Managing the financial resources in the most effective ways is one of the biggest challenges. Not only the collection of adequate fund requires a great deal of time and effort but also management of the collected funds is quite tough task. Managers need to be very agile and proactive to maintain the flow of finance in a business and the using them as much efficiently as possible. This paper is related to the management of financial resources. The paper is segmented into four sections in which the first two is related to the sourcing of funds on a specific business. The chosen business is restaurant firm. The last two section of this paper is related to the financial decision making and financial performance evaluation.
1. Task: Different Sources of Finance.
1.1 Identification of Sources of Finance for Restaurant Business.
It is very tough for a new business to have adequate funds. Still, there are many options available to the entrepreneurs to collect funds from. Some of the major sources of funds for the firm can be shown in the box below (Cohen, 2011).
Factoring of Debt.
1.2 Implications of Sources of Finance.
Friends and Family: this is the most initial or primary source of finance that an entrepreneur can seek to channel funds into his/her business (Berk, 2013). For the restaurant business the entrepreneur can seek helps from his friends or family whether they have any surplus funds that can be invested in his business. The seed capital needed by the business plan is about £200000 of which the entrepreneur can contribute about £50000. Another £150000 can be collected from his family members or friends (Londhe and Bhattacharya, 2013). .
2. Venture Capital Firm: Venture capital firms are firms which invest in the new business venture (Londhe and Bhattacharya, 2013). At the initial stage the entrepreneur or the board of directors of a firm does not hesitate a longer portion of profit as they need to allure more funds.