1.1 Identify what sources of finance are available for a new business. 1.2 Asses the implications of different sources by considering the following 3 implication:
a) tax effects.
b) ownership and control of different sources.
c) Evaluate appropriate sources of finance for a business project
* The purchase of plant & machinery, office equipment etc. * Renting or buying premises and offices (e.g. the first 3 months’ rent may need to be paid in advance) * Essential business services such as insurance
* The purchase of stocks of raw materials and components to allow production to start * The wages and salaries of the first employees to join the business (who may be needed before any goods or services are actually sold) * To provide financial cover whilst the business waits for customers to pay. * Renting or buying premises and offices (e.g. the first 3 months’ rent may need to be paid in advance)
1.2 a)Effective business tax planning relies on understanding what taxes apply — and how to minimize them. You need to look not only at business taxes, but the effect on your overall tax position. b)As the business grows, the role of the business owner will change and adjustment to the functions, structure and roles of the company’s personnel will need to be made. Sometimes this is not easy for the business owner to do. The original tasks or duties that he/she carried out, and may have felt comfortable doing, may need to be taken on by others. Or, the business owner may not have the opportunity to use his/her original skill or competence that made the business grow in the first place as he/she takes on other responsibilities including paperwork and administration. This can often be a source of frustration. At the same time, the business owner must learn how to give up control and let others take over certain responsibilities in the business. The business...
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