Sources of Finance

You want to set up your business, it's not bad. All right - but one big ques­tion: "Where are you going to get the capital?" Finding the capital is the biggest problem. The first thing to do is to estimate how much capital will be needed. What fixed assets will be needed? What current assets? The amount needed will depend upon the type of business.

There are a number of sources of capital. Owner's private savings are the most obvious source. Any future busi­nessman should have sufficient faith in his project to back it with his own money. If not, he can hardly expect others to risk their money. The advantage of an owner using his own money is that the business remains free of commitments to partners. It also means that all the profits will be his.

Capital can sometimes be obtained in the form of loans from friends, neigh­bors or relatives. One difficulty here is a friend or relative, though not keen to lend the money, may not like to refuse. Another disadvantage is that, with any business, there is always risk. This means that, if money is obtained in this way, the bor­rower may one day have to look the friend or relative in the face and tell him that all the money has been lost. And at last you may take loan from a bank. All com­mercial banks are involved in lending money to suitable business. A loan is usually for a fixed, clearly stated period. Interest is charged on the full amount of a loan. So, sources of finance for any businessman are different, but the problem of getting them is much more difficult. We wish every trader and buyer not to suffer money problems.

Marketing

Marketing involves selling, distribution, buying, transportation of goods. Marketing also involves keeping producers aware of the needs of consumers and ensuring that their products are made available to consumers in the way and form they want. Two things are necessary for marketing: producers and consumers. Pro­ducers must know what to produce. Consumers must know that it is being pro­duced. Linking these two factors together is the task of the marketing staff.

Marketing has some functions. They are: market research, distribution, pric­ing, advertising, selling.

Market research involves the finding out what consumers want, for example, standard of quality, style of packaging, and choice of brand-name and design of prod­ucts.

Distribution is important too. Products can be distributed to consumers in different ways, through retail outlet, network of wholesalers or retailers or by di­rect mail-order.

Pricing should be in close touch with market conditions. Marketing managers have to advise and determine the best prices for goods.

Advertising is the promotion of new goods. If customers do not know about new products, they will never buy them. Marketing managers should know the best ways to advertise products. This involves choice of media, for example, radio, television, press and so on.

Selling is the skill of personal selling, together with display and presenta­tion, such as window displays, exhibitions, and product promotions.

So, marketing and the development of all its branches are linked together and important for well-being of mankind.