Starting a Small Bussiness

I will therefore invest my personal cash balances into the start-up. This is a cheap form of finance and it is readily available. Investing my personal savings will maximize the control I keep over the business. It is also a strong signal of commitment to outside investors or providers of finance. I will raise money by Re-mortgaging. I will take out a second or larger mortgage on my second property which is a 3 bedroom single family home and then invest some or all of this money into the business.

The use of mortgaging like this will provide me access to relatively low-cost finance; it allows me, the business owner, to retain control of my company. I am therefore entitled to all company profits and have ultimate decision-making authority, it also provides me with some financial freedom; my debt is limited to the loan repayment period. After I have repaid the borrowed money, my lender has no further claim on my business.

Although I will have to make monthly payments on the loan and cash may be scarce and expenses may be higher than estimated during the early years of a new business I still prefer this kind of financing, again the risk is, if the business fails, then my property will be lost too, but I still think that it is better than the bank loan that does not provide much flexibility. From the e-Activity, discuss how you could best use an SBA loan to get your business running or expanding.

Provide specific examples to support your response. I could use SBA loans to expand my business and also get the business running by getting more equipments and other materials required for me to embark on major cleaning projects, such as power cleaning for building’s exterior and also high rise building windows. However SBA loans require a lot of procedures the SBA will normally require that at least one third of the required capital be supplied by the new business owner. Furthermore, the est of the amount must be guaranteed by reasonable business or personal assets. I will there for depend on what I have and expand gradually. Using the same small business you described in the first discussion, determine the best possible location for your business within driving distance of where you now live. Explain your rationale. I will locate my business in the District of Colombia because that is where there are most offices, and also upscale homes that have professionals who do not have time to do house cleaning themselves.

This serves as a good catchment area for my business, Discuss the layout and design configuration of a building you would like to use to house your business, including how you would comply with the Americans with Disabilities Act. The office will be disable friendly, it will have a ramp for disable and a parking designated for them. I will not hesitate to employ a qualified receptionist to manage the office even if he or she is disabled. Explain why, given the advent ges of international diversification, some firms choose not to expand internationally. When a company expands globally, their products are directed to consumers located in that country. These countries may face marketing concerns such as input costs, pricing, advertising, distribution, and promotion. It becomes difficult for such some companies to go through all this because if they do not have the ability to adapt to the country, manage and synchronize a plan in an unfamiliar environment then that becames a big challenge.

Also the political climate of a country is considered when a company wants to expand, strategically a company will not look at the market opportunities available to them alone, to make them invest in a country, they consider other factors such as investment policies, taxation its relationship with foreign investors and of course other related issues. If That does not favour the company they will invest. In terms of tax planning, companies may find it difficult to expand due to the tax ramifications. Country X (Foreign Country) may have a high tax burden on companies that choose to expand their operations abroad.

Other reasons may include the means of advertisement, the start-up costs, and the political market. As firms attempt to internationalize, they may be tempted to locate their facilities where product liability laws are lax in testing new products. Describe some examples in which this motivation is the driving force behind international expansion. One way that companies verify the means of entry into is the legal environment. These legal procedures include limitations on trade through tariffs, documentation and import regulations, various investment, tax, and employment laws; patent and trademark protection.

With these methods, companies feel motivated to move their operations abroad, in order to gain the benefits from doing business abroad. For instance, a tax credit can be imposed to companies who can prove that their gross income was incurred 80% or more in a foreign country. Other factors such as North American Free Trade Agreement-NAFTA, General Agreement on Tariffs and Trade-GATT) have shaped the international transactions of many nations to gain the benefits from the World Trade Organization.