBUSINESS AND CONSUMER LOANSarrow_forward
- PROMOTING MYSELF (Chapter 8)• Create an outline for each of the following promotional strategies you plan to use as you begin your career. o Advertising: What does your resume look like? What does it say about you? Also consider what your social media profile says about you. If a prospective employer were to look at your Facebook, LinkedIn, or Twitter profile, would they like what they saw? Would it reflect the image of a thoughtful, driven professional?o Sales Promotion: Do the companies you want to work for offer unpaid internships? If so, how do you go about applying for them? How can you adjust your personal financial situation to take an unpaid internship if it helps to advance your career?o Personal-Selling: What will you say in an interview that will convince a prospective employer that he or she is better off with you than without you?o Public Relations: What do your colleagues think about you? Would your professors or classmates recommend you? Think about what you can do to…arrow_forwardCreate notes a financial proposal to seek funding for your new uber business venture in st.kitts and nevis. 1. Business Market – Size of the market, the competition, channels of distributionarrow_forwardCreate notes for a financial proposal to seek funding for your new uber business venture in st.kitts and nevis. 1. Business Market – Size of the market, the competition, channels of distribution 2. Financing requested – How much money will be required to fund the start-up? In whatcurrency? Provide a justification for the amount requested.3. Source of Funding – From where will the business seek funding, commercial bank, venturecapitalists or any other? Provide a detailed justification for the choice.4. Management Structure – Provide an Organizational Chart, identify key personnel, theirrespective roles and the number of employees.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
- Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning

Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning

Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning