Which term refers to the money spent when establishing a new business?

The term that refers to the money spent when establishing a new business is the initial investment. This concept encompasses all the upfront costs involved in starting a business, including expenses such as equipment, property, legal fees, initial inventory, and any other costs incurred before the business begins its operations.

Understanding initial investment is crucial for entrepreneurs as it sets the financial foundation for their venture and influences their future financial planning and cash flow management. Initial investments are typically significant and can vary greatly depending on the type and scale of the business being launched, highlighting the importance of thorough financial planning and forecasting in the startup phase.

Although capital cost generally relates to the expenses incurred to acquire long-term assets, it is a broader term that does not exclusively pertain to startup expenditures. Total expenditure encompasses all costs over a given period rather than just the initial phase. Operational costs are ongoing expenses necessary for running the business after it has been established. Therefore, while these concepts are related to business finances, the most specific term that captures the money spent when establishing a new business is indeed initial investment.