Clayton wants to start a business in the high technology sector, meaning that his business will rely heavily on advanced scientific and engineering knowledge. To start a business of this type, Clayton will need

a large warehouse.

capital to pay the high initial startup costs.

a lot of employees.

to provide management and merchandising assistance to his clients.

a storefront to sell his product.

Business that relied on advanced scientific and engineering knowledge tend to burn a lot of capital before it can eventually create profit for the shareholder.

First of all, they have to spend a lot of money in research and development. This happen because this type of aimed to create new inventions that never exist before, This could only be achieved with years of research and sustaining constant years of experiment failures. Before they eventually find the correct design or formula for their product.

Second, they have to spend a lot of money to educate their consumers. New type product tend will not directly received by customers with open arm. The company need to spend a lot of money on advertising that provide the customers with information regarding its function or benefit.

All of this tend to lead to high initial startup cost which require a lot of capital.