1. Nature of business: The amount of fixed capital requirement basically depends on the nature of the business. Some business requires huge fixed capital and some need little fixed capital depending on their operations. The need for fixed capital will be more as the concern needs to invest on fixed assets like plant, machinery & Buildings etc.

2. Scale of operation: The scale of operation is the other important determinant of fixed capital requirement of a business. Larger the size and the scale of operations, the greater will be the amount of fixed capital requirement.

3. Growth & Expansion prospects: Higher growth of organization generally requires higher investment in fixed assets. As the organization as to create higher capacity’ in order to meet the higher demand.

4. Choice of a technique of production: An organization may be capital intensive or labor-intensive. A capital intensive organization requires a higher investment in plant and machinery when compared to labor-intensive organizations. Thus the requirement of fixed capital for capital intensive organizations would be higher.

5. Method of fixed asset acquisition: Organizations purchasing fixed asset on a cash basis requires a large amount of fixed capital. Those organizations which acquire fixed assets on hire purchase and installment system requires lesser amount of fixed capital.

6. Diversification: Diversification of production or operations is another important factor affecting fixed capital requirements. A concern that chooses to diversify its production requires more fixed capital.

7. Amount of promotion expenses: If a concern has to spend more amounts by way of promotion expenses, cost of raising finance etc then it requires more amount of fixed capital.

8. Level of collaboration: Collaboration refers to the business organizations which share the facilities to each other. It reduces the level of investment in fixed assets for the participating organizations. So the requirement of the fixed capital is less in a collaboration of business.