MAY SEMESTER 2013ASSIGNMENT
BMSB5103 – SMALL BUSINESS MANAGEMENT
CGS0045480223rd July 2013
One business expert acknowledges that “Different stages of a small business cycle of development may not necessarily require the identical sources of financing. As such different sources of financing are observed right from the initial business idea creation, to start up, expansion and to the maturity and sustainable stages”. 1. Critically discuss the above statement in relation to various sources of financing for different stages of business cycle from what it can be presented from the literature. [30 marks]
Different stages of small business cycle of development may not necessarily require the identical source of financing. As such, different sources of financing are observed right from the initial business idea creation, to start-up, expansion and to the maturity and sustainable stages. Starting a business or setting up you up as self-employed is a brave step. To success you’ll need to have plans and yet putting one together can be daunting. It is often the case that people who have a fantastic idea or a dream they wish to fulfil are so scared of failure that they do not even try to make it become reality. Starting a business is one of those dreams which for many people never come true. As an entrepreneur, starting up can be an exciting experience. This means being honest about a range of issue- your knowledge, your financial status and the personal qualities that can bring to your new business.
There are a few steps that are needed to be taken into consideration. * The first step is to make sure it’s really the right thing to do. This is where the business idea is created.
* Secondly is having what it takes.
It is a process to ensure you the right skills and qualities needed to make a success of the business.
* Step 3 is about market research.
In order for your business to succeed, it must be viable financially and there must be a market for whatever the business will be selling.
* Finally is about funding the fund.
Do you have savings that can be invested and if this won’t be enough, how much money is needed to borrow as a way of financing the venture?
In this assignment, I will be discussing the various sources of financing for different stages of business cycle starts from the initial business idea creation, to start up, expansion and the maturity and sustainable stages.
Chart 1: Business Cycle
Stage 1: Initial Business idea creation.
Deciding to start a business can be one of the most exhilarating decisions you can make in your life. One of the elements to be considered during this period is creation of a business idea. All business starts from a common point – an idea. You may have dreamed of starting your own business for years, or inspiration may have hit you unexpectedly. All you need to start with is to do your research. It’s time to balance it between dreams and little reality. This is to gauge your readiness to see what you need to prepare yourself for the business. The source for idea generation can be into two categories. One of it is the Formal way if sourcing idea generation. It it’s by inquiring through the: * Banks
* Government agencies
* Business Consultants
Where else the Informal way of idea generation is thorough:
During this period of time you will be needed to invest your time and little money in order for your travelling, meeting friends, buying books and paying internet bills.
Stage 2: Business start-up
If we dive deeper in the phase of business start-up phase, there a few components that we need to obliged. It involves planning, making key financial decisions and completing the legal activities.
There are 10 major steps to accomplish as...
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