Sam is planning to start a pool cleaning business from his home. He has developed the following cost analysis for the set-up and operation for the first year of his business. He has $9,000 in savings and $23,000 in credit that he can use for the business. Approximately what percent of the initial set-up and operation costs will Sam need to finance with a lender or investor?ItemCostTruck$9,000Pool Cleaning Supplies$6,000Payroll$23,000Advertising$1,500
The total start-up and first-year costs are $9,000 + $6,000 + $23,000 + $1,500 = $39,500. Sam can cover $9,000 in savings plus $23,000 in credit, or $32,000, so he must finance the remaining $7,500. Since $7,500 ÷ $39,500 is about 19%, the answer is 19%.
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