Capital requirements

- It takes money to run a business…and there are three critical numbers you'll have to know.…How much capital do you have on hand?…What's your burn rate?…And how much runway do you have.…Capital on hand is how much cash do you have in the bank.…Your burn rate is how much money…are you spending every month…to pay your staff to run your business.…And then runway is…if you look at how much cash you have on hand…and assume no more money comes in,…how long do you have before you run out of money.…

Obviously, the longer the runway is…the safer your business is.…You'll also know to create a perspective…on when you'll hit cash flow breakeven,…which is when is the business generating enough money,…enough profit to pay the cost of running…that business every month.…And your investors are going to want to know…at what point are you going to hit cash flow breakeven.…Because that's when you don't need…any more money invested.…Your business plan should also spell out…where you plan on getting your capital from?…Will it be from the owners,…