Your initial capital investment can be broken down into two buckets: 1) One time fixed investments such as furniture, fixtures, equipment and 2) Continued Operating Expenses that you must cover for several months before you reach breakeven. These expenses are often recurring; i.e. you must pay them each month - lease payments, rent, utilities, contract labor, Facebook ads, etc. Remember that the one-time investments are not charged fully as an expense, but are "depreciated" over the useful life of the asset. The operating expenses are expensed right away as you pay them. This is why you divide the startup investment into two buckets. Part of it hits the Balance Sheet as Assets and the other part hits the Income Statement as Expenses.