financing of business October 2015
we all know that every business require some amount of money to start and run the business whether it is a small business collage manufacturing or trading or transportation business money is an essential requirement for every activity money required for any activity is known as finance so the term finance refers to the money required for Business purposes and the ways by which it is raised does it involves procurement and utilisation of funds so that business forms will be able to carry out their operations effectively and efficiently you know that a business unit cannot move a single step without sufficient amount of Finance but before discussing the importance of Finance let us learn in detail as to why does the business need funds every business needs funds mainly for the following purposes to purchase fixed assets every type of business needs some fixed assets like land and building furniture machinery DC a large amount of money is required for purchase of the assets to meet day to day expenses after establishment of a business fund sir needed to carry out day to day operations purchase of raw materials payment of rent at Texas telephone electricity bills wages and salaries to find business growth growth of business may include expansion of existing line of business as well as adding new lines to find and search Roth 1 needs more funds to be the time gap between production and sales order spent on production is realised only when sales are made normally there is a time gap between production and sales and also between sales and realisation of cash inside during this interval expenses continue to be incurred for which funds are required to meet contingency funds are always required to make the ups and downs of business and for some unforeseen problems suppose a manufacturer anticipate shortage of raw materials after a period then he would leave to stop the raw materials in large quantity but he will be able to do so only if sufficient money is available with him global business opportunities fund has also required to develop business opportunities suppose a company wants to submit a tender for which some amount of money is required to be deposited along with the application in case of non availability of funds it would not be possible for the company to submit the tender steak another example vanaj stockist of a special discount on large amount of purchase of any particular material manufacturer can avail of such offer only if he has adequate funds to buy itimportance of Business Finance finance is the most important requirement of every business and it is considered as lifeline of the business inadequate finance porject many problems and may bring an end to the life of the business the important the importance of Finance a considerable increased in modern days due to falling reasons in addition to the usual need need for logical operation now a days business activities are generally undertaken on large scale the products of any country and affiliate easily available in other country the entire world has become a big market so to survive in the business world the Businessman has to explain the origin of Resistivity and function on large scale this expansion of business always gives more points use of modern technology use of latest technology in the process of production and distribution has become imperative for every business now a days to meet the competition production process modern machinery equipments and tools in there is a greater need for finance to meet the challenge of the worlds market successfully promotion of sales in this area of competition lot of money is to be spent on activities for promoting sales in OLX advertisement personal selling use of sales promotional schemes providing after sales services and free home delivery etc with maid huge amount of funds types of Business Finance you have learnt that in every business activity money is an important as well as essential component now let us discuss the nature and type of anil of the business Enterprises for business of funds required usually differs from 1 to another for instance If the size of penis is large the amount of energy required will also be large like why are more interested in business as compared to trading business to business need funds for longer period to invest in fixed assets like land and building machinery etc sometimes the business also needs wants to be invested in shorter period so based on your period for which defines a required classified into 3 categories short term finance medium term finance and long term Finance
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