Questions:
1. Identify the steps you would take to start the business. List down the physical and financial resource requirements. Identify the sources of finance available for meeting such financial needs.
2. Assess the implication of these finance resources, i.e. the advantages and disadvantages of choosing the different sources of finance.
3. Which source of finance would you use for your business plan?
4. Explain the importance of financial planning for a small and medium enterprise in Singapore.
Our company plans to start an internet café business in Jumia residential area. The total budget for starting the business is $ 300,000. There are several sources of finance from which we can seek financial help from. Our company has some saved money of its own in the bank. The money amounts close to $ 280,000. Our company may also consider getting a grant from the government. Our company may also seek the money from venture capitalist. The last option that our company can consider is to seek for a bank loan.
Our company prefers the last option of seeking a bank loan so that the borrowed money would be repaid later on. Our company intends to seek for a loan of $ 300,000 from the Central Bank of Singapore. However, there are some physical and financial resource requirements that we must meet before the bank grants us the loan. The requirements include:
Our company would put up a large building within the area. We would then purchase computers and place in the building. Our company would thereafter, seek internet connection for the computers from the local mobile service providers. Our company has set up several number of internet cafés in different regions across the country. Our internet services have been appreciated by the members of the community in all the areas where we offer our services. We intend to improve our services even further so as to keep off our competitors. The loaned money would also be used to employs workers and run the operations at the internet café at the beginning.
The business would then be able to sustain its operations once it starts making profits. We would also be able to start repaying the loan using the money from the profits that would be made by the internet café business. According to (Jennings, 2016), bank loan finance is advantageous when it comes to funding of business because the business a company and the bank is to agree on the terms of loan repayment plan which is acceptable by all the involved parties.
Finance resources have many implications. One therefore has to compare the advantages and the disadvantages of the financial resources before making a choice. The implications of financial resources are as follows:
(Thomas, 2008) states that a company’s assets and savings can be a major of stating capital
These is money that can be given by the government to individuals or companies to enable them start business
These are people who can assist individuals or companies to raise starting capital needed for business investment
(Jennings, 2016), states that commercial banks can provide funding loans to companies and individuals for starting business activities
Our company would first carry out financial planning for our internet café business before the business is finally rolled out in the Jumia residential area
Our company would offer internet services to customers at affordable prices. We also intend to employ qualified and friendly staff who would interact and attend to our customers. The staff would be able to assist the customers wherever necessary in their attempt to access various sites in the internet. Our company would offer very fast internet which would be appropriate for all categories of people. Students would be able to undertake their online studies at our internet café without any problem. Social media users would also enjoy our services. We therefore intend to bring a complete solution to the people in regard to the poor internet services that they have along been exposed to for a long period of time.
Our company would come up with a vigorous marketing plan that would ensure that our business becomes successful in the residential area. We would carry out advertisement and road show campaigns in the area so sensitize the people about the impending opening of the internet café in the region. Our company is well aware of the challenge from the competitors that is awaiting it. We would provide free internet to the local residents for the first two weeks. The move would enable the residents to compare the internet services that we intend to offer against the services that is offered by our competitors. The residents would therefore be able to make informed decisions.
Our company would also offer other internet related services such as scanning of documents and photos, printing of documents as well as photocopying of documents. We intend to offer all these services under one roof unlike our competitors who are already in the market within the area. Our competitors are only offering internet services. Our internet café would be operational even over the weekend. All the internet cafes in the area are closed over the weekend. The people are therefore unable to access internet services over the two day period every week. Our business would fulfill the internet needs of the people in the area over the weekend. We would therefore have an edge over our competitors. Most of the local people would prefer our services because they are accessible during all days of the week.
We also intend to provide free internet services one every week to the people who frequently use our internet café. Most of the area residents would therefore prefer our services. Majority of the local people would prefer our internet services so that they can benefit from the free internet services that we would offer to our esteemed customers.
Lastly, we intend to introduce internet Wi-Fi services to the residents after our one year of operation. The local people would be able to subscribe to the internet Wi-Fi services and then enjoy internet from the comfort of their homes. This move would reduce congestion in the internet café.
Our business would be operational every day as from 8:00 am to 8:00 pm. There would be a manager at business premises. The manager would be charged with the duty of ensuring that customers’ needs are well attended to by our staff. The manager would also ensure that the quality of services is guaranteed at all times.
The internet café would be headed by a chief manager who would report directly to our company. There would also be a human resource manager and a marketing manager. The two managers would assist the chief manager in the daily running of the business of the business. Our company would also employ20 qualified workers. The workers would assist customers in case of any need. The workers would also carry out other internet related duties such as photocopying of documents, printing etc.
Source of finance for our business plan
We would seek for a loan of $ 300,000 from the Central Bank of Singapore in order to finance the business. A written agreement would be made between our company and the bank. The loan would be repaid starting two years from this moment. Our company would repay the loan for a period of 4 years. There are no internet cyber cafes in Jumia residential area. Many people have to constantly visit other areas in search of internet cafes where they can access the internet. We intend to explore advantage of the existing opportunity.
References list
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Cecile Nieuwenhuizen, H. B.-W. (2008). Business Management: A Contemporary Approach. Juta and Company Ltd,.
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Drucker, P. (2012). The Practice of Management. Routledge.
Edward D. Hess, C. D. (2008). So, You Want to Start a Business?: 8 Steps to Take Before Making the Leap. FT Press,.
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