How much do you think is appropriate to save up before starting a new business?

Question

I just wanted to see what people thought was reasonable. Some businesses you can create from nothing IMO. And youre probably going to tell me, well what kind of business? How about just a broad general answer? I think 10k is sufficient as a ball park figure, but what do u think?

Answer 1

You need to be able to live for about three months from the time that cash started to come it. in most cases.

At first most business owners live on very little, the less you need the better off you are, stay out of debt lower home payment ect. that way profits are real nice if they are just that profit.

Look at it this way each month you have to make a cake. would you rather have a big cake and thin icing, or a small cake with lots of icing that. if you have a thin cake and icing gets sweeter and sweeter and life is great.

Answer 2

Who said that algebra would not be useful in the real world? The answer to your question is as simple as:

a + b x c - d = z

Now, a is your personal expenses while b is your business expenses (rent, utilities, salaries, inventory, insurance, etc). The letter for c has to indicate how many months before you reach your goal(s) for profitability. That's how much money you need. If d stands for the amount you have available to you now and the assets you have, then the result of z is the answer to how much you need to save up.

Your industry and how many employees and whether you will own or rent a building and many other factors must be answered to plug in the appropriate values for your question.

Any algebra majors out there???

Answer 3

You can never have enough cash...

If you don't know what you'll need, it sounds like you need to create or revise a business plan. Plan your business like its military strategy and tactics. What are you going to sell to whom and when, where and how? Once you start answering these questions and adding up all the little incidental expenses, you will have a better idea. Most startups fail. Not to dampen your parade, but you need to be prepared for that. Its lots of work and don't plan on making big profits for several years. If you can keep your head above water, you are doing well. Drop all pre-concieved ideas about what you think about business. Be innovative. Times are changing. Follow your insticts, learn to critique your ideas and others.

Answer 4

I started my own business with about $150, buying a couple books, a domain name, and hosting; while I kept working at my full time Network Engineer job. I still work full time at that job, but my online business is growing all the time.

So, depending on what you're trying to accomplish, it could be little of nothing.

If you're curious, the books I bought are Rosalind Gardner's Super Affiliate Handbook, and Perry Marshall's Definitive Guide to Google Adwords. Both great books.

I wrote a short review of both of them on my blog which is listed in the source below.

Answer 5

save up??? Depending on the business, and your own equity, you could borrow whatever you need. Or possibly get a grant.

Answer 6

Hot dog stand = $3000
Semicondictor factory = $1,000,000,000

Answer 7

I would plan for enough money to cover my fixed overheads (staff salaries, rentals, utilities, etc) for 12 months.

Answer 8

Two years operating expenses is standard.

Answer 9

You can save little because they sucessive enterprenuers start small and keep on expanding.