MNE3701 Assignment
3 (COMPLETE
ANSWERS) Semester 2
2024 - DUE 27
September 2024 ;
100% TRUSTED
Complete, trusted
solutions and
explanations.
ADMIN
[COMPANY NAME]
,MNE3701 Assignment 3 (COMPLETE ANSWERS)
Semester 2 2024 - DUE 27 September 2024 ; 100%
TRUSTED Complete, trusted solutions and explanations.
Having acquired sufficient knowledge and skills on financial
management for small business, you must demonstrate practical
competencies in constructing financial statements and in
conducting feasible financial forecasting. As a new entrepreneur
understanding financial management and accounting, forms an
integral part of running your small business. In addition, you
should also be able to forecast the financial outcomes that could
result from your decision. The projections of business’s profits,
its assets and financial requirements, and its cash flows are
essential in determining whether your business is economically
viable. Having acquired sufficient knowledge and skills on
entrepreneurship and small business management, you must
demonstrate practical competencies in financing the financial or
capital needs of your business, building customer relationships,
developing the product and managing the supply chain of your
the business. Think of any business you would like to start and
answer the following questions: QUESTION 1 With reference to
practical examples, critically discuss how you would finance
your business. Motivate why you choose specific ways of
financing over others. (10)
To effectively finance a new business, it's important to explore
various financing options and select those that best align with
the business model, growth prospects, and financial needs.
Here's a detailed discussion on how you might finance a
business, using practical examples:
, Business Financing Options
1. Personal Savings:
o Description: Using your own savings is a common
method to finance a startup. This can include funds
from personal savings accounts, retirement accounts,
or other personal assets.
o Example: Suppose you plan to start a boutique coffee
shop. You might use $20,000 from your savings to
cover initial expenses such as equipment, renovations,
and inventory.
o Advantages: No interest payments or equity dilution.
Full control over the business without external
pressure.
o Disadvantages: Risk of personal financial loss.
Limited by the amount of personal savings available.
2. Family and Friends:
o Description: Raising funds from family and friends
involves borrowing money or receiving investments
from people you know.
o Example: If you want to launch an online retail store,
you might ask relatives to invest $10,000 to help with
initial stock and marketing expenses.
o Advantages: Potentially more flexible terms and
lower interest rates. May not require formal
agreements.
o Disadvantages: Risk of damaging personal
relationships if the business fails. Potential for
misunderstandings regarding the terms of investment.
3. Bank Loans:
