Chapter 13: Start Up

Investment
BY TRAVIS SCHEFER

Whats Ahead?
In this presentation, we will cover all of
Chapter 13. This chapter is about Start Up
Investments, and we will cover the subjects below:
Ways to acquire a start up investment
Important Vocabulary for this chapter
Equations that relate to the topic

Vocabulary (1 of 3)
To better understand this chapter, lets go over some
vocabulary.
Financing- Raising money for a Business
Start Up Investment- A one time sum required
to start a business
Cash Expenditures- Money requirements for
start up materials

Vocabulary (2 of 3)
Cash Reserves- Money reserved for an emergency

fund and Fixed Expenses

Fixed Expenses- A certain amount of money
reserved that should cover the business financially
for three months
Payback- The amount of time (months) that it
takes for a business to make its money back

Vocabulary (3 of 3)
Asset- Everything owned by the business that has a

monetary value
Equity- Value of the business on a specific date

13.1
At some point, entrepreneurs will need some type of

financing
Using Personal Savings allows you to finance your
business and allows you to be the Sole Owner
Using Credit Cards allows you to buy items for your
business without making you pay immediately

13.2
Entrepreneurs usually raise money for their business
in three ways:
Borrowing from the Bank
Borrowing from Credit Unions
Borrowing from Relatives and Friends

Equations (1)
Start Up Expenditures
+ Emergency Fund(1/2 Start Up
Expenditures
+ Reserve for fixed Expenses (3 months)
Start Up Investment

Liabilities
+ Owners
Equity
Assets

Bank Debt Ratio (%) = (Monthly Debt Payments Monthly

Income) x 100

Start-Up Investment Net profit Per month =

Payback (months)

Equations (2)
Bank Debt Ratio (%) =
(Monthly Debt Payments Monthly Income)
x 100

Liabilities
+ Owners Equity
Assets

Conclusion
Entrepreneurs will eventually need some type of
financing. There are three ways to finance your
business:
1. Use your personal Savings
2. Borrow from the bank/credit union
3. Borrow from friends or family
You are the sole owner of the business if you pay for it
yourself, but you would have more time to pay the
bank/credit union if you borrow money.