Break-Even Analysis (3)

While some businesses have difficulty raising start-up capital, paradoxically one of the main reasons small businesses fail in the early stages is that too much start-up capital is used to buy fixed assets. While some equipment is clearly essential at the start, other purchases could be postponed. This may mean that desirable and labor-saving devices have to be borrowed or rented for a specific period. This is obviously not as nice as having them on hand all the time, but if, for example, photocopiers, electronic typewriters, word processors, computers, and even delivery vans are purchased by the business, they become part of the fixed costs.