Topic 5 - Financing the new business idea and putting it into practice

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Sources of Finance

  • Internal sources of finance 
    • Renting out space / machinery
      • + No interest to pay
      • - might need the space back 
    • Altering the quality of materials 
      • + Less cost
      • - Some customers may not be happy
    • Selling off assets
      • + low risk and can raise a lot of money quickly 
      • - You may need them again
    • Leasing equipment instead of buying
      • + less cost
      • - Could limit production

 

 

 

 

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Cash Flow Problems

  • All the cash flow problems are linked to one another:
    • Recessionary Inflence 
      • Decreased demand
    • Competition
    • Outdated equiment
    • Staffing problems
    • Lack of forward planning
    • Poor credit controle 
    • Growing too quickly 
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