Abstract
The meaning, function and importance of the four elements in the business world (investment banker, stock market, financial management, and risk financing) are presented in this paper. The author presents the pros and cons of various methods to fund the start-up of a business. In case the original plan fails, a backup plan discussing the option of borrowing money is discussed. The paper concludes with information about the Small Business Administration (SBA) that can help individuals thinking of becoming an entrepreneur.
Funding a Business Venture
Investment bankers are individuals who are responsible for underwriting securities of a company. I have discovered that investment bankers manage the issuance of bonds and counsel their clients on high-level issues of financial organization. They also propose and complete strategies for acquiring and merging with other companies, and manage the selling a company’s stock. In my opinion, this profession is very important in that, generally speaking, investment bankers are crucial figures in shaping American and world economies, along with the success of one’s personal business. (Investment Bankers)
The stock market, also known as equity market, is a public unit for the trading of securities of companies among other companies and individuals. The shares are listed on a stock exchange, as well as the shares privately traded. The stock market is one of the most important sources for firms to raise capital by allowing companies to be traded publicly or raise additional funds for development by selling shares in the public market. (Ebert, 2009)
The Term Paper on Funding a Business Venture / Investment Banker/Stock Market/Financial Management/Risk Financing
Funding A Business Running head: FUNDING A BUSINESS VENTURE Funding a Business Venture Jason L. Morales American Intercontinental ...
financial management is, simply declared, the way one budgets their money and/or finances. One who manages the finances of a company makes estimations on capital requirement, decides on capital structure, finds sources of funding, etc. It is very important to have a trust-worthy financial manager, as they are responsible for the funds and success of the business. (Ebert, 2009)
risk financing attempts to alleviate the bearing of loss costs by structuring the availability of funds to pay claims and aid in the company’s recovery. Risk financing pools help structure financial arrangements to ensure stable flow of funding into the pool that are sufficient to cover the unpredictable damage that occur due to losses. In the case of any type of loss in a company, risk financing is definitely important to enable the company to sustain financial stability as it moves forward from the loss. (Ebert, 2009)
Though there are numerous different ways to finance the start-up of a business, I feel that licensing the technology is the best choice for the particular scenario in this assignment. Licensing the technology has many pros and cons, as does any business decision that could be made.
Licensing technology is the most sensible way to begin a business in the assigned scenario. The utmost benefit of licensing a product is that there is little to no cost, as the company providing the license will pay for practically everything implicated, including patenting, packaging, design, sales, production, etc. Another pro to licensing technology is that royalty has the possibility of continuing for years, with most companies paying a portion of the expected royalty in advance to the business owner. The top thing about licensing is that there is always the possibility for line extensions and ancillary licensed goods. (Rehtmeyer, 2000)
The Business plan on Krispy Kreme Financials Donuts Product Company
Krispy Kreme first traded its Shares in the NASDAQ market on April 5, 2000. Under the ticker symbol KID Krispy Kreme started trading on the NYSE on May 17, 2001. Krispy Kreme offers 3, 450, 000 shares for the public to grasp. Financial Outlook When reviewing the financial analysis of Krispy Kreme Doughnuts, Inc we have grown by leaps and bounds in the pass five years. Management has cut expenses ...
One of the most negative possibilities to licensing the product is the chance of the product not being accepted and licensed could arise, which would put one back to where he/she started. A different drawback is that one does not have personal control over any of the decisions of the product. The company could produce your product very poorly and reintroduction of an improved version will be very hard to reintroduce into the market. Another concerning disadvantage is that licensing companies always want worldwide distribution in the deal they make with clients, but sometimes the licensing companies do not have the ability to market in certain areas. This keeps the client locked into a contract in which there is no royalty available. (Rehtmeyer, 2000)
In case the attempt to license the technology is unsuccessful in funding the start-up, one could select borrowing money as a back-up funding source to begin the business. Applying for loans can be chaotic, as there are many different types of loans available, all with different provisions. This can be a very stressful situation, in that one may feel unable to make the first few payments on time being that the business is just initiating. One also may feel the stress of not being able to successfully budget finances appropriately during the first few months as a new businessperson without going into debt. The availability of loans could depend on the type of business you are starting.
One huge advantage, to this funding option of borrowing money, is that the government encourages entrepreneurship. (Sarfin, 2010) The Small Business Administration (SBA) was founded on July 30, 1953, for the purpose of helping small businesses develop and strengthen the economy. The SBA offers not only funding, but also counseling and assistance to entrepreneurs starting their business. Individuals working with the SBA are more likely to receive help from them than individuals who are not. An advantage to getting a loan as an entrepreneur is that the investor has no say in how you run your business, or can they demand a share of the profits. (Sarfin, 2010)
The Essay on Business Ethics A Philosophical View Money And Mea
Money and Measurement Business is often thought of according to a game and in mos Title: Ethics Content: Business Ethics a philosophical view MOney and measurement Description: Game Theory Money and Measurement Business is often thought of according to a game and in most games a score is kept. A lot of board games and even quite a few card games are scored using money. The person or team who ends ...
In conclusion, investment bankers, the stock market, financial management, and risk financing are very important factors to research and consider when one considers starting a business. Investments bankers are helpful in advising for or against any financial decisions that need to be made, advising in stock market decisions, organizing financial management and explaining risk management. One considering starting their own business has many options available to fund the start-up, but should research all available options before making a final decision.
References
Investment banker. (n.d.) Retrieved from http://www.princetonreview.com/Careers.aspx?cid=84
Ebert, R.J., & Griffin, R.W. (2009).
Business essentials (7th ed.).
Upper Saddle River, NJ:
Pearson Prentice Hall.
Rehtmeyer, C. (April 14, 2000) Licensing Vs Self Production (Pros & Cons of each).
Retrieved
from: http://www.ipfrontline.com/depts/article.aspx?id=84&deptid=3
Sarfin, R. L., (October 14, 2010) Pro & Cons of Borrowing Money to Start a Business.
Retrieved from: http://www.ehow.com/about_7336506_pros-borrowing-money-start-business.html#ixzz1E4aL1MD5
