...Choosing a Method of Financing a Business By Derek Dowell, eHow Contributor Banks may want to lend you money if you present a well-prepared business plan. Whether you're starting a new business from scratch or operating a successful business already, securing financing first requires you to think about the best method to go about it. There are many factors to take into account, though some may vary according to an entrepreneur's personal situation. Poor management is the most frequent cause of small-business failure, according to the Small Business Notes website, but it is closely followed by insufficient financing. Other People Are Reading * The Disadvantages of External Equity * Financing Methods for Capital Purchases 1. Funding Availability * The first thing to do when choosing a method of financing your business is to determine what your range of options are. Small Business Notes lists the most common sources of finding money to start a business: personal savings (72 percent), banks (45 percent), friends/relatives (28 percent), individual investors (10 percent), government-guaranteed loans (7 percent) and venture capital firms (1 percent). Most people will not be able to rely on a single source, since banks expect the business owner to put some of his own money at risk in the venture. Spend some time thinking about what sources you can access. Personal Savings * Choosing to risk personal savings on a business venture requires serious thought...
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...Marketing Capability of Small Businesses: The use of Diagnostic Audits to Benchmark an SME’s competencies against critical marketing success factors Contents Introduction-2 The Identification of Critical Success Factors in Marketing-2 Showcasing/Evaluation of key diagnostic audit tools-4 Conclusion-6 References-7 Introduction In this paper I will showcase how supporting the Development of Marketing Capability of Small Businesses and The use of Diagnostic Audits to Benchmark an SME’s competencies against critical marketing. Small businesses struggle with lots of elements of the business world both external and internally exploring the use of business tool kits, the paper will discuss how these will help SME’s and which kind of tool kit is best for certain company’s. Small micro-businesses generally only employee between 0-9 people, which in 2012, there were 4.7 million micro businesses within the UK. This figure constituted towards 96% of all businesses (Parliament.uk, 2013). SME’s will play a key role in helping to stimulate economic growth in the UK and help the recovery from recession. The Identification of Critical Success Factors in Marketing The introduction of a product to a market place with success is a difficult process, given that successes in a sector can be few and far between for small business. Segmentation is a key issue, exploiting gaps within this market, can lead to rapid growth when coupled with a good marketing plan. It is important to...
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...1-finance is essentially any transaction in which money or money like instrument is exchanged for another money or money like instrument. So we can say the concept of finance is very old it, has taken place probably since the roman or the Chinese dynasty era. Finance is used in the market. A market is a place that allows forces of demand and supply to operate. Where sellers and buyers trade services goods, contracts, for money or barter, this is the place where finance also takes place. You can’t have one without the other. There are different types of markets, according to our book in United States there is real estate market, the internet and commodity market. All these market have one thing is common which is finance, they all involve some type of trade, information trade, goods trade and property exchanged for some type of money. 2-Economic capital is the money value, how much monetary asset it has to cover expenses, and other financial needs; it’s what we consider solvency. Financial capital it’s a much broader term, it’s anything related to money and assets to a company, it’s a dollar value claim on economic capital which includes cash, accounts receivables, stocks, and bonds. 3-Oportunity cost is the benefits you could have received by taking an alternative action, for example investing money in a savings account where you get 3% interest or on a another type of investment where you could have received 10% interest. Entrepreneurs face this dilemma every time they make...
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...(McLaney and Atrill: 2010) suggest that finance is concerned with the way in which funds for a business are raised and invested. Any business irrespective of its size and nature requires sources to raise finance. Different types of sources of finance are available to different types of businesses. Broadly the two types of sources of finance are internal and external. Internal sources are from within the business and external sources are outsourced extrinsically. The three main legal statuses of business constitute of being a sole trader or partnerships and Private Limited Company. Sources of finance available to each of these are discussed below. Sole Trader and Partnership: Sole traders and partnerships refer to the simplest forms of business organization. A sole trader is an individual who runs a business from his own name, providing all the capital and assuming all the risks. A partnership can include more than one individual. Sole trader and partnerships have a range of options to get finance. Personal Savings and Loans * Put simply, personal savings is the amount of money a person has at his disposal. It becomes a source of finance when the sole trader or a partnership member is willing to invest it in his business. It is up for the individual to decide whether he wants to keep his savings or use them to buy equipment, vehicles, tools or other things his business's needs. Loans from friends and family also amount to a source of finance. Working Capital * Working...
