Business start up with the help of the Prince’s Trust
The choice of finance I would choose would be is prince’s trust and friends, family, and the money I have saved up. The loan from HSBC bank but I would try not to pick up a large amount I would rely on family because I have to pay interest and if I don’t pay the bank back they will take the business off me. If I borrow from friends or family I won’t pay interest but I would agree I fixed amount each month, I would do this because then they would know that I’ll pay them back.
Also the princess trust loan I will have to pay money back put the interest rate wouldn’t be as much as HSBC loan and the princes trust will give me free advice so they’ll make the business better. I wouldn’t really won’t to put all of my own savings into the business because my own money could be used as a back just in case if business isn’t going well and I needed to put a few hundred into rent etc. because if I just used all the money of my own savings and I had to buy new equipment but I already had a loan the bank wouldn’t give me more money because they don’t often give loan’s to Sole Traders.
But I would be expected to use a lot of my money because if I didn’t then over people wouldn’t want to risk their money for me. This is basically to be able to meet financial obligations. A business becomes ‘technically insolvent’ when it has sufficient assets to meet all its financial obligations but insufficient time to convert these assets into cash. It is ‘legally insolvent’ if it is a situation of permanent cash shortage. Managers will want to know the extent of solvency so that they can restructure assets and liabilities into an appropriate form.
For example, they will want to manage their assets in a way that enables them to pay bills as and when they arrive in the organisation, without being too liquid and having too much cash or cash not doing anything. Solvency is a base-line for ongoing business operations. Assets are things which an organisation owns. The word asset normally appears frequently in a balance sheet, which provides a statement of what a business owns and owes at any fixed point in time. Assets are divided into fixed and current assets.
Fixed assets tend to have a life span of more than one year. They comprise items that are purchased and generally kept for a long period of time. Examples of fixed assets are premises, machinery. Current assets are sometimes called ‘circulating assets’ because the form they take is constantly changing. Examples of current assets are stocks, debtors etc The payments that will be made out of the business will be rent, electricity and gas, wages, advertising, insurance, loan and equipment.
It is very important for me to be honest when entering the data in the cash flow forecast because I want the must accurate results that can be achieved because I want a rough idea on how much money I can make or even if I will survive, so I have given the accurate results by asking family and friends. The rent I have to pay each year is i?? 8,820 so I divided it by 12 and got my results. The main usage of business will be water and electricity because I will use a pressure washer, which runs on electricity so I have entered accurate results here.
Insurance on my premises from more than insurance direct i?? 1200 I did this instant quote on the Internet at www. morethanbusiness. com. I need insurance because if the premises are burnt down I can reclaim some of the money and receive money from the personal possessions in the garage. Advertising will be done through flyers and posters I will stand outside the town centre and give out flyers because on the flyers it will have a 10% discount on them I will also post these through housing estates near by the location. In shops poster will be up telling people about the business.
The reason for this is because I have just set up a business I must advertise wisely to get customers if I don’t advertise then I want have no customer = no sales. To advertise in the chronicle which is distributed every Thursdays through the whole of Sandwell to advertise a year it is i?? 150. After year one I wouldn’t advertise as much because I will have the same amount of customers so the main focus will be to keep the current customers. The loan/family section is about given the money back to family or loan I have picked up I would like to hope that my application form was of a good standard because I would like to receive i??
1500 from prince’s trust I have to pay a low amount of interest on this. My family will borrow me i?? 4000 they don’t want interest but we both have agreed that I will pay them back each month as reasonable amount, this helps because then they will trust me when they borrowed me money and by me giving the money back makes them feel confident in the business however I will not consider into going a partnership. Sales have been gathered through market research and it is obvious to me that at summer time I will wash more cars than winter. Equipment I have already said that I will buy my equipment from Stax there pressure washers are i??
150 these are powerful washers in Argos they are selling for i?? 230 so I am saving a lot of money I need 2 of these, sponges for a pack of ten cost i?? 5, car shampoo is i?? 1. 29 and on the bottle it says you can wash up to 300 car washes. As you can see the figures are giving are accurate so therefore my business results (outcome) is likely to be true and that I make a profit, survive etc so therefore I reached my aims and objectives. I could of have made mistakes if I had just entered the figures so I used formulas to make sure that I entered in correct data (look below)