Why am i in business to provide for my family to give

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Unformatted text preview: YOUR BUSINESS? Why am I in business? To provide for my family To give me a job To be my own boss PROPRIETORIAL BUSINESS To expand rapidly To realise wealth ENTREPRENEURIAL BUSINESS Venture capital is not available but see section on "Sources of See "What finance for the entrepreneurial business?" Businesses evolve. Your objectives may have changed when your business reaches the next stage of development and needs more finance. Satisfied with existing New markets PROPRIETORIAL Expansion in existing markets Further expansion or acquisition ENTREPRENEURIAL The business is large enough MATURE BUSINESS Businesses have a life cycle and are likely to require venture capital when, or just before they move from one stage to the next: Developmen Consolidatio Start up Expansion Maturity t n The Right Financing Package This section will guide you to the source of finance most appropriate to your business. A flowchart is included at the back of this publication as a helpful summary of the points made. However, it is important that you understand the implications of the questions before you use the flowchart. Therefore each question is explained below. These explanations are followed by a brief discussion of the various types of venture capital. Definitions of the other sources of finance shown on the flowchart are given in the glossary. Bear in mind that, although the flowchart guides you to one form of finance, a package consisting of more than one type of finance is normally suitable - devising the unique package that suits your business is an art and not a science. It is best developed with the guidance of a professional adviser. The flowchart will show you what form of finance should be the major element in your business' financing package. Can You Find Personal Funds? Before considering raising external funds consider whether you, your family, or friends could finance the business. But beware: do not risk what you cannot afford to lose and do not ask your family to do so. A professional investor or financial institution may be willing to accept a higher level of risk in return for potential gain than you, as a private individual, can accept. 6 Sources of Venture Capital under £250,000 Can You Improve Working Capital Management To Avoid The Need To Raise External Finance? You may be able to improve the way you run your business so that the need for finance is reduced. For instance you may be able to collect money from your debtors more quickly and agree longer, but fair, payment terms with your suppliers. Remember that exceeding agreed periods for trade discount can harm your relationships with your suppliers and that taking advantage of early settlement discount often equates to a high rate of return. Are Grants Available For This Project? If grants are available for your business you should consider them before any other form of finance. They are a cheap way to finance your business. However, bear in mind that there may be some non-financial costs associated with grant fi...
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This note was uploaded on 02/27/2013 for the course GBMT 300 taught by Professor Javierwujie during the Summer '12 term at University of Wisconsin.

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