Sources of internal and external finances for a Mr Joes
M2
Mr Joes is a Blackburn based fast food takeaway situated in the area of Shear Brow, in which they have been producing and providing an exciting collection of appealing foods and drink for customers for the last few years. Furthermore, in relation to the marketing and business sector it comes under the ownership of being a sole trader and being a public limited company.
Scenario
Due to Mr Joes being quite a successful and effective business, it had recently been up for discussion whether or not they could open another Mr Joes franchise, in which they would be able to attract more customers and earn more money. However, in order to do this, the business would have to consider all the aspects of starting another business which consist of a variety of internal and external sources of finance such as bank loans, mortgages, venture capitals. On the other hand though these sources could also have some very negative impacts which could cause failure, so the business owner should have to consider all the sources of finance and which would be the most appropriate ones to apply and its implications.
When opening another franchise, Mr Joes will need to think about and consider the internal and external sources of finance they will need to carry out. They are,
External sources of finance
factoring
bank overdrafts
bank loans
hire purchase
venture capital
equity capital
leases
mortgage
borrowing from family and friends
Internal sources of finance
retained profit
savings
Advantages of Leasing
Large Outlay – A great advantage of leasing in a business is that the overall price you pay for a product is spread over a long period of time, so it isn’t necessary to pay the entire amount straightaway for the product. This can significantly help maintain cash flow, which is very important in every business. If a business doesn’t maintain good cash flow, it will eventually result in business failures,...