STARTING AND FINANCING A BUISNESS IS " NOT EASY " , so i would like to introduce you to some topics in finance .
ONE OF THE MOST INTEGRAL AND CORE ASPECS OF BUISNESS IS " MONEY ". So it is extremely important that one concentrate on finance for a buisness o be successful.
The 1st thing i would like to introdude to u , is the TIME VALUE OF MONEY . The value of money is decreasing everyday , it could be risk , inflation or just about anything . 1 $ worth in 2009 is way more than what 1$ is worth today . So it becomes a huge part of buisness to not keep funds locked up in banks or in pockets , rather than this one has to invest in short and medium or long term securities that yield intrest and can stand up to inflation .
HOW TO FINANCE ?
For a buisness man the 1st thing he has to think of after his buisness idea , is finances . Should he use debt or use his own funds or raise using equity ?
Lets take all the ways and analyse
DEBT - If u want to start a buisness using debt , then the cost is cheaper and predictable since the intrest rate does not change , but debt is risky as banks or ur lenders expect to be indemnified against loss
EQUITY OR OWN FINANCE - U could simply use ur own money or raise other investors money for your goal . Of cource this option is less riskier since you do not have to repay the money in case of loss . They have made the decision to finance on their own and it is up to them , but this method is too costly as equity holders or youself have huge expectations , they want more profit and so the cost is more . So to find a balance between debt and equity has to be made in buisness.
THE YOU FACTOR - Of cource none of this matters if the you factor is not present . A successful buisness requires YOU to work hard and take a leap of faith , it is risky but worth a try . A leader without a strong mind is useless and so is finance without a great idea and entrapreneur . With high risk comes high reward and it is only YOU who can take the 1st step .
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