Chapter Name: Determine the capital requirements of the new venture
Description:Teaches learners how to assess the funding needs of a business based on startup and operational costs.
Purpuse:To enable accurate planning of financial needs.
Rational:Understanding capital needs is crucial for securing adequate financing.
Chapter Assessment
Scope of Practical Skill
Key Requirement 1: Determine the capital requirements of the new venture
Learners should calculate the total capital needed for the new venture, considering startup costs, operational expenses, and contingencies.
Assessment Questions
Assessment 1 : Funding requirements and capital structure are identified and analysed for the new venture.
Identify the types and amounts of funding needed for your new venture and describe how capital will be structured (e.g., equity vs. debt).
Assessment 2 : Realistic fixed asset requirements are determined for the new venture.
List all physical and tangible items your new business needs to operate, and justify their inclusion.
Assessment 3 : Pre-operating costs are identified and calculated to an exact value.
Calculate and explain all expenses incurred before your business starts operating.
Assessment 4 : Monthly operating costs - including a cash flow statement - are compiled for the new venture.
Identify and total all recurring monthly expenses and compile a projected cash flow statement for the first few months.
Assessment 5 : The financial viability of the proposed new venture is assessed and estimation made of the break-even point.
Describe how you will assess whether your business can sustain itself financially, including calculating the break-even point.