Q&A - What are the main personal sources of finance an entrepreneur can obtain for a start-up?
In practice, most start-ups make use of the personal financial sources of the entrepreneur. This can be personal savings in the building society, a bank balance. It can be providing assets for the business (e.g. a car). It can also simply be working for nothing! The following notes explain these in a little more detail.
read more...»Q&A - Should a start-up raise investment from outside investors?
You will have seen entrepreneurs making their pitches to the Dragons on Dragon’s Den – this is a good example of how a start-up or small business tries to raise capital by encouraging people other than the entrepreneur to invest in the business idea. But is this a good idea, and who should be asked?
read more...»Q&A - What are the main things to consider when obtaining finance for a start-up?
Often the hardest part of starting a business is raising the money to get going.
read more...»Q&A - Why are start-ups vulnerable to cash flow problems?
Start-ups and small businesses are especially vulnerable to cash flow problems. Here are some of the main reasons:
read more...»Q&A - How is profit used by a business?
Profit arises when total sales exceed total cost for a period. Once a profit has been made, the owners of the business have a choice:
read more...»Q&A - What are the main drawbacks to an entrepreneur of starting a business
There are many potential drawbacks to being an entrepreneur.
read more...»Q&A - What is meant by Social Enterprise?
One kind of business structure that has grown rapidly in the UK in recent years is the “social enterprise”. Social enterprises are the most common form of “not-for-profit” enterprises.
read more...»Q&A - What are the benefits of business planning to a start-up?
The main reasons why a start-up should produce a business plan are:
read more...»Q&A - What questions should a start-up business plan answer?
A business plan needs to address the issues of interest to the reader and user. Assuming that the plan is meant to be read by potential finance providers (e.g. a bank, business angel or venture capitalist) then it ought to provide convincing and realistic answers to questions such as:
read more...»Q&A - What are the main legal areas that a start-up business needs to consider?
A start-up soon finds that it needs to consider a variety of legal issues, both before and after it has started to trade. The key legal areas it must cover include:
read more...»Q&A - Compare the advantages of trading as a sole trader versus a private limited company
The main differences between private limited companies and sole traders can be summarised as follows:
read more...»Q&A - What taxes will a start-up pay?
The main taxes that a start-up needs to consider are summarised below:
read more...»Q&A - Describe the basics of setting up a business in the UK
A checklist of things to do when starting a business can run to many pages. There are many practical issues to address in terms of setting up the administration of the business, obtaining the resources to trade and then, even harder, finding and keeping the first customers! Here is a summary of the main actions that a start-up needs to address:
read more...»Q&A - Does a start-up or small business need to recruit staff?
Look at the payroll of many start-ups and small businesses and it won’t take you long to count the people. There are over 4.5 million businesses in the UK, and about three-quarters of them don’t employ any staff! That is about 3.3 million businesses that have just one employee – the owner, manager and staff all rolled into one person!
read more...»Q&A - Explain incorporation and the protection of limited liability
Incorporation is the creation of a company which then operates as a business. In the vast majority of cases, the type of company created is a “private limited company”.
read more...»Q&A - What is unlimited liability?
There is a big downside to operating as a sole trader. It occurs because, in the eyes of the law, there is no difference between the person running the business and the business itself. When it comes to chasing money owed by a business, a sole trader has to settle up.
read more...»Q&A - What is a sole trader?
Most businesses in the UK are small businesses, owned and operated by one person. In most cases, these businesses operate as a “sole trader”.
read more...»Q&A - What is profit and why is it important?
Profit is a very important concept for any business – particularly a start-up. Profit is the financial return or reward that firms or entrepreneurs aim to achieve to reflect the risk that they take.
read more...»Q&A - Why does a start-up often find it hard to estimate costs?
A business start-up is faced with the challenge of estimating what the costs of setting up and operating the business will be. It is not always easy.
read more...»Q&A - What is meant by total costs and how are they calculated?
The total costs of a business can be calculated by simply adding together the variable costs at different levels of output to fixed costs.
read more...»Q&A - What are variable costs?
Costs which change when output changes are called “variable costs”
read more...»Q&A - What are fixed costs?
Fixed costs do not change as output varies. In other words, they are fixed even if output moves up or down from period to period.
read more...»Q&A - What is meant by repeat business and why is it important?
Repeat business is all about encouraging customers who buy for the first time to buy again and again!
read more...»Q&A - Why do start-ups find it difficult to estimate revenues?
One of the hardest tasks an entrepreneur faces with a start-up business is coming up with a realistic estimate of revenues.
read more...»Q&A - What are the disadvantages to a start-up of setting up as a franchise?
Whilst starting a business as a franchise is traditionally seen as a lower-risk approach, there are some significant disadvantages to consider:
read more...»Q&A - What are the advantages to a start-up of being a franchise?
For a start-up entrepreneur, there are several advantages to investing in a franchise:
read more...»Q&A - What is franchising?
A business idea for a start-up doesn’t have to be original. Many new businesses are formed with the intention of offering an existing business idea. The use of franchises is a great example of that.
read more...»Q&A - What are the main non-financial objectives of entrepreneur starting a new business?
Contrary to popular belief, starting a business is not always about financial objectives. Very often a new business is started with other, non-financial objectives in mind. Here are some of the non-financial motives that are often quoted by entrepreneurs:
read more...»Q&A - What are the financial objectives of a new business?
This note outlines the main financial objectives that are set by an entrepreneur.
read more...»Q&A - What is meant by adding value
Adding value is a key concept in busiesss studies. This note explains in more detail.
read more...»
