Why do businesses need money?

Start up costs

Costs that have to be paid when setting up a new business.
Usually these costs are paid out before the business starts to trade

e.g.
buying machinery/equipment
refitting a factory/shop
decorating
advertising

Running costs

The regular costs of producing goods or services

e.g.
rent
phone costs
lighting
insurance premiums
wages
raw materials

Renewal costs

Costs of repairing and replacing equipment and premises

e.g.

electrics
maintenance costs
refitting


Expansion costs

Costs involved in expanding the business

e.g.

New premises/or building costs
Marketing
New machinery
Costs of recruiting new workers
Developing a new product