Industry sector:

Classic car restorer: Capital expenditure


Now that you have given further thought to exactly how your car restoration business will operate, you might like to revisit your estimates of capital costs to make sure that you have identified all of the items you will need and any other capital costs you will incur.

Bear in mind that you are likely to need some costly items of equipment - things like hydraulic vehicle lifts, a spray booth, compressor and other specialist tools. Don't forget to include any expenditure on your premises such as sign writing, or having your logo and livery put on any vehicles. Make sure you have thought about the security measures you will put in place - for example, a burglar alarm, wheel clamps or security fences around any car parking area. If you are paying cash for all the items you are buying for your business, enter the amounts - including VAT - in the months when you expect to pay for them.

If you decide to buy some items on hire purchase, or with a loan, enter the deposit and the monthly payments in the months in which you will pay them. These payments will be made up of both capital and interest. Enter the capital here and the interest under 'Bank/finance charges and interest' in your cash flow. The agreement will identify the amount of interest payable annually - if you deduct this from the total amount you have to pay each year the balance is the capital.