| Capital is normally required for three | | | | to increase the plant size to keep up with |
| possible applications, namely:1. Fixed | | | | the huge demand.Just a final note on equity |
| Capital:Fixed capital refers to your business | | | | financing, in general there are two main |
| needs to buy fixed assets. This means that | | | | sources of funding for a business namely debt |
| you need the capital to buy things like | | | | and equity financing. The main difference |
| buildings, machines, computers, vehicles and | | | | between the two is that with debt financing |
| furniture. These items are normally purchased | | | | the lender does not acquire ownership or any |
| for use in the business and not for resale. | | | | say in the day to day running of the |
| The purpose is to generate sales. They do not | | | | business. However, the cost of such a benefit |
| have a resale value and can be liquidated | | | | is interest that you must pay on the amount |
| again, but in most instances lose value over | | | | borrowed. Equity financing does not normally |
| time. This is called depreciation. | | | | involve any costs such as interest but you |
| Depreciation is seen as an expense and is | | | | might have to sacrifice a certain percentage |
| recorded in the income statement. Land is the | | | | share in ownership.Forms of equity |
| only item that does not depreciate. Fixed | | | | financing:1. Personal fundsIt is the most |
| assets on the other hand are recorded in the | | | | common source of funding a business. It comes |
| balance sheet. When planning your business | | | | either from personal savings or a re-mortgage |
| you must determine how much you will need for | | | | on a house.2. Friends and relatives:As the |
| fixed assets. This capital will then be fixed | | | | name suggests, this form of financing is |
| and will not be available to for something | | | | derived from the support of friends and |
| else. Note that there is generally a cost | | | | family. People who know you and trust your |
| linked in obtaining such capital. This will | | | | business concept. However there are potential |
| limit the amount that you can justify. | | | | pitfalls, money, friends, family and an |
| careful planning of your fixed asset | | | | unsuccessful business do not go hand in |
| requirements is therefore necessary.2. | | | | hand.3. Equity shares:This form of financing |
| Working Capital:Apart from buying assets for | | | | normally refers to partnerships and closed |
| your business, you will need cash to run your | | | | corporations. This option provides an |
| business. Capital that will work for you and | | | | opportunity to get hold of additional capital |
| generate a profit. Working capital is used to | | | | for the business by accepting a partner or a |
| buy items like raw materials, paying wages | | | | member who possesses the financial means, but |
| and electricity. Since you wont have have an | | | | usually means a sacrifice in percentage |
| unlimited amount of money available and sales | | | | ownership. where you will find Global |
| income is not always sufficient, planning | | | | solutions and ideas. |
| your money supply is very important. To know | | | | |
| how much money you are going to need and at | | | | Turtle Herb Estate Holdings consists of 3 |
| what stages, you will have to compile a cash | | | | forward thinking entrepreneurs with expertise |
| flow statement. Remember working capital is | | | | in marketing & DTP advertising, farming |
| not profit, it is money needed to generate | | | | culinary and medicinal herbs, web design and |
| profit in the long term.3. Growth | | | | online marketing, horse breeding (sport |
| Capital:Growth capital surfaces when an | | | | horses),animal health products, import and |
| existing business expands or changes it | | | | export, engineering and industrial design |
| direction. For example, a small manufacturer | | | | (water solutions), arts and crafts. With a |
| of TV cabinets sees his business skyrocket in | | | | combined wealth of 80 years experience in |
| a short time period. With orders streaming in | | | | various lines of business, we embrace a |
| , the business needs a sizeable cash infusion | | | | holistic approach to entrepreneurship. |