how to start business with proper source

1. Our Topic
Sources of finance to start a business.

2. Group Members:
Md. Arifur Rahman ID 162-15-7784
Md. Aklasur Rahman ID 162-15-7708
Md. Mahedi Hassan ID 161-15-7418

3. What is Finance
 Finance is defined as the management of money and includes activities like
investing, borrowing, lending, budgeting, saving, and forecasting.
Types of finance
There are three main types of finance:
1. Personal Finance
2. Corporate Finance
3.Public /government

4. Finance refers to sources of money for a business. Firms need
finance to:
 Start up a business, eg pay for premises, new equipment and
advertising.
Run the business, eg having enough cash to pay staff wages and
suppliers on time.
Expand the business, eg having funds to pay for a new branch in a
different city or country

5. Sources of Finance
 Internal sources
 External sources

6. Internal sources:
Internal sources of finance are funds found inside the business. For
example, profits can be kept back to finance expansion. Alternatively the
business can sell assets (items it owns) that are no longer really needed to
free up cash.

7.  Personal sources:
Personal sources These are the most important sources of finance for a start-
up, and we deal with them in more detail in a later section.
 Retained profits :
Retained profits This is the cash that is generated by the business when it
trades profitably – another important source of finance for any
business
 Share capital – invested by the founder :
Share capital – invested by the founder The founding entrepreneur may
decide to invest in the share capital of a company, founded for the purpose of
forming the start-up. This is a common method of financing a start-up. The
founder provides all the share capital of the company, retaining 100% control
over the business.

8. Personal sources:
 Savings and other "nest-eggs”:
An entrepreneur will often invest personal cash balances into a start-up. This is a cheap
form of finance and it is readily available. Often the decision to start a business is prompted by
a change in the personal circumstances of the entrepreneur.
 Borrowing from friends and family:
Borrowing from friends and family This is also common. Friends and family who are
supportive of the business idea provide money either directly to the entrepreneur or into the
business.
 Credit cards:
Credit cards This is a surprisingly popular way of financing a start-up. In fact, the use of
credit cards is the most common source of finance amongst small businesses. It works like this.
Each month, the entrepreneur pays for various business-related expenses on a credit card.

9. External sources
Venues for obtaining funds that come from outside an organization. External
sources of finance might include taking on new business partners or issuing
equity or bonds to create long term obligation.
There are two types of external source.
Short-term sources of external finance
Long-term sources of external finance

10. A bank loan:
A bank loan provides a longer-term kind of finance for a start-up,
with the bank stating the fixed period over which the loan is provided
(e.g. 5 years), the rate of interest and the timing and amount of
repayments.
 A bank overdraft:
A bank overdraft is a more short-term kind of finance which is also
widely used by start-ups and small businesses. An overdraft is really a
loan facility – the bank lets the business "owe it money" when the bank
balance goes below zero, in return for charging a high rate of interest.

11.  Share capital – outside investors:
Share capital – outside investors For a start-up, the main source of outside
(external) investor in the share capital of a company is friends and family of the
entrepreneur. Opinions differ on whether friends and family should be encouraged to
invest in a start-up company.
 Venture Capital:
You will also see Venture Capital mentioned as a source of finance for start-ups.
Venture capital is a specific kind of share investment that is made by funds managed
by professional investors.

12. Business angels:
Business angels are the other main kind of external investor in a
start-up company. Business angels are professional investors who
typically invest 100k - 750k or more. They prefer to invest in businesses
with high growth prospects.

13. Finding financing
Finding financing in any economic climate can be challenging,
whether you're looking for start-up funds, capital to expand or
money to hold on through the tough times. But given our current
state of affairs, securing funds is as tough as ever. To help you find
the money you need, we've compiled a guide on 10 financing
techniques and what you should know when pursuing them.

14. THANK YOU