Startup Operating Capital

[Kevin James]

I just saw on one of the other sections that a new operator doesn’t have much operating capital and it got me to thinking. How much startup operating capital should a newby have on hand at the time they sign the papers for their new venture. Just curious as to what you guy’s think. An existing Car Wash.

 

[pitzerwm]

I would say 2.7x what you think you need)

 

[buda]

What is your monthly "nut?" What do you have to make to pay the bills, maybe including your own salary?

You will wash some cars but it takes up to 3 to 4 years for a carwash to reach it's potential. Not make money, but reach it's top potential.

That said, I would have at least 2 or 3 months capital in the bank to pay your monthly nut, should you not make a dime.

Then you are not struggling. When you start out struggling in a business it never seems to end.

Operate with enough money to fell comfortable and not be in fear.

Bud Abraham

 

[Waxman]

I would start out with 2 months expenses and include your pay as Bud said. That's not the way I did it and it is stressful feeling cash-poor until business generates sufficuent cash flow on its own.

Managing the place is hard enough, so with a more sufficient cash reserve you can focus on the fun stuff, like marketing and operational standards and practices.

 

[robert roman]

If you want a qualified answer, you have to give specifics.

You mentioned “an existing carwash.” Is this carwash on-going or closed?

Operating capital requirements vary by type of wash. What type of wash is it?