Raising Entrepreneurial Capital

norms for numerous types of businesses. If no standard data can be located,

then estimating capital requirements inevitably involves common sense and

educated guesswork.

The key to effectively forecasting asset needs in this way depends on an

understanding of the relationship between projected sales and asset s. The

amount of a firm’s sales is the primary driving force of future asset needs.

We need sufficient assets to produce goods in sufficient quantity to meet

sales forecasts. This is not an endless ramp but applies within a range of

output. A minimum investment in assets to open the business can generally

be identified. We must be above some efficient ...