Running head: STARTUP FUNDS AND WORKING CAPITAL STRATEGY
Startup Funds and Working Capital Strategy
Alysia Leverette
Instructor: William Creamer
Course: BUS 313 Introduction to Entrepreneurship
May 18, 2018
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STARTUP FUNDS AND WORKING CAPITAL STRATEGY
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Startup Funds and Working Capital Strategy
Startup Funds and Working Capital Description
Startup funds are needed to establish and begin the business while working capital are
funds that are needed to keep the business going. Working capital is the money that the business
will use to keep the operations going and paying the bills. To calculate working capital, the
difference between current assets and current liabilities is obtained (Davila, Foster, & Gupta,
2003). On the other hand startup capital is the money that the business will need to obtain office
space, get permits and licenses, product development, manufacturing, and marketing expense.
A Method for Obtaining the Necessary Funds
To obtain the startup capital, the business will borrow from a bank by acquiring a
business loan. Further, the business will seek venture capitalist, investor(s) (Davila, Foster, &
Gupta, 2003). The bank loan will be acquired with a promise to make monthly payments to pay
down the debt, in additional to interest. In the case of an investor (s), the business will negotiate
for startup capital in exchange for offering a certain stake of the company. Startup capital will
also be sought from venture capitalists who will provide rounds of funding beginning with the
initial funding that will be used to launch the business (Davila, Foster, & Gupta, 2003). When the
business grows, sufficient revenue will be generated to sustain operations.
On the other hand, the business working capital will be obtained from:
i.
Equity
ii.
Trade creditors where trade creditors will extend terms which will enable the
business to acquire big orders.
STARTUP FUNDS AND WORKING CAPITAL STRATEGY
iii.
Factoring where a company will buy the business’ account receivable.
iv.
Line of credit where the business will acquire from banks on the basis of
equity and collateral.
v.
Short term loans can be obtained to finance the temporary working capital
needs of the business.
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STARTUP FUNDS AND WORKING CAPITAL STRATEGY
References
Davila, A., Foster, G., & Gupta, M. (2003). Venture capital financing and the growth of startup
firms. Journal of business venturing, 18(6), 689-708.
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Running Head: BUSINESS MODELS
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Business Model Outline
Alysia Leverette
Instructor: William Creamer
Course: BUS 313: Introduction to Entrepreneurship
Date: April 20, 2018
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BUSINESS MODELS
Introduction
The Freight brokerage industry is among the most relevant business concepts in the
logistics industry. The business is a multi-billion dollar industry with many gaps waiting to be
filled as connectivity continues to make the world smaller and smaller. To launch a successful
freight brokerage startup, a perfectly executed business model remains an ideal strategy in the
crowded market. The existed of numerous business models that serve as the launch pad to a
seriously competitive startup is the key epitome of the business concept.
Some of the common business models that could work for a freight brokerage startup have been
identified as following;
Reverse auction model
This is a business strategy that aims at disrupting the fixed price market by giving pricesensitive buyers the opportunity to quote their price. This model has been identified as a readyto-go model for startups. Besides consumers liking lower prices, they are rational business
players in the market. This rational concept guarantees the startup of plenty profits, as most of
the quotes are assumed to be logical even at the lowest price in the market.
Demand aggression model
The demand aggression model creates the deepest pools of buyers and sellers as the
model aims at creating a virtual platform for both categories. Price is not fixed rather negotiated
differently between the seller and the buyer. This is the strategy that has worked for eBay.
Cut price strategy
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BUSINESS MODELS
The freight brokerage industry is a growing business and a great future looks inevitable.
This faith in the business is pushed by the growing connectivity between people of different
regions fueled by technology and across the realm demand for products. A lowered strategy
would ensure the business of a faster growth characterized by high traffic, increased business
base, and profits as well. This is the strategy that has worked out for Amazon.
Cut Price Model
The cut price strategy seems the most convenient for the startup. Being a new player in
the industry will take some efforts to emerge as a successful business in the crowded market. A
cut price strategy would ensure that the startup would have a point of attraction to sellers and
buyers. This strategy pays off with time, as volume becomes more improved with time. Utilizing
social media platforms to gain new targets is a viable idea owing to the shift of market to online
platforms.
A startup idea I would like to research and learn more about is Freight brokerage. Freight
brokerages and agents are in high demand as companies seek to make shipping more efficient
and affordable. I have always desired to own a business with my husband, who currently works
for a trucking company as a carrier. I first took interest in Freight brokerage after attending a job
seminar, after leaving it I felt this was the perfect opportunity for us to work together doing
something we both enjoy, helping others and getting paid to travel. I began to do some research
right away on the background of the business through online research and meeting with agents
that are currently in the business. In doing research I found several companies in the Atlanta, Ga
area that offer 2-day (weekends) Freight broker classes, this is one way to test your business
idea, we would like to seek funding through grants in which we would then have to write a
business plan. To make it legal we would have to be sure everything is done by the book.
Afterwards, we would begin marketing and launch our business.
Assignment 4: Final Business Plan
Due Week 9 and worth 220 points
Now it's time to pull everything together and create your final business
plan. Make
sure to review all
the feedback you received for Assignments 1, 2 and 3. and make the necessary corrections.
Then copy and paste it all into one
is
in business require considerable planning. You will need to discuss two key factors to consider when planning your exit strategy.
Write a five (5) page paper in which you:
1. Write a one page executive summary that includes your company profile and goals.
2. Revise and insert the business models section you developed for Assignment 1.
3. Revise and insert the target market section you developed for Assignment 2.
4. Revise and insert the startup funds section you developed for Assignment 3.
5. Write a one page exit strategy where you discuss two key factors you would consider when planning an exit strategy. Provide explanation to support your reasoning.
8. Format
your assignment according to the following formatting requirements:
a. Typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
b. Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page is not included in the required page length.
The specific course learning outcomes associated with this assignment are:
Examine the process of innovating and developing ideas and business opportunities
• Analyze different innovative business models to determine the best model for a specific venture.
• Analyze the management of a successful innovative company.
• Examine the process of developing a business plan and setting up the company.
• Analyze the market, customers, and competition of entrepreneurs.
• Determine the most efective communication process to present the business to investors
noney sources for finding and managing funds.
• Analyze methods for exiting the venture.
• Use technology and information resources to research issues in entrepreneurship.
• Write clearly and concisely about entrepreneurship using proper writing mechanics.
Assignment Overview
Have you ever wondered what it takes to start your own business? Now, you don't have to! In this course, you will develop a business plan for a small business or startup. You will do this through a four-part assignment where you will gradually build up your idea into a completed plan.
First, you need to propose a business idea and submit it for approval. This could be a small business or startup of your choice. Then, each of the assignments throughout the quarter will build on each other to form a final business plan. You will take feedback from all submitted portions of your plan revise, add a few
final pieces, and then submit the final business plan
The assignments are as follows:
• Assignment Topic
Choose a small business or startup idea you would like to research and write about for the quarter, and submit your idea for approval.
• Assignment 1: Business Models (100 points)
What is the best business model for the small business or startup you have chosen? In one page, outline at least three different business models and then select the best model for your business. Then, give a short statement explaining why this is the best model.
Assignment 2: Target Market Segment (100 points)
Who is your target market In a one page paper, develop a full target market segment for your business plan.
• Assignment 3 Startup Funds (100
a points)
v plan for the startup funds and working capital strategy for your business plan
• Assignment 4: Final Business Plan (220
points)
Now it's time to pull everything together and create your final business plan. Make sure to review all the feedback you received for Assignments 1, 2 and 3, and make the necessary corrections. Then copy and paste it all into one document, and add an executive summary and an exit strategy. The
executive summary is a snapshot of your business plan as a whole and should touch on your company profile and goals. Additionally, the most successful exits in business require considerable planning. You will need to discuss tivo kay factors to consider when planning your exit strategy.
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