In other cases friends and family members either invest the necessary cash or make a loan to the entrepreneur.
Regardless of the source, seed capital is essential to starting the business.
This initial amount of capital generally comes from personal assets of the owner(s), family members, or friends.
It may be the case that the owners use person debt, such as credit cards, home loans, etc., to fund the startup.
You should conduct secondary and primary research to determine the costs associated with startup.
Secondary research would be to read material from secondary sources on cost of assets or services.Likewise, lenders will take the resources of these individuals into consideration when making the determination of whether to extend credit.Unless the company has considerable assets to post as collateral, lenders will require founders/owners to sign personal guarantees for the debts of the business.Many entrepreneurs depend too much on their own time and efforts to carry out business functions.While this may be necessary, it pulls the entrepreneur from his/her primary tasks – planning and organizing resources to develop the business.Disclose the personal net worth, assets, obligations, outside investments, and sources of income of each individual.This information can be rather personal, but it serves multiple purposes.It depends upon the intended use of the business plan.The financials portion of the business plan may be surprisingly unique depending on the business.Every business begins with a combination of effort and assets.The initial funds to obtain the assets or services necessary to start a business are known as seed funds.