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B202 – TMA 04

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					                         Start – up Business

Nowadays, the business environment has many small businesses starting in many
different fields. Most businesses start out small, so, the idea of starting up a new
business seem great and it may arise from many different situations such as a people
got frustrated with their current jobs or from working all day for a small income, or
may be to get his own business to mange and develop it to be a big business which
return back with a good profit. Also it is full of challenges. People may get excited
about the idea of starting a new business for a new product or service without really
being sure if they are ready for it from many different points, as we have many
prerequisites for starting up a new business. Any one who wishes to start a new
business should be familiar with these prerequisites; also the entrepreneur may face
some failure so we should be ready for such things. As well, we shouldn't forget the
ways of financing the new business.       There are several ways that may help in
financing.

Question One:

As mentioned above there are many prerequisites for start up any new business to
succeed. The entrepreneur should make a decision of what is the business is going to
be and select it as the selection is the most important step. Another step is planning
because it is easy to have everything failed if is not planned correctly, that's why we
should have a good plan to start the business to make it well managed and succeed.
The entrepreneur may use the SWOT analysis for his plan to put the strengths,
weaknesses, opportunity and threats. Make a plan for the business helps in making the
other details available and clear, such as identify who is going to be my suppliers and
how much the profit is going to be, who is the competitors, if there will be a products
selling what is the sales price, with planning we can figure out how to finance the new
business and put a budget for the beginning and for the business as a whole project.
Moreover the planning helps the entrepreneur focus on its business and put some
points of what are the activities and the goals the business seeking for, and how to
achieve them. Choosing the nature of the new business whether it is services,
products, retail, manufacturing, etc, know the demand of what the business will offer
for the people, the question will be "is there a need for what I am going to produce?"
the entrepreneur should has enough evidence and research if there is a demand
because this will determine the size of the business. Identifying the competitors and if
they may affects the new business. Motivation, experience and skills are all important
and should be in our prerequisites for start up a new small business because with
skills and experience the chance of successful to the business increase, have less
mistakes and more knowledge. Finally, not to forget the insurance that it should be
put for the new business.

By following these steps the new small business will result success. Many people
thinks that start up a new business is just to have an office and bring a staff of
employee and be a boss, then start to think what he is going to do or produce. Start a
new business and proceed in it need efforts and time. So if the person is not willing to
have time or make effort for the new business, then it is better not to start in it.

Question Two:

This question talks about the key sources of finance for business startup. As the
financial statement plays a very important role on starting up a new business,
entrepreneur should thinks carefully from where to get the money to finance the
business.

The finance may come from several places. Self savings, if the person was working
and collected money for future then it may be used to finance the new business , this
is the best way because there will be no need to pay interest to any other party. And
all the operation control is under your hand. But the bad thing here if the business
failed the person may face frustration. Family and friends, these can be a very good
resource for the money as your family may like to help and may be interested in the
idea itself, and they know the person and trust him. But it is a limited source if anyone
gives money once; I don't think he will give more and more. Here there is a very big
risk because the money is for one of the family member or a friend, so it will be very
impressed if the business doesn't succeed. Grants, where grants are special programs
designed for the small businesses, which has a target specific groups and businesses,
such as the technology businesses. The good thing about the grants that you don't
need to pay interest as well as it's your own money. As I understood, taking a loan
from a bank is a tough process that needs many things to put in mind, such as
understanding how to maximize the chances for success in lending a loan. Otherwise,
it is a very effective way that helps small business to be achieved. But here the
interest is present, and if the payments weren't on time I think there will be a very big
problem between the bank and the person who took the loan. Business angels, there
are people who has a lot of money and they are successful in their work and may be
they have been retired from work to take a rest. And have a big large business which
has a huge number of profit and looking to invest their money in new businesses.
Additionally they may provide guide and mentoring to the business. Here there are no
monthly payment but in the end of the year or when the business bring money. But
unfortunately they are hard to be found. Credit Cards, at this point if there isn't any
saving or didn't find the money from the family or from the friends and it was hard
to take a loan from the bank and no business angels found then using the credit cards
will be good solution, but it is the most expensive form of debt. It is a perfect way
because we pay the minimum amount. Venture Capitalists, these are individuals or
companies that have lot of money that want to invest and get more return. It is be used
if the business need a lot of money then it will be a perfect way to get the finance. The
good thing here is that when the one finish and there is more need for money they still
have more money and they are able to give you if the (business is a successful one) to
grown more and more. In the same time there are some points to put in mind when
take money from the venture capitalists, that the business has to have a fast growth in
the market.

Question Three:

   a) The Jordan Micro Credit Company (Tamweelcom) is one of the entities that
       finance small and medium sized business in Jordan.
   b) Tamweelcom is a non-profit company began its work as a limited liability
       company, established in 1999. Has its own vision and mission, its vision is to
       allow low-income to improve their living standards through micro and small –
       sized enterprises.   It provide, encourage and the best financial and non-
       financial services. Tamweelcom has many core values that are important for
       any financial services provider, raising the level of the national economy
       which has a vital role in the social that decrease the crime and increase the
       good living for people, generating and keeping a positive working
   environment, social respect, it insist on developing the working team to arise
   their efficiency. Tamweelcom has two kinds of services, financial services and
   non-financial services. The financial service include several kind of loans, the
   corporative loan, this loan is for women that have a small home-based
   projects. The hope loan, it's for both women and men who developed a home-
   based projects. The vocational loan, it's for student both male and female, the
   target group of this loan is divided to two groups who has a business already
   and the other is who has a new business and doesn't ready yet. The progress
   loan and the pioneer loan, is for the licensed projects, female and male. The
   Seasonal loan, it is for Tamweelcom's clients who have a licensed or
   unlicensed project. Finally, the loan insurance, here Tamweelcom provide
   insurance services for all its clients.

   Tamweelcom aims is to let the clients learn and educate to be able to
   distinguish between support and maintain their sustainability. Some of the
   objectives are provide loan opportunity to help the people develop their
   project and arise their income, also give the loan to people who may not be
   have the opportunity to take it from bank. Provide some services that are non-
   financial services to which they have a small business such as Souk Ayadi and
   the school grants. Increase the unemployment and the poverty level that is in
   the country. Tamweelcom has many achievements that arise from the day they
   started, it has been selected as the MFI of the month in the world for March
   2008, classified one of ten best micro credit companies in the world, received
   CGAP's Financial Transparency Award for 2006, joined the Micro Finance
   Network in 2006, became an active member in MIX Market, and joined
   Sanabel regional network in 2002.

c) If I am going to start a business, I would like to seek finance from this entity,
   because I have no savings and it is a big company in providing financial
   services. As mentioned above the entrepreneurs should choose where to get
   the finance for his new business from. It is a know company in Jordan and a
   fully owned by Noor Al – Hussein Foundation. Its core values, mission and
   objectives encourages the people to start and participate in a new business that
      will return back by a benefit for him and the social. Also its services are very
      flexible and available to both genders male and female.




References:

         1. "Supporting new business start-ups" case study.
         2. www.tamweelcom.org
         3. www.streetdirectory.com
         4. www.howtoadvice.com
         5. My General Manager gave me some ideas.
         6. www.startupnation.com
         7. www.start-business-info.com

                     Done by: Maha Walid Hikmat. – 050790

				
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posted:4/27/2011
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