How much money do you need to start a small auto supply business?

Answer 1

equity depends on expense . The answer is :-

1) sale = +

2) expenses = -

3) profit = - 33 % to 100 % of business sale ( depends on whether you are into manufacturing , licensed or purely trading business )

Cash required = 1) cash in hand =promoter's cash

2) investor's cash

3) debt

Sale =expenses + profit /loss

total expense :

1)operational expenses : short term + rolling

2) fixed expense

3) other expense

1) staff expenses =short term

2) electricity =short term

3) communication and traveling expenses =short term

4) price of quantity of auto supply = rolling expense

5) interest paid = rolling expense

6) price of location = fixed + rolling expense

7) cost of storage = fixed + rolling expense

8) tax = other expense

9) cost of machines/auto supply parts = fixed expense

interest = 1) interest on promoter's money = -5%

2) interest on investor's raised = - 6%

3) interest on debt raised = - 12%

other expense : 1) tax : a) income tax = - x % of profit ( depends on country )

b) sales tax = x% of sale ( depends on country/state )

c) municipal tax = fixed charge

d) other tax = any protection money

2) depreciation : a) Depreciation on total cash =-10 %

b) exigency = 10 % of exigency cash

This 30 % exigency expense takes care of any losses and any abnormal requirements

cost for one year of operation = money required =expense +30 % of expense

Cash required = 3 years * cost for one year of operation