• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Explain the sources of initial nance, that need to be taken into account when seeking to establish a new business.

Extracts from this document...

Introduction

Transfer-Encoding: chunked I am working for the Hounslow Chamber of Commerce as a trainee manager. My job is to provide a guide explaining the sources of initial finance that need to be taken into account when seeking to establish a new business. It is important for entrepreneurs to identify and understand the difference sources of initial finance. They will need to choose them carefully as some may be risk free but some will have an element of risk; therefore, it?s important to choose sources of finance carefully. The first way the entrepreneur can gain initial finance is from their own personal savings. Savings is when a person keeps back money aside to use at a later date. The entrepreneur will use their own personal savings to start up the business. Money they have saved over a long period of time. A good thing about using personal savings is that it is risk free; this is because it?s your own money, therefore you don?t have to pay it back or with interest. However, if they use all personal savings, and there was an emergency there will not be any more money to use. ...read more.

Middle

It allows the cardholder to pay for goods and services based on the holder's promise to pay for them. A good thing about credit cards is that they provide protection. For instance, if you pay for something yet it doesn?t arrive, you can then gain the money back. However, you have to pay it back and with high amounts of interest. In addition, you can get a mortgage. A mortgage is an arrangement with the bank which allows you to pay monthly installments to buy a property. A mortgage can be paid over a long period of time, around 20-30 years. However, you will have to pay interest. This interest can vary; you can have fixed or variable interest or interest only, or interest and repayment mortgages. Also, if you don?t pay, your property can be repossessed. Another way is leasing. Leasing is when you rent a fixed asset for a certain period of time. Leasing is good because fixed assets can be very expensive, therefore if it breaks down, the leasing company will be responsible to fix or replace it. In addition, if the business fails you don?t have to still pay for it. ...read more.

Conclusion

It is good because it frees up cash and has low rate interest. There are many factors of criteria for investment. Firstly, you will need business plan. A business plan outlines how you will operate the business. If you don?t have one the bank won?t grant a loan, as they don?t know how organised you are or if you have you thought about everything. Next they need project viability. This is when they look at your product and they will see if it will be successful, worth investing in, if it will it be profitable in the long run and it is worth investing in. Moreover, they will need entrepreneur?s personal capital. This is how much of your own money are you prepared to put in your own business. Additionally, there are review procedures; you need to be able to review situations from time to time e.g. Budgets (why you overspent), do you have these procedures in place, for instance a contingency plan in case of an emergency. Lastly, there is financial banking. This who else is prepared to invest into your company. In conclusion, all sources of finance have risks to them. However, many have little risks and could be very beneficial when the entrepreneur is starting up their new business; making pre business start-up, a success. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Case Studies and Analysis section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Case Studies and Analysis essays

  1. How Evans Enterprise party and wedding planners could use IT to help manage their ...

    She decided to start up her own business and become self-employed organising and hosting children's parties, as she had extensive personal and professional experience at being highly organised and capable she was confident she could make this work. Elizabeth began renting the local church hall to host the parties in,

  2. Business plan. The business that I am going to produce is a personalised logo ...

    this a risky option for businesses that need a lot of investment. This is the dance logo for my company PDW' I think that I may have to change a few slight things to make it unique and promising to all customers, this needs to be a stunning attraction to

  1. PEST is a planning tool which is used by a business to evaluate and ...

    as they will have to get rid off all the products affected with the disease. This PEST factor could affect Ginsters because they have a large quantity of employees working at Ginsters; this means that they will have to have a full health and safety evaluation of their business.

  2. I am going to carry out an investigation into S Parton Construction Ltd. I ...

    inactive 23,400 34.8 28.5 26.5 Wanting a job 4,800 7.2 6.2 6.5 Not wanting a job 18,500 27.5 22.3 20.0 From the table you can see that from all the people who are economically inactive in Wolverhampton, 6.3% of them want a job.

  1. Unit 4 P1 explain different types of business information, their sources and purposes

    meals during the Christmas period The sources multimedia information at my chosen organisation- where it originates Tesco PLC multimedia sources originate from Tesco PLC itself, the multimedia content originate from the design and development department as they have to make the advertisement that will grab the attention and inform customers as well.

  2. Describe the advice and nance available for a business considering expansion and growth.

    Once completed they need to be submitted in Companies house in Cardiff, if they are in order they will issue a Certificate of Incorporation. Then the business can issue shares to obtain money; a company?s first offer of shares on the stock market is called flotation.

  1. Methods of exporting to new markets.

    Procedures for Direct Exporting Decide whether you want to sell directly to final foreign buyers yourself or through an import agent or to a foreign distributor located in the target market 1. Prepare literature about your company and products that would be suitable for your exporting activities.

  2. The Cash Flow Problems of Saab.

    Meanwhile, Saab?s revenue may fall due to no more products selling in the market, thus Saab?s cash inflow might decrease. For instance, General Motors took over Saab in the 1990 and there has never been a year where it could manage profits.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work