Recently, "Inflation" had affected the prices as a whole in the market because this excessive price increase is what has affected everyone in the society and the nations; on top of that salaries in business industry remained the same. Private sector and government sector has long working hours which led employees to divert to additional work or start their own business to enable them to meet their life requirements and improve their finance at the same time.
Referring back to the case study Jacqui Rosshandler decided to leave her job as an interior designer and start her own business, Jacqui had many reasons that made her take this decision such as the long working hours, orders from managers or directors, as well as limited income. Therefore …show more content…
Firstly, represents to the individual venture of the proprietor (or proprietors) in a business, also, is once in a while capital in light of the fact that these financial specialists accept the essential danger of losing business. Equity capital; ‘‘typically comes from funds invested by shareholders, the cost of equity capital is slightly more complex” The advantage of equity are doesn’t need to repay, sharing risk and liabilities of company ownership with the investor because there will no debt payment you can use cash flow to benefit from future growth and there will be a diversity into other areas, low-debt give better position to get a loan in the future. However, there are disadvantages as well, because, you give up part of your ownership, which will allow others to take decision over your business. You have to create a BOD – board of directors; also you must share a part from your profits with the investors. Furthermore, over time – share profits to other owner may increase what already have to repay on a loan so it will come very complicated and hard to manage business …show more content…
Paying off your debt in installment for period of time and benefit to keep ownership of business under your control not like equity. However, there are disadvantage for this type of financing. You have to repay your loan plus interest, because if you are going to ignore it property will own for the bank. Moreover, avoiding accumulating installments will lead you to pay future interest, after that a lot of debt can be stop growth, because wrong usage of this method will lead for sure to risk your business and over use of that will surly lead the owner to fall in a complex situation. Despite the disadvantages of this method it’s considered better than capital equity because you will have the full control of your business, but at the same time you should manage it very well.
In conclusion, these methods are very important to be understood very well especially by owners of small business. Choosing the right financing method will lead to business success and
Referring back to the case study Jacqui Rosshandler decided to leave her job as an interior designer and start her own business, Jacqui had many reasons that made her take this decision such as the long working hours, orders from managers or directors, as well as limited income. Therefore …show more content…
Firstly, represents to the individual venture of the proprietor (or proprietors) in a business, also, is once in a while capital in light of the fact that these financial specialists accept the essential danger of losing business. Equity capital; ‘‘typically comes from funds invested by shareholders, the cost of equity capital is slightly more complex” The advantage of equity are doesn’t need to repay, sharing risk and liabilities of company ownership with the investor because there will no debt payment you can use cash flow to benefit from future growth and there will be a diversity into other areas, low-debt give better position to get a loan in the future. However, there are disadvantages as well, because, you give up part of your ownership, which will allow others to take decision over your business. You have to create a BOD – board of directors; also you must share a part from your profits with the investors. Furthermore, over time – share profits to other owner may increase what already have to repay on a loan so it will come very complicated and hard to manage business …show more content…
Paying off your debt in installment for period of time and benefit to keep ownership of business under your control not like equity. However, there are disadvantage for this type of financing. You have to repay your loan plus interest, because if you are going to ignore it property will own for the bank. Moreover, avoiding accumulating installments will lead you to pay future interest, after that a lot of debt can be stop growth, because wrong usage of this method will lead for sure to risk your business and over use of that will surly lead the owner to fall in a complex situation. Despite the disadvantages of this method it’s considered better than capital equity because you will have the full control of your business, but at the same time you should manage it very well.
In conclusion, these methods are very important to be understood very well especially by owners of small business. Choosing the right financing method will lead to business success and