Question

1. What is the difference between debt and equity funding?

2. List four common sources of funding for a small business.

3. What are operating expenses?

4. List at least four common startup costs.

5. List at least two ways you can improve your company's cash flow.

Answer 1

@Oscarmenot

Answer 2

@16dsanders @micahpkay

Answer 3

Sorry, I suck at business type things :/

Answer 4

@kewlgeek555

Answer 5

1.
Based on the Business Dictionary, debt is A duty or obligation to pay money, deliver goods, or render service under an express or implied agreement. One who owes, is a debtor or debitor; one to whom it is owed, is a debtee, creditor, or lender.
Use of debt in an organization's financial structure creates financial leverage that can multiply yield on investment provided returns generated by debt exceed its cost. Because the interest paid on debt can be written off as an expense, debt is normally the cheapest type of long-term financing.

Based on Investopedia, an Equity Fund is a mutual fund that invests principally in stocks. It can be actively or passively (index fund) managed. Also known as a "stock fund".

Now here's the explanation of an Equity Fund:

Stock mutual funds are principally categorized according to company size, the investment style of the holdings in the portfolio and geography:

--> Size is determined by a company's market capitalization, while the investment style, reflected in the fund's stock holdings, is also used to categorize equity mutual funds.

--> Stock funds are also categorized by whether they are domestic (U.S.) or international. These can be broad market, regional or single-country funds.

--> There are so-called "specialty" stock funds that target business sectors such as healthcare, commodities and real estate

Answer 6

2. The 12 Best Sources Of Business Financing --> http://www.forbes.com/2010/07/06/best-funding-sources-for-small-business-entrepreneurs-finance-dileep-rao.html

(remember to skip the ad correctly and not accidentally get into the ad xD)

Answer 7

3.

Investopedia says OPEX is a category of expenditure that a business incurs as a result of performing its normal business operations. One of the typical responsibilities that management must contend with is determining how low operating expenses can be reduced without significantly affecting the firm's ability to compete with its competitors.

For example, the payment of employees' wages and funds allocated toward research and development are operating expenses. In the absence of raising prices or finding new markets or product channels in order to raise profits, some businesses attempt to increase the bottom line purely by cutting expenses.

While laying off employees and reducing product quality can initially boost earnings and may even be necessary in cases where a company has lost its competitiveness, there are only so many operating expenses that management can cut before the quality of business operations is damaged.

Answer 8

4. http://smallbusiness.intuit.com/news/Achieving-sales-&-profitability/19199534/Common-Start-up-Costs-for-Small-Businesses.jsp

Answer 9

5. http://www.inc.com/guides/2010/06/how-to-improve-cash-flow.html

Answer 10

That was a lot of research. The good thing of this subject is that if you don't know, you can just conduct research or ask local small businesses. c;

Answer 11

Thanks!!!!