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Financial Plans.

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Introduction

Cost Amount How Often Start Up/Running Cost Equipment �6000 One Off Payment Start Up Premises �110,000 One Off Deposit and Mortgage Start UP * Deposit �10,000 One Off Start Up * Mortgage �4000 Per Year Running Telephone (Line rental only) �100 Per Year Running Promotion * Leaflets �120 One Off Start Up * Newspaper �18 Per Week Running Shop Fittings �3000 One Off Start Up Materials (Food, Bags etc) �1000 Per Week Start Up and Running Electricity �60 Per Quarter Running Heating �50 Per Quarter Running Rates Wage �200 Per Week Running Worker Wages �311.60 Per Week Running Shop Sign �150 One Off Start Up Posters Signs etc �25 One Off Start Up Financial Plans Start Up Costs The total amount of money capital that must be raised before the company can operate is �18,845. Possible Sources of Capital Advantages Source Disadvantages Large amounts of money may be borrowed if banks thinks loanee will meet repayment schedule. Loan can be repaid in instalments. Bank Loan Only normally offers a short to medium term source of finance. ...read more.

Middle

Selling shares involves a lengthy legal process, which is costly. Shares cannot be advertised for general purchase. Financial information has to be declared to the pub if requested. More money can be raised than if there is one owner. Relatively easy to set up. Workload can be split between partners. Partnership Finding a partner may be difficult and take time. A Deed of Partnership must be created which can take some time to complete. Possible for large sums of money to be received. May not have to pay the money back in a large sum. Small Risk. Investment Investors are difficult to find in small business. Small firms investors are usually a friend or family of the owner and if problems occur relationships between them may suffer. Large responsibility. The method of finance that the business will use to cover set up costs will be a Bank loan. The loan will have to be as long as possible to ensure that enough money is earned to cover the repayments and interest. The reason this source has been chosen is because it allows large amounts of money to be borrowed if the bank is happy with the business plans put forward. ...read more.

Conclusion

The problem with leasing is that over a long period of time it becomes more expensive than buying goods and as the plan of the business are long term this is not suitable. Investment this would an ideal way of raising money however finding people to invest in small or large businesses is very difficult. For small firm investors are usually family or close friends. When investing other people's money there is a huge responsibility. Selling shares is another way for people to invest rather than just giving the business money. Selling shares as a small firm can only be done privately and there is a lengthy and expensive legal process to take before shares can be sold. When shares are sold a share of the profits must go to the shareholders making the overall profit for the business much smaller. Going into partnership is a way of doubling the start up funds available to the original proprietor. However problems that occur with this option are that it can be hard to find someone to go into partnership with and control is split between the owners. Arguments and disagreements about the business may effect is success. ...read more.

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