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Every business that is starting up needs a comprehensive evaluation that will show the evaluation of the estimates of cash that will be used for starting up a business. The amount will then be used in acquiring the tools and other things that are needed for the business. The financial plan of the automobile repair shop will be broken into different parts which will include the amount that is needed for the startup of the business. The following are the projected startup costs;

· Lift with installation- $3,000

· Insurance cost- $4,000

· Tools- $20,000

· Rent- $1,500 to $13,000

· Miscellaneous and any other costs- $5,000

· Working capital- $20,000

I will need a debt funding for $50,000 since am planning on keeping some reserves for rent payment and other operating expenses on the first month of working. At this time when starting a business, I won’t need any investment from the third party. Therefore, I am planning to own the shop 100% in the beginning. I will require one person to help me but when the business grows and becomes successful I will employ other qualified personnel.

I will finance the business using various ways. I have my personal savings which I will use for buying some few types of equipment and acquiring a place where I will situate my business. The first way is by use of loans or credit. This is a temporary type of cash which I will repay with a lower interest rate. Debt financing will help in financing my current activities such as the operations and other miscellaneous expenses. I can also borrow from friends and relatives in form of debt at a low-interest rate. I will use the same formality as that of credit lenders and other commercial lenders. There are also government programs which help in financing new ventures and small business. The amount given is in form of a government guarantee of the repayment of the amount given by the lender. The lenders are certain that their loan will be repaid after a period of time.

My personal savings acts as a great source of capital since I already have the amount with me, the acquisition cost will be minimal and I won’t have to pay any interest on the bank since it is my own cash. However, I can lose the whole amount of money into the business venture if I invest it all. Debt financing is good because it has retained controlled. Since the lender has no say of how I will use the amount that they have given to me. I will be the one to make all the decisions about the amount. It also has a tax advantage such that the interest for loan repayment is tax deductible (Dlabay, & Burrow, 2008). However, it has a qualification requirement and repayments must be done on time regardless of my current situation. On the other hand borrowing from relatives and friends has some various benefits since they are close to me and they care about me. Therefore, they will help me in developing my vision into something that other people will recognize value. However, I may damage the close relationship if I repay their amount late. They may also fail to appreciate my entrepreneurial drive. Therefore, they may fail to help me with some funding (Dlabay, & Burrow, 2008). 

Government grants and loans are also a good source amount of money since they have low-interest rates as compared with other types of loans from commercials. However, they may not be available for every type of business since it comes with a lot of red tapes. I will use forecasting model since it will help me in financial planning and analysis since this is a start-up business. It will help me in building a forecast that compares to the budget model (Benninga, 2014). Based on the estimates and my financial budget, this model will help me in forecasting what my budget will be like and what I might earn after I start working.

References

Benninga, S. (2014). Financial modeling. Cambridge, Massachusetts: The MIT Press.

Dlabay, L. & Burrow, J. (2008). Business finance. Mason, Ohio: South Western.