Unit 2: Finance in the Hospitality Industry
Unit 2: Finance in the Hospitality Industry
Task 1
1.1
As an employee of Alpha Beta services my aim is to help small business owners or people think of starting a business within the hospitality industry by informing them of the funding available for these businesses and income generation for businesses and service industries. With small businesses or people thinking of starting a business is probably always the biggest problem. Below is a list of some of the most popular funding and start-ups available: * Loans: Loans are one of the most popular sources of funding. There are two types of loans secured and unsecured. The difference between the two is that with a secured loan the borrower initiates some assets and an unsecured loan is a loan that is not initiated by any assets. Assets also known as goods can be anything from business equipment, inventory or a receivable. The first is the time over which it takes to pay the loan off (the term) and the interest rate. According to Pakroo (2010) a majority of business loans are short term from between one to three years. In addition, Pakroo (2010) also stated Banks are the most popular place where business and service industries get their loans from. * Investors: There are people who contribute in financing your business, they are called investors. Investors usually take a significant amount of equity or ownership (a certain percentage) in the business, but the investment that they make in financing your business does not have to be paid back to them. There are two main types of investors; private and angel investors. According to Cobb (2012), an angel investor’s capital in a new business is considered to be a high risk investment since the new company has not yet recognised a solid track record of success. * Sponsorship: A sponsor can be an individual or a group that provides financial support. For example, O2 spends £6m a year sponsoring the former millennium dome which is now as the O2
Task 1
1.1
As an employee of Alpha Beta services my aim is to help small business owners or people think of starting a business within the hospitality industry by informing them of the funding available for these businesses and income generation for businesses and service industries. With small businesses or people thinking of starting a business is probably always the biggest problem. Below is a list of some of the most popular funding and start-ups available: * Loans: Loans are one of the most popular sources of funding. There are two types of loans secured and unsecured. The difference between the two is that with a secured loan the borrower initiates some assets and an unsecured loan is a loan that is not initiated by any assets. Assets also known as goods can be anything from business equipment, inventory or a receivable. The first is the time over which it takes to pay the loan off (the term) and the interest rate. According to Pakroo (2010) a majority of business loans are short term from between one to three years. In addition, Pakroo (2010) also stated Banks are the most popular place where business and service industries get their loans from. * Investors: There are people who contribute in financing your business, they are called investors. Investors usually take a significant amount of equity or ownership (a certain percentage) in the business, but the investment that they make in financing your business does not have to be paid back to them. There are two main types of investors; private and angel investors. According to Cobb (2012), an angel investor’s capital in a new business is considered to be a high risk investment since the new company has not yet recognised a solid track record of success. * Sponsorship: A sponsor can be an individual or a group that provides financial support. For example, O2 spends £6m a year sponsoring the former millennium dome which is now as the O2