MIYB Project 3

Financing


Background
According to the United States Small Business Association, successful business planning takes into account several aspects of designing a businsess. An integral stage in the planning phase is financing. According to the website on starting a business, financing is often what makes--or breaks a business:

While poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second. Whether you're starting a business or expanding one, sufficient ready capital is essential. But it is not enough to simply have sufficient financing; knowledge and planning are required to manage it well. These qualities ensure that entrepreneurs avoid common mistakes like securing the wrong type of financing, miscalculating the amount required, or underestimating the cost of borrowing money. (Financing Basics, my emphasis)

The Project
Today's project will ask you to budget out the projects you did for the last four MIYB days. By the end of the day today, you will need to hand in an Excel Spreadsheet that shows the total estimated startup costs for your business and explain any changes to the business plan you make based on budget considerations.

Here are some resources to help you get started and focused:

______Budget Resources_________
Startup Costs Calculator (This is a good place to get ideas for your spreadsheet)
Contractor Listings (They can give you quotes to help estimate your remodeling costs)


_______Floor Layout________

(To print out the floor layout so that it shows correctly, click on the picture, go to File > Page Setup in the new window that opens up, delete the values for Header and Footer, set all margins to zero, click OK, and then print the picture by clicking File > Print > Print.)

Saving Options

To your surprise, you find out that you’ve won the lotto. Then, to your horror, you are told that you won’t be walking off with a Publishers Clearinghouse-sized check for $25,000,000. The lotto that you won is a special kind of lottery; you can only receive your money in one of two ways.

Your first choice is to collect $100 a day for the next 30 days. After 30 days, all payment of winnings stops.

Your second choice also allows you to collect prize money for only 30 days. On the first day, you will collect one cent ($0.01). On the second day, you’ll collect twice what you collected on the first (i.e., $0.02). On the third day, you’ll collect twice what you collected on the second, etc.

Which option would you opt for, and why?

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Answerspace: