Answer to Question #295404 in Management for nethanya

Question

Set up an imaginary

business. Make a list of

assets you will have to buy,

the amount of labour you

will need. Categorize the

expenses as Capital

expenditure and revenue

expenditure. Find out about

different sources of finance which are available to finance your business. Try to include information on the rates of interest that would be charged to you. Show how you might use these to finance different aspects of your business. Justify your choice. Explain why you might use some forms of finance rather than others.

Answer 1

Since black coffee will make up a large amount of my store's sales, I'll need a strong coffee maker. The coffee maker should be sturdy enough to brew a significant quantity of coffee every day, as well as quick enough to fulfill demand during the busiest periods of the day (typically mornings) and large enough to manufacture huge quantities of coffee (so you aren't constantly producing coffee). Multiple coffee machines will be brewing various blends at the same time in the coffee shop, but I'll be careful not to overextend myself. At any given time, I'll have three or four blends on hand. Other assets will include a high-quality espresso machine, an industrial coffee grinder, POS system and website, curbside pickup supplies, industrial blenders, ovens and toasters, refrigerators and freezers, as well as a security system. After I've finalized my coffee shop equipment list, I'll be able to concentrate on the other aspects of running a business, such as employing cashiers and baristas, designing my coffee shop floor plan and goods, and developing a distinctive brand. The coffee business will have a strong foundation for success if the correct tools and equipment are in place. I will apply equity financing to fund my business. The income will come from my personal savings. I'll set aside a reserve fund in case I need additional funds to get me through a difficult phase.