Essay
Financial Services to Support Business level 3 P3 UNIT 3
- Institution
- PEARSON (PEARSON)
Describe the advice and finance available for a business considering expansion and growth.
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By: shmufc234 • 5 year ago
By: rebecca-distinction • 5 year ago
Thanks for the feedback, feel free to ask any questions thank you
By: sidrit1998 • 6 year ago
Content preview
I will be describing the advice and finance available for a business considering expansion and growth.A business considering expansion and growth is a business that is making profit and sales; profit is the
businesses gain after selling products, the business can use their profit for their expansion and growth as
this will save them time and money from having to look for other sources of finance and paying back
money with interest. If the business has a high amount of profit which they should if they are looking to
expand and growth, they could use this profit for what they want to do such as opening more stores and
creating or introducing new product. Also using profit will make them determine to do well as they
would not want to waste the money and it allows them to do what they want with it and they do not
have a time limit as of when they have to pay it back, however they would need to be making profit in
order for them to continue growing.
The owner of the business could also use their own money which could be from their saving accounts
and if it is not a high amount of money they could use it in addition with another source of finance.
Using their own savings is a wise option because they will not owe anyone money except themselves and
since they are using the money for their business it is beneficial. Also it is not difficult for the money to
be retrieved as it is their money that have immediate access to it and they do not have a time limit as to
when they need to pay it back and they do not need to show any documents to anyone in order for this
money to be in their possession such as business plan.
The business can also use the share capital which is the money the business receives when they people
buy stock in their business if they are a public limited company however if they are a private limited
company close friends and family can buy shares if they are allowed. The people that buy stock in the
business are called shareholders. The business can use the money invested by the shareholders to
expand and grow because they have the right to use this money e.g. to expand and open new stores and
when they make profit the stocks are worth more. This is a good option because the business does not
need to go elsewhere to find finance as they can get it within the business and they do not need to pay it
back however they need to make profit In order to get more shareholders.
In terms of advice the business will need to decide on how they want to expand and what they need to
do to expand and grow. The business can introduce new products which will give customers something
different to buy and it can attract new customers, introduce new services, for example if the business is
selling phones they could introduce contracts and insurance for the phones, the business could also
target different customers e.g. if they are selling phones they could also introduce used phones for
people with lower income so they can afford it. Also the business can open more stores in popular
locations which will invite more people.
The business can also find websites online that offer advice such as business link who will offer them
advice on where to find finance and maintain the business. There are other websites who will give advice
on how to grow and expand business such as collaborating with another business that has similar
customers as this will increase amount of customers and sales. Also banks offer advice to businesses in
terms of how to manage the business and make it grow and they also offer loans up to £1,000,000 which
the business can use to expand and grow such as how to improve sales and cash flow. The business can
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