The direct answer
Capital to arrange = payments before opening + required cash reserve.
A quote for equipment is not a complete opening budget. Neither is a multiple of monthly expenses. Start with the operating format and place each payment on a timeline.
1. List what must be paid before opening
Build the list around actual commitments. Keep refundable deposits, equipment and opening stock separate because their later accounting treatment differs.
| Payment group | What to record | Common omission |
|---|---|---|
| Premises and setup | Fit-out, installation, signage and pre-opening work | Making the site usable, not only obtaining the lease |
| Equipment and systems | Purchase, delivery, installation and setup | A quote may exclude shipping or commissioning |
| Deposits and prepaid items | Lease and utility deposits; advance premiums | A refundable deposit still consumes cash |
| Opening stock | Initial inventory and supplies | Avoid subtracting this cash payment twice |
| Preparation | Recruitment, training, launch and local requirements | Paid preparation happens before the first sale |
2. Model the cash gap after opening
Estimate receipts and payments month by month. A business that reaches a healthy mature month can still run out of cash on the way there. Show a realistic ramp, required paid labor and the timing of each payment.
Set a minimum cash balance, then add the deepest cumulative cash deficit. If cash remains negative every mature month, a larger reserve only postpones the problem.
3. Check the budget before using it
- Every payment appears once.
- The owner’s required work is paid or explicitly valued.
- Taxes, debt payments and working capital are included where applicable, or the exclusion is visible.
- Deposits and stock are kept separate from operating expenses.
- The cash reserve has a stated horizon and minimum balance.
- Quotes, observed periods and location are recorded.
This on-page checklist is temporary and is not submitted.
Check the complete worked calculation
The numbers below use the initial worked inputs. They are a teaching case; changing the calculator updates its result above, while this worked example remains fixed.
| Measure | Calculation or scope | Result |
|---|---|---|
| Opening payments | Authored illustration; scoped payments due before opening | $45,000 |
| Cash trough | −$7,000 then −$5,000; month three +$3,000 does not remove the earlier funding need | $12,000 deficit |
| Retained cash floor | Cash to keep above that deficit | $8,000 |
| Operating reserve | Largest deficit + retained floor | $20,000 |
| Total funding required | Opening payments + reserve | $65,000.00 |
| Funding still to arrange | Requirement − $50,000 committed funding | $15,000.00 |
This is a separate authored illustration, not a localized quote or a revision to the linked research case. Do not count a contingency twice if its payments already appear in the cash schedule. Match the arrival of funding with actual due dates.
Calculations retain full input precision. Displayed amounts are rounded. Continue with the related planning guide and worksheet →
4. Trace a worked example
The Restaurant × Texas prototype shows opening payments, a separate reserve, monthly cash flow and a payback calculation using one set of assumptions. Its numbers illustrate the method; they are not local evidence.
Trace the restaurant example →Method and next step
The SBA planning resource provides a starting point for identifying opening expenses and recurring costs. Our reserve calculation then follows the stated monthly cash timeline.
Now test the sales threshold.
A funded opening still needs an operating model that works.
Calculate break-even sales →