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...Abstract Andy Rexford started an embroidery shop in his garage. It was a small business he began in his garage and took one or two small jobs that are time that the big businesses were not willing to take in as jobs. His business, Custom Stitches grew into a full-time family business that made over $750,000 a year. His business supplies embroidery work for local colleges and businesses. Not only does he take on big jobs he also is still willing to take the small jobs that other businesses are not willing to take on. In the beginning he began with one two headed machine and now has five, six headed machine that embroider the same designs simultaneously on six items. He now wants to get rid of the old two headed machine that started it all. Rexford attended a workshop on business planning and has spent the last two months developing a business plan for Custom Stitches. While developing his business plan Rexford wants to pass on the opportunity for his business to grow within the next few years. With his new accountants, contacts and plans for the future Rexford truly believe that he can double the size of his business within two years. The only challenge he faces is finding money to finance his growth and will need $700,000 in external capital to meet his goals. Rexford is now sitting at his desk looking at his business plan wondering where he could find that much money to finance his company's growth. In this paper I will suggest well Rexford needs to look for his financial...
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...business.gov.au Business Plan template A good business plan can help you secure finance, define the direction of your business and create strategies to achieve your goals. The business.gov.au Business Plan template steps you through the process of creating a solid, well-structured plan tailored to your business. New! Create your business plan on your iPad by downloading our free MyBizPlan iPad App. Search ‘MyBizPlan’ in the App Store now! Copies of the latest version of this template and the guide can be downloaded from www.business.gov.au/businessplan. If you need further information, assistance or referral about a small business issue, please contact the Small Business Support Line on 1800 777 275. Using this template Before you complete this business plan template and start using it, consider the following: 1. Do your research. You will need to make quite a few decisions about your business including structure, marketing strategies and finances before you can complete the template. By having the right information to hand you also can be more accurate in your forecasts and analysis. 2. Determine who the plan is for. Does it have more than one purpose? Will it be used internally or will third parties be involved? Deciding the purpose of the plan can help you target your answers. If third parties are involved, what are they interested in? Although don’t assume they are just interested in the finance part of your business. They will be looking...
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...Small Business Management American Public University February 6th, 2013 Abstract In this paper I will discuss the role and the importance of small business. There are several arguments for owning a small business and there are plenty of arguments against owning a small business. I will present how to start a small business, how to organize a small business, and how to operate a small business. This paper can be used a Small Business Bible, or a “How to” guide for anyone looking to open a small business. Small Business Owners and Managers face various issues such as social responsibility and ethics, those issues will be discussed in this paper. At the end of this paper you will be able to write a Business Plan and decide if owning or managing a small business is for you. Defining small business is not easy because the definition varies, however a small business is independently owned and operated and is not dominant in its field. There’s not much difference in a entrepreneur and a small business owner. I think everyone thinks about owning their own business at some point in their lives. I’ve thought about owning a hair salon, a beauty supply store, a restaurant, etc. the list goes on…however most recently I thought about owning a night club. Before starting a business the Small Business Administration (www.sba.gov) suggests you ask yourself the following questions: 1. Why am I starting a business? 2. What kind of business do I want? 3. Who is my...
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... Task. 1:1.1 AC identify the sources of finance available to the business. 1. Government grants A grant of monetary help with the type of cash by the government to a qualified grantee with no desire that the trusts will be paid back (staff, 2015) 2. Leasing Is a system that permits people to claim and make utilisation of specific resources for medium to long haul financing periods consequently for beforehand set between time instalments (Ahali.com, 2015) 3. Friends and Relative They may offer advances without security or consent to a more drawn out reimbursement period (Business gateway, 2015) 4. Government program Chosen, state, and neighbourhood governments have programs expected to help the financing of new interests likewise, little associations. The assistance is much of the time in the kind of an organization certification of the repayment of a development from a customary advance master Anon, (2015). [Online] available at: 5. Life insurance Is a way of ensuring your family or your friendship ones in the event that you pass away (you tube, 2012). 6. Personal savings The primary spot business visionaries ought to search for start-up cash is in their own pockets. It is the slightest costly wellspring of stores accessible (13 sources of finance, 2015). 7. Bank loans A development made by a bank to be repaid with eagerness at the exceptionally most recent a modified date...
