MNE3701
ASSIGNMENT 3 SEMESTER 2 2024
UNIQUE NO.
DUE DATE: 27 SEPTEMBER 2024
, MNE3701
Assignment 3 Semester 2 2024
Unique Number:
Due Date: 27 September 2024
Entrepreneurship and Small Business Management
Question 1: Financing a Small Business
When starting a small business, choosing the right financing options is crucial for its
success. Below, I will critically discuss the different ways I would finance a business and
provide practical examples while justifying my choices.
1. Personal Savings
One of the most common ways to finance a small business is through personal
savings. This is often a good option because it doesn't involve taking on debt or giving
up equity. For example, if I were to start a small bakery, I could use my personal
savings to buy initial equipment, ingredients, and rent a small storefront.
Why Choose Personal Savings?
Control: Using personal savings allows me to retain full control over the
business without the need to repay loans or offer equity to investors.
No interest: Unlike loans, personal savings come with no interest payments,
which reduces the financial pressure in the early stages of the business.
Limitations: However, this method can be risky if my personal savings are limited, as it
may not be enough to cover larger expenses like scaling operations or marketing
campaigns.
2. Bank Loans