Capital requirements are the total amount of money you need to start your business and run it until it covers its own costs. The figure combines one-time startup spending, equipment, and the operating losses you expect in the first months. It answers one question: how much money must you raise before you begin?
Banks, grant programmes, and investors ask for this number early. A generated business plan reports it as a single figure in the financial section, built from the cost inputs you provided.
Add three blocks. One: one-time costs such as registration fees, equipment, deposits, and the first website. Two: running costs until break-even, meaning rent, salaries, software, and marketing. Three: a buffer for delays.
An example for a small café. One-time costs are €45,000 for the fit-out, €12,000 for equipment, and €3,000 for registration and advisors, so €60,000 in total. Monthly running costs are €9,000, and you expect the café to cover them from month nine. If it loses €4,000 per month on average during those eight months, that is €32,000. Add a 15 percent buffer on €92,000, which is €13,800. Your capital requirement is €105,800.
The common mistake is the missing buffer combined with a runway that is too short. Founders plan for break-even in month four, raise exactly that amount, and run out of cash in month six.
A second mistake is confusing capital requirements with startup costs. Startup costs are only the first block. Capital requirements also include the money you burn while revenue is still small.
Write the number down with its assumptions next to it. When your break-even date moves, the number moves too.