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...BTEC NATIONAL IN BUSINESS (MANAGEMENT) Unit 37 – Starting a Small Business Assignment 1 – Present your business idea This task assesses P1 Present the initial business idea using relevant criteria Signed (IV) _________________________________ Print Name__________________________________ This unit is all about starting your own small business. The assignments will take you through the planning process in order to complete your own small business plan. This may be a business you are thinking of starting in the future. To complete this assignment you should think of a business idea that you will be able to research and plan for. It should be realistic. You will present your idea to an assessor and some of your class mates. |P1 |Task 1 | | | | | |You should consider whether your business will be new, a franchise or whether you are going to buy an existing | | |business. Your bank manager has asked for your thoughts on this before he/she makes an appointment to discuss your | | |plan. | | | ...
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...Presenting Business Plans Information American InterContinental University Abstract This paper is written on a business plan started up by an entrepreneur. In a business of entrepreneurship you have to have a set business plan along with a great management team to be successful and stay in business. In this paper I will explain the entire business plan and what it takes to be successful. If you’re going to start your own entrepreneurial business you have to have good beneficial methods and a good well-suited business plan. Your plan should include the description of your business, your marketing strategy, and your organizations objectives (Chron, 2012). The new entrepreneurial business will first explore its description. The description of a particular company gathered from a proprietary database via phone books/ phone surveys, ECT. The business description begins with a short description of the industry. When talking about the industry you should discuss the present outlook as well as future possibilities. You should include all the various markets within the industry and make sure you include all new products and developments that will benefit your business. All observations should be based on realistic events, reliable data, and dependable sources of information. If you’re seeking funding all these objectives are very beneficial. This is because investors will want to know how dependable your information is and what is at risk for them. Investors won’t risk...
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...guidelines for small banks and payment banks. Payment banks and small banks are “niche” or “differentiated” banks; with the common objective of furthering financial inclusion. While small banks will provide a whole suite of basic banking products, such as, deposits and supply of credit, but in a limited area of operation, payments banks will provide a limited range of products, such as, acceptance of demand deposits and remittances of funds, but will have a widespread network of access points particularly to remote areas, either through their own branch network or through Business Correspondents (BCs) or through networks provided by others. They will add value by adapting technological solutions to lower costs. GUIDELINES:- • Purpose There is a need for transactions and savings accounts for the underserved in the population. Also remittances have both macro-economic benefits for the region receiving them as well as micro-economic benefits to the recipients. to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users, by enabling high volume-low value transactions in deposits and payments / remittance services in a secured technology-driven environment. The objectives of setting up of small banks and payment banks will be for furthering financial inclusion by (i) provision of savings vehicles to underserved and unserved sections of the population, and (ii) supply of credit to small business units, small farmers, micro...
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...A budget is a quantitative expression of the money inflows and outflows that reveal whether a financial plan will meet the organisational objectives or as a quantitative plan of action relating to a given period of time which may include planned revenues, expenses, assets, liabilities and cashflows. Business budgeting is one of the most powerful financial tools available to any small-business owner. Put simply, maintaining a good short- and long-range financial plan enables you to control your cash flow instead of having it control you. Budgeting is a quantitative expression of a plan or action prepared in advance of the period to which it is related. Budget sets out the costs and revenues that are expected to be incurred or earned in future period. Budgeting is one of the most important skills that you can have. In any economic forecast, planning and budgeting are crucial when it comes to conserving and increasing your resources. The use of a budget can be helpful to not only individuals and families, but companies as well. In order to stay afloat, every company from the small business to the large corporation must keep track of their finances in order to succeed. Often they utilize the services of an accounting professional to keep this information in order. However if you are the owner of a small business or simply trying to deal with your home finances, you may not have the luxury of hiring a professional and need to do the work on your...
