1. CAPEX Budget
By Peter Baskerville
28/07/2019

2. Three key budgets for startups
Profit
Worthwhile + breakeven
CAPEX
Cost to build infrastructure
Cashflow
Manage launch to breakeven
Profit – Will it all be worthwhile? Is the breakeven achievable?
CAPEX – What will it cost to build the initial phase?
Cashflow – Can I pay my bills each week between launch and breakeven?

3. Capital Expenditure = CAPEX
“$ needed to get the plane off the ground” - Can be – tangible (physical) or intangible (non-physical)
Tangible – vehicles, equipment, computers, shop fittings, leasehold improvements, initial stock.

4. Don’t forget intangible CAPEX
Statutory – architect, council fees, professional advice, business formation costs.
Prepayments – insurance, rent in advance.
Establishment – staff (training, set-up time)
Deposits – rent (1-6 months) – utilities.

5. CAPEX & Business Model Your business model determines your CAPEX.
Undercapitalization is one of the greatest reasons for business failure.
Design must match resources – Paper, balsa, radio-control, ultra-light, Cessna, Jumbo.
Change the model to change your CAPEX.

6. Changing your business model
Value proposition – goods Vs service
Customer relationship – personal assistance Vs self-service
Channel – Physical Vs digital
Activities – Production Vs Problem solve
Partners – Wholesale Vs Retail

7. CAPEX - Equipment Computer Equipment Machinery Vehicles
Furniture & fittings
Leasehold improvements
Installation of equipment

8. CAPEX – Location/Administration
Lease deposits
Rent in advance
Licenses & Permits
Deposit (electricity, gas, water)
Business structure costs
Legal fees - agreements
Accounting fees - advice
Prepaid Insurance
Pre-opening staff training & wages

9. CAPEX - Intellectual property
Online domain names
Business Name registration
Logo design
Trademark fees
Patent Fees
Patent attorney costs

10. CAPEX – Research & Development
Courses - mentor
Market Research
Customer development
Prototype development
Materials & publications
Business planning

11. CAPEX - Opening stock Merchandise Packaging supplies Office supplies
Cleaning supplies

12. CAPEX - Marketing Opening advertising Printing & Stationary
Web Development
Signage
Pre-opening travel expenses
Pre-opening entertainment expense

13. CAPEX – Contingency

14. For the period leading to launch
CAPEX budget
Startup Pty Ltd
CAPEX budget
For the period leading to launch
Item
Total Amount
Mth1
Mth 2
Mth 3
Check sum
Tangible
Equipment
10,000 -
Fixtures and fittings
20,000
Construction
15,000
7,500
5,000
2,500
Total tangible
45,000
22,500
Intangble
Statutory
Prepayments
6,000
1,000
Deposits
Establishment
Total intangible
28,500
3,500
73,500
30,000
17,500
26,000
Assumptions:
Detail here the assumptions that you have made in preparing the figures.
List the capital expenditure items required to launch your business.
Estimate the total expenditure required (with assumptions)
Allocate the amounts over a monthly time frame (no specific date)
Check sum – validate maths