Use with Business Accounting and Finance Second Edition by Catherine Gowthorpe ISBN © 2005 Thomson Learning

Use with Business Accounting and Finance Second Edition by Catherine Gowthorpe ISBN © 2005 Thomson Learning Money is required for: Purchase of equipment Supporting owner & family Paying for premises Paying for staff Expenses

Use with Business Accounting and Finance Second Edition by Catherine Gowthorpe ISBN © 2005 Thomson Learning Existing cash resources, e.g. –Savings –Windfalls –Proceeds of part-time work

Use with Business Accounting and Finance Second Edition by Catherine Gowthorpe ISBN © 2005 Thomson Learning Family or friends –Loan or gift of cash –Loan or gift of equipment –Support from partner/spouse

Use with Business Accounting and Finance Second Edition by Catherine Gowthorpe ISBN © 2005 Thomson Learning Grant finance –Repayment not usually required –Not often available –If available, to be used for specific purposes

Use with Business Accounting and Finance Second Edition by Catherine Gowthorpe ISBN © 2005 Thomson Learning Commercial borrowings –Expensive - commercial rates of interest –Difficult to obtain for new start-ups –Security: charges or guarantees

Use with Business Accounting and Finance Second Edition by Catherine Gowthorpe ISBN © 2005 Thomson Learning Description of business content Detailed description of product or service Market research, analysis of competition Profile of entrepreneur

Use with Business Accounting and Finance Second Edition by Catherine Gowthorpe ISBN © 2005 Thomson Learning Initial investment required Other people (NB costs of employment) Insurance and legal issues Professional advisers Detailed financial projections –Budget: projected profit and cash flow

Use with Business Accounting and Finance Second Edition by Catherine Gowthorpe ISBN © 2005 Thomson Learning Poor management Lack of working capital Lack of long-term finance Bad debts Loss of market