Business

Funding My Way Towards Success AIU Online Abstract It is true what they say; money definitely makes the world go ‘round. Money is needed to, do, see, create, live, eat, purchase, produce, take care of and so forth. Without money, for any source, someone that may have the dream of creating the ultimate product may never be able to allow the dream to become reality. Often as individuals we come up with ‘off the wall’ ideas to invent items that we believe, no one else, may have not thought of yet. However, either an individual’s idea or ideas never make it on to the market or someone else tends to beat them to it, simply because, one did not have the funds and or did not know how to obtain the funds needed to produce the product, or open a business or whatever the case may be. If wanting to put an idea into play one has to thoroughly look into the options laid out to do so. This report will give a brief summary on different routes one may take to generate funding, as well as defining and identifying the uses of Investment Banker, Stock Market, Financial Management, Risk Financing along with a bit of decision making and reasoning. Funding My Way Towards Success Investment Banker, Stock Market, Financial Management and Risk Financing, what does all this mean' What do they do, and how important are they really' Beginning with Investment Banker, I absolutely love that title, but what exactly is an Investment banker' An Investment Banker is described as an individual or possibly an institute that works as an agent issuing securities as well as looking to inform and advise corporations about items such as mergers, private equity and reconstruction of corporations. When dealing with investment banks, they do not work like your traditional bank; don’t expect to make deposits or even apply for individual loans. Stock Market provides a market dedicated to the public to embark in trading company stocks or shares. This is where companies look to when wanting to generate funds. They do this by issuing out shares of the company to those who make investments. It is also a place where an investor can purchase as well as sell shares. This becomes beneficial for companies because their shares are high due to market value which will allow them, if need be, to raise more capital. Financial Management, in my opinion, is the key to success; rather it’s used on a business or personal level. Financial Management provides the support needed to make smart financial decisions. It equips individuals with the knowledge needed to understand financial repercussions before any decision takes place as well as keep track of their decisions in case any repercussions occur, as well as take notes on lessons learned from particular experiences. Ensuring that a company has enough financial resources to keep afloat is also a benefit of Financial Management. Along with providing what is needed to stay on top of being organized and what actions need to be carried out when dealing with assets, liabilities, financial negligence, fraud, public funds and anything else that falls under the categories of executive orders and legislation. When a company encounters financial losses during the time frame of which business is conducted, the term Risk Financing is referred too. The ‘Financing’ portion of the term is the resources that have been secured and can be used to counterbalance the losses of the company. Another major positive in Risk Financing is allowing the utilization of insurance. This simply means that if a company endures losses due to a certain project delegated to the business itself, the company can then handover the ‘Risk’ to the insurance provider in which they will then cover claims for retribution. This strategic financial way of assurance is expensive; however, it allows a ‘piece of mind’ by covering losses if a project fails and not have to deplete other assets of the company. Continuing the building of my project and looking into the options of borrowing money, selling stock or licensing the technology, I would make the simple decision of selling stock. Selling stock to me is the absolute preferred way to go when considering my options to fund my project. I would choose to sell stock simply based on how selling stock generates funds for a business. Successfully selling stocks and shares of my business will hopefully prevent me from having to borrow money and then initially having to pay it back, with of course, interest, which to me means giving money away. With every option of anything there come pros and cons. What are the benefits of selling stock to generate funding' It is not money that has to be repaid nor does it cost a single cent of interests. i.e. Someone comes up with an idea that may better a business or product, to fund this new idea funds from stockholders are used, “Oh No!”, the idea fails, BUT, because the funds used for this new idea was not borrowed and has to be repaid with interest by a certain amount of time, spending funds on this new idea prevents the company, business, product etc. to take such a hard hit. And, also, if money isn’t borrowed I won’t have to worry about having to put up collateral. Disadvantages to selling stock, I would then have to “share” portions of my company, which now means, I have a personal commitment to ensure my business is ran properly not just for myself anymore, but now for those who are funding my business. Another concern as far as a disadvantage of selling stock is that, when doing so, there is a large amount of extensive paper-work that has to be filed during this process is when the accountants, attorneys and auditors come into play, which can then become very costly. Lastly, I believe which is more of a potential disadvantage to those whom are purchasing stock, but also concerns me as a caring business owner; is a term known as dilution. In the stock world dilution means that as more and more shares are issued out to buyers, the percentage of shares given to prior shareholders depreciates. Another option I would look into considering would be to license technology. In the beginning this seem like the ultimate way to go; I basically can pick a super cool feature that only my company, business or product produces and license it out to another company and as their sells generate, I profit as well. But, then I stopped and thought about it, ‘what if the only reason people buy my product or deals with my business or company simply because of that particular feature'’, once I license it out will I be making more money or will I possibly lose clients to the company I license my technology out to and be making less money in the end' Even with this being thought about, I still would deeply consider licensing technology, before I make the consideration of borrowing money. In my personal opinion, selling stock would be the route I would take, ‘hands down’. References Alder, D. (Writer), & Sweeney, B. (Director). (1961). Andy Saves Barney Morale [Television series episode]. In S. Leonard, D. Thomas (Producer), The Andy Griffith Show. North Carolina: CBS. Lategan N. (2009). Retrieved from http://www.seasonsouth.com Scott, S. (2012). Retrieved from http://smallbusiness.chron.com/advantages-borrowing-money-start-business-10994.html Tatum, M. (2012). Retrieved from http://www.wisegeek.com/what-is-risk-financing.html