Get premium membership and access questions with answers, video lessons as well as revision papers.
. Sources of internal capital
- Personal savings
This refers to the owner must have worked and saved income overtime in order to accumulate • enough to start a business.
- Sale of personal assets
This may mean selling part of the owner?s idle or under-utilized assets. The same assets may also be converted for use in business. They may not be money but are representation of money therefore the owner?s contribution.
- Family/relatives and friends
This is a popular source of equity financing. Friends and family in most cases are not worried about quick profits as professional investors are. However, one should be careful when using money from friend?s family because some may want to get involved in running the business.
It may also create conflict and disharmony in families.
-Operating Income
A better source of capital for a company than debt or equity is a positive operating income from quarter to quarter. This is because the company is generating that positive operating income from its own successful business operations. Operating income is also known as earnings before interest and taxes or EBIT. Operating income or EBIT is used to determine how successful the firm's business, actually is.
Positively operating income will generate cash reserves for the firm and eliminate the need for equity financing which is the best of all scenarios for a business firm.
marto answered the question on February 4, 2019 at 07:34
- Discuss five factors that an entrepreneur should put in consideration before deciding on the form of business ownership.(Solved)
Discuss five factors that an entrepreneur should put in consideration before deciding on the form of business ownership.
Date posted: February 4, 2019. Answers (1)
- Explain four internal and four external factors which motivate individuals to develop entrepreneurial behavior.(Solved)
Explain four internal and four external factors which motivate individuals to develop entrepreneurial behavior.
Date posted: February 4, 2019. Answers (1)
- Describe features of the five stages of the business life cycle.(Solved)
Describe features of the five stages of the business life cycle.
Date posted: February 4, 2019. Answers (1)
- Highlight seven market entry strategies available to an entrepreneur at the start-up stage of the business cycle.(Solved)
Highlight seven market entry strategies available to an entrepreneur at the start-up stage of the business cycle.
Date posted: February 4, 2019. Answers (1)
- Outline seven measures that an entrepreneur could put in place to minimize bad debts arising from dishonored cheques issued by debtors.(Solved)
Outline seven measures that an entrepreneur could put in place to minimize bad debts arising from dishonored cheques issued by debtors.
Date posted: February 4, 2019. Answers (1)
- In the context of business expansion, describe the factors that an entrepreneur should consider before making a business acquisition.(Solved)
In the context of business expansion, describe the factors that an entrepreneur should consider before making a business acquisition.
Date posted: January 30, 2019. Answers (1)
- Analyze the limitations associated with a franchise arrangement (Solved)
Analyze the limitations associated with a franchise arrangement
Date posted: January 30, 2019. Answers (1)
- Outline four reasons why it is important for an entrepreneur to have good organization structure in the enterprise. (Solved)
Outline four reasons why it is important for an entrepreneur to have good organization structure in the enterprise.
Date posted: January 30, 2019. Answers (1)
- In the recent past, the prices of basic commodities have been on an upward trend party due to the global recession and social unrest in...(Solved)
In the recent past, the prices of basic commodities have been on an upward trend party due to the global recession and social unrest in some oil producing Middle East countries. In relation to the above statement, identify four negative effects of the uncontrollable upward trend in prices of go and services on entrepreneurship.
Date posted: January 30, 2019. Answers (1)
- Suggest five strategies which should which could be adopted by a local enterprise to become a multinational company. (Solved)
Suggest five strategies which should which could be adopted by a local enterprise to become a multinational company .
Date posted: January 30, 2019. Answers (1)
- Highlight six measures that should be put in place in order to make on-line business networking more beneficial to an enterprise.(Solved)
Highlight six measures that should be put in place in order to make on-line business networking more beneficial to an enterprise.
Date posted: January 30, 2019. Answers (1)
- Outline four limitations of the use of social media network in an enterprise .(Solved)
Outline four limitations of the use of social media network in an enterprise.
Date posted: January 30, 2019. Answers (1)
- Explain six features of a good financial plan.(Solved)
Explain six features of a good financial plan.
Date posted: January 30, 2019. Answers (1)
- Outline four reasons why government levy custom duty.(Solved)
Outline four reasons why government levy custom duty.
Date posted: January 30, 2019. Answers (1)
- Examine five stages that are involved in the pre-start-up phase of a new business venture.(Solved)
Examine five stages that are involved in the pre-start-up phase of a new business venture.
Date posted: January 30, 2019. Answers (1)
- Distinguish between the following set of terms:
a) Brainstorming and business incubation
b) Drone entrepreneurs and imitative entrepreneurs
c) Innovation and invention
d) Bank loan...(Solved)
Distinguish between the following set of terms:
a) Brainstorming and business incubation
b) Drone entrepreneurs and imitative entrepreneurs
c) Innovation and invention
d) Bank loan and bank overdraft
e) Micro finance and youth fund
Date posted: January 30, 2019. Answers (1)
- Briefly explain five characteristics of a good business opportunity.(Solved)
Briefly explain five characteristics of a good business opportunity.
Date posted: January 30, 2019. Answers (1)
- Highlight four factors that a business incubator should take into account when deciding which business to incubate.(Solved)
Highlight four factors that a business incubator should take into account when deciding which business to incubate.
Date posted: January 30, 2019. Answers (1)
- Explain seven types of business incubators that promote the efficiency of entrepreneurship.(Solved)
Explain seven types of business incubators that promote the efficiency of entrepreneurship.
Date posted: January 30, 2019. Answers (1)
- Define the term “Business incubators.(Solved)
Define the term “Business incubators.
Date posted: January 30, 2019. Answers (1)