Capital from profit Essay Example for Free

Capital from profit Es secernateDescribe the sources of internal and orthogonal finance, available to Barneys commerce.There are two main ways that calling can access financial resources1. Internal sources ( within the backup)This is the coin you can get within the businessOwners savings- I believe Barney has around currency for himself if he is thinking to start a new business, because its the owners who are often invest in their conjunction to cover the setting up costs. It might be the only source they available direct for them as for sole traders like Barney, banks or other financial institution unlikely to cracking a loan as there is too much risk involved, and if you have that kind of money it is very good for the business as you will not have to pay it back by periodic or pay an interest. Capital from profit- this will become available after the business set up and operating. Once they have run for certain time, they may make some profit to invest into the bus iness to run or buy more stock or buy new machinery to grow the business2. External sources (outside the business)There are number of different external sources that business can get money from to help them to set up or invest in.Banks- they can offer loans, overdrafts and business account to businesses barely you will have to have a good business picture to get it. Loans are not easy to get and might not be a good option for small business as you must pay it back with interest in certain amount of time and if the company goes down the owner will end up with huge debt. The choice I would suggest is the overdraft for him as it is flexible and you wont have to pay a penny unless it is used, there are some banks who offer interest free overdraft, if you can get it will be a winFriends/Family- you can eer seek for help from your friends and families and you can even offer them a share for return of their investment or just borrow some money from them to put towards the business if th ey are nice enough. I would say it is the best option of borrowing money as you dont pay interest and it is your family they will not give you to court unless you run with their money.Government grants- these are available from the EU, national/local government. A grant is money you can receive as a business man a good thing virtually it is that you dont have to pay it back. If Barney falls under the age group of 18-30 he can get a low interest loan from Princes Trust.(a) The consumption of budgets, and how they can be used to monitor and control the mathematical operation of Barneys business, including, the monitoring of roleplayual performance against budget and the use of variance analysis.Budget is a written plan with spending which will occur and a revenue that is need in the future to cover these costs. The purpose of it is it gives you clear understanding of what to expect to spend/receive in the future (coming year) to prevent or act any crisis before it happens. It als o can be used as a communication amongst the employees to understand the objectives of the business and work towards it. For owners they can see how well their managers managing the budget plan and performance of them.