Sole Trader Companies

Topics: Finance, Debt, Loan Pages: 3 (1090 words) Published: January 18, 2013
In case Pizza hut like a sole trader company
Sole trader companies are the ones which are opened individually. For example, there is one person and he fascinated about doing business so he can invest money into the business and he has to do it by himself. It means he has to find out where can sources of finance come and how to control it because he must work by himself without shareholders. There are some sources of finances as follows: * Retained earnings: this is profits of a company after removing taxes, salaries and expenses or something like that and this source should be applied after few months from the beginning. For example, after removing all of expenses like sundry costs, training courts costs we have the balance in our savings account about 9500 pounds. Pizza hut can use that money actively to purchase for their raw materials it is also an advantage of them when they can control their expenditure and save some money so that they can use their money without thinking about charging fees or interests. However, if they base on the money which is saved too much they are going to meet problems because the situations of company will be different depends on different economics phase so they need to think of some ways to make sure that saving money will not take a lot of place in their account.

* Selling assets: in case the entrepreneur set up their business but they have problems in capitals so they should sell some products to get money to invest and getting profits. For example, pizza hut can sell their old machines, equipment, or even their own logo. This is seemed to be a risk way because after selling assets they will be lose their control in their business a little and it can lead to situations of having not enough assets to support for producing.

* Personal capital: The owners can invest their own money into business for expansion. This will prevent him from the burden of interests from borrowing and he or she can control their...
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