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...WP/04/01 Bank of Uganda Working Paper Recognising the Role of Micro Finance Institutions in Uganda Justine Nannyonjo and James Nsubuga _________________________________ Bank of Uganda 2 WP/04/01 BOU Working PAPER Research Department Recognising the Role of Micro Finance Institutions in Uganda By Justine Nannyonjo and James Nsubuga February 2004 Abstract This paper shows that micro finance is an important part of the growth strategy in Uganda and has in the recent years gained increasing recognition. This is evidenced by initiatives and strong commitment by government, donors and practitioners towards supporting micro finance activities in Uganda, and the rapid expansion of the micro finance industry. Integration of Micro Finance Institutions (MFIs) into the formal financial system has been established, while measures have been taken to build capacity and enhance coordination in the micro finance industry, as well as expand the outreach of sustainable micro finance. The paper, however, identifies a number of challenges to the development of the micro finance industry: There is need to strengthen the capacity of MFIs to build their management information systems, and to rebuild infrastructure in underserved areas as well as strengthen capacity for identifying potential market structures, which could serve as the basis on which to build sustainable micro finance services. Other challenges include restoring peace in conflict areas and strengthening...
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...for failure of a business? In my case, intimately. I partnered with my husband Dave for five years as a general contractor in our business Affordable Dream Homes. We became a statistic, one of the fifty-five percent of businesses that fail before their fifth anniversary (Hatten, 2009, p. 17). In the years that have passed since our business failed, I’ve mulled over why and have wrestled with what we could have done differently. Businesses fail for many reasons. Our case was classic. We failed in the long run first and foremost due to poor management. We also lacked capital, expert advice, marketing know-how, and we were pricing our product incorrectly. Off to a Great Start We started the business with great prospects, however. My husband Dave and I had dreamed of opening our own business for over ten years. Both of us craved the independence afforded us of working for ourselves, but between the two of us, we didn’t possess much in the way of small business management experience. I worked as an accounting and administrative clerk. Dave had a degree in construction management. He had managed a Winchell’s donut shop for two and a half years fresh out of college and then worked in residential construction as a construction manager and finish carpenter for five years. We became homebuilders in March of 1992. Our goal was to build beautiful, affordable new homes for clients and we named our company Affordable Dream Homes. We started the business with the tools Dave...
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...School of Business United International University FINANCING OPTIONS FOR SMALL AND MEDIUM ENTERPRISES (SMES): EXPLORING NON-BANK FINANCIAL INSTITUTIONS AS AN ALTERNATIVE MEANS OF FINANCING THE CASE OF BANGLADESH Submitted To Submitted By James Bakul Sarkar Md. Moniruzzaman Assistant Professor ID: 111091381 School of Business Bachelor of Business Administration Bachelor’s Degree Thesis in Business Administration ACRONYMS SMES SMALL AND MEDIUM-SIZED ENTERPRISES NBFI NON BANK FINANCIAL INSTITUTIONS. FFS FORMAL FINANCIAL SYSTEM IFS INFORMAL FINANCIAL SYSTEM FMF FEDERAL MINISTRY OF FINANCE CBN CENTRAL BANK OF NIGERIA NDIC NIGERIAN DEPOSIT INSURANCE CORPORATION SEC SECURITIES AND EXCHANGE COMMISSION NIC NATIONAL INSURANCE COMMISSION FMBN FEDERAL MORTGAGE BANK OF NIGERIA NDIC NIGERIA DEPOSIT INSURANCE CORPORATION SEC SECURITY AND EXCHANGE COMMISSION NAICOM NATIONAL INSURANCE COMMISSION ABSTRACT TITLE: FINANCING OPTIONS FOR SMALL AND MEDIUM-SIZED ENTERPRISES (SMES): EXPLORING NON-BANK FINANCIAL INSTITUTIONS AS AN ALTERNATIVE MEANS OF FINANCING. AUTHOR: Md. Moniruzzaman SUPERVISOR: James Bakul Sarkar DEPARTMENT: School of Business, United International University COURSE: Bachelor’s Thesis...
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