Assignment 4: Final Business Plan

Startup Funds and Working Capital Strategy

Phabian Smith

BUS 313: Introduction to Entrepreneurship

Professor Talil Abrhiem

May 16, 2019

Startup Funds and Working Capital Strategy

In order for any business to start and be competitive there is need to develop an effective business plan that will incorporate diverse aspects of how the business will operate, it’s customers, market, supplier, location, employees , source of capital and products or services among other aspects.

Startup funds are the resources or fund required to start up a new business. This is the cost of renting officers, buying new machines, stationaries, legal cost, first consultation, permit, inventory, product development and manufacturing, marketing or any other expense.

Working capital is the resources that the organization utilize in their day to day activities to sustain the operations (Nguyen, Tran, & Nguyen, 2016). This can be calculated by taking current asset minus current liabilities. The working capital can indicate that the given business has adequate short-term assets. Adequate working capital is vital in ensuring the organization can sustain their short-term objectives.

Method of obtaining funds for my business

There are various strategies or methods of collecting capital in the business and they include;

· Loans from financial institutions family and friends- the organization can get loans or money from friends and financial institutions like bank, Sacco and microfinances.

· Personal saving is another form of getting funds to startup the business. A person can save in Sacco and banks among others (Pesonen, 2017).

· The use of credit card scorecard can help in getting funds. Credit card can get you out of the occasional jam and even extend your accounts payable period to shore up your cash flow.

· Attract an Angel Investor- This are investor who are willing to invest in the given organization.

The budget and proposal are the effective communication procedure where one put the business knowledge in the proposal, the vision, mission and goals.

References

Nguyen, H. C., Tran, M. D., & Nguyen, D. T. (2016). Working Capital Management and Firms¡¯ Profitability: Evidence from Vietnam¡¯ s Stock Exchange. International Journal of Economics and Finance, 8(5), 55-62.

Pesonen, M. (2017). Impacts of public funding on firm performance-A case study on the sources of public business funding.