Entrepreneurship Final Assignment

For the Start-Up Funds slide, incorporate the feedback you received from the assignment, Obtaining Start-Up Funds, to identify your funding sources, why you chose them, and the sources you decided not to pursue and why. Please Review teacher feedback before completing this assignment.

Teacher Feedback : I appreciate the efforts you put on writing this assignment.  I enjoyed reading your paper on "startup funds" for your beauty business.

Ernest Hemingway once said, "There is no rule on how to write. Sometimes it comes easily and perfectly: sometimes it's like drilling rock and then blasting it out with charges."

Here are the feedback:

a) The Cover Page is On Point!

b) I like the introduction. However, I could not determine the type of funds you are trying to have after reading.  Thus, it is imperative and necessary to include brief details of your chosen funds, so readers can make the connections with the funds and your business concept. In addition, you need to personalize this part as your business instead of being general and talking about other businesses.

c) Overall, I appreciate your efforts on addressing the components of this assignment and how you would go about to fund your business.

Now, think about an exit strategy. This is when you decide that your business may need to close for various reasons like the pandemic that we have had. After thinking, think will you will do in case your business comes to and end. You can liquidate your business or transfer to a family member. In addition,start putting together an executive summary for your business plan based on all of the assignments that you have written thus far. Then put together a PowerPoint Presentation for the Final Business Plan that includes an executive summary, business models, target markets, startup funds, and exit strategy. This assignment is due in Week 10.

SOURCES OF FUNDS

Start-up Funds

Finance is one of the challenges that affect most start-ups. The organization will require to source funds from different channels. The business is set up as a corporation, implying that it will have shares. The management can raise funds through sales of preference shares to the market. They can also obtain debentures from financial institutions. The organization will distribute funds to various channels in the organization. The primary purpose of the funds is to ensure that there is enough working capital in the institution (Borghi et al., 2018). The beauty industry requires different kinds of cosmetics that will be purchased. A portion of the funds will be used in the management of the resources to ensure optimal utilization.

Strategy for Obtaining Funds

There are various ways that the organization can use to source funds. They can issue a prospectus to request members of the public to buy shares in the organization. Shareholders can be obliged to increase their shareholder value. The organization will also use all of the retained earnings to expand its operations. In rare circumstances will the organization use acquire loans from financial institutions after paying preference dividends. Ordinary shareholders will get their dividends after the organization increases its operations and is out of the growth phase (Borghi et al., 2018). The organization may also acquire debentures to be paid on a long-term basis. The organization has to ensure it has obtained the necessary funds to increase operations.

Rejected Sources of Funding

The sources of funds that the organization will not obtain are short-term loans and ordinary shares. Short-term loans have huge interest rates that will use up the organization’s expenses (Cuervo-Cazurra, Nieto & Rodríguez, 2018). In the long run, the value of the money returned to the financial institutions will be way more than what was borrowed. Ordinary shareholders are like the owners of the organization; they control the organization’s operations. If the organization sells its common shares, it will dilute its control.

Running Head: SOURCES OF FUNDS 1

SOURCES OF FUNDS 4

References

Borghi, J., Munthali, S., Million, L. B., & Martinez-Alvarez, M. (2018). Health financing at district level in Malawi: an analysis of the distribution of funds at two points in time. Health policy and planning, 33(1), 59-69.

Cuervo-Cazurra, A., Nieto, M. J., & Rodríguez, A. (2018). The impact of R&D sources on new product development: Sources of funds and the diversity versus control of knowledge debate. Long Range Planning, 51(5), 649-665.