What belongs in a startup budget?
List the payments required to open, then fund the cash shortfall after opening. Keep each part visible.
The direct answer
Capital to arrange = pre-opening payments + operating cash reserve + undrawn works/equipment contingency. An equipment quote covers only part of that budget. Put each payment on a timeline and describe the operating format before comparing totals.
This is the method used by the pilot. A premises inspection, contractor scope, paid roster and observed sales plan are still needed before using it as a site-specific budget.
1. List what must be paid before opening
- Premises works, installation, signage and making the site usable.
- Equipment, delivery, commissioning and systems.
- Refundable deposits, pre-opening rent and prepaid licenses or premiums.
- Opening inventory and supplies.
- Paid recruitment, preparation, training and launch work.
Keep deposits and opening stock distinct from expenses. They consume cash but have different later accounting treatment. Record each payment once; do not charge the same stock again when tracing working capital.
2. Follow the operating cash gap
Forecast receipts and payments month by month with an explicit sales ramp and a full paid team. Operating cash reserve = chosen cash floor + deepest cumulative operating cash deficit over the stated horizon. The pilot uses 60 months.
Undrawn contingency is additional available cash. It is not an expense or depreciable asset until spent. A reserve can finance continuing losses; that does not establish a viable operating plan.
3. Check the budget before using it
This checklist stays in the current page. It is not submitted or saved by the site.
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 |
| Separate undrawn contingency | Additional uncertainty allowance, excluded from entered operating flows | $5,000 |
| Total funding required | Opening payments + reserve + separate contingency | $70,000.00 |
| Funding still to arrange | Requirement − $50,000 committed funding | $20,000.00 |
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 an actual planning case
Inspect Austin Restaurant opening payments and reserves →. The amounts are calculated from a mixture of published inputs and assumptions. They are not a contractor estimate or an approved opening budget.
Change the assumptions → and inspect the cash schedule. The schedule downloads in your browser; its settings do not transfer to a purchased workbook.
Check sales as well as capital
Read the operating break-even thresholds → and separate profit from cash →. Definitions and exclusions are in the methodology →.
Financial information disclaimer
Published research and calculations support business planning and education. They are not personalized financial, investment, tax or legal advice, and they do not guarantee costs, revenue, profit or financing. Estimates depend on the stated format, location, source periods and assumptions. Check the requirements and commitments that apply to your circumstances.