12.You are a small biotechnology firm and need the financial support and the set
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Question
12.You are a small biotechnology firm and need the financial support and the set-up to perform clinical trials on your formulas, what might be your best, and least risky, source of funding? Why?
13.What are the most common sources of debt financing and what are their pros and cons?
14.If you are an entrepreneur who has decided to use franchising as a means of growing your venture, what are the steps you need to take to develop a franchise system?
15.If you buy a franchise, you must pay a percentage of every unit you sell to the franchisor. That percentage is called?
a. a commission
b. a royalty
c. a franchise fee
d. collection fee
Explanation / Answer
As Mentioned in the Problem Statement, We are a Small biotechnology firm looking for financial Support, So there are Various ways available as a source of funding which are less risky as well. Let us explore few of them
1) Bootstrapping:- Many entrepreneur start with this technique in the Startup age of firm , Bootstrapping is basically financing your company with the your Personal funds, Savings. But You should Only invest a Particular Percentage of Your Saving Not complete.
2) Friends and Family:- It is Always Better to start a firm with the Group of LeaderShip so always consider your friends with the Financial Help in the firm.You Should Consider those People who can understand the Business and its risks and able to Help Firm as a leader also.
3)Angle Investor:- This Might be a Better option, There are many individual Investor who always look for Investing their Money in a Early stage startups. There is Another Option is VC(Venture capital) But VC are Not much intrested in Early stage startups or can say Seldom VC's are intrested only, But Angle Investor is Better Option These Individual can help Early stage startup in finance and can provide Leadership as well.
13)Most Of The Startups firms often finds that they must acquire debt so they can finance operations smoothly.Banks are the Most comman and very popular source of debt financing .
pros:-Lower interest rate
Tax deductions is the Main advantage of debt financing
Maintain Ownership:- You can run the operation Smoothly without outer interference.
Cons:-Repayment:- whether your firm is not doing good you need to pay the Amount.
Credit rating Imapact:- if you are keep on asking for debt it will impact your credit rating.
14)franchise is a method to grow a business by launching other outlets that can run by individual owner.There are few Steps:-
*Develop Business system
*Defining Operation Manual:- It should include Principal, rules nd Standard of Your Business.
*Agreement
*Corporate franchise support
So these are the steps for developing a Efficient franchise system
15)A royalty.
I have explained all the points in detail in case of any doubt and query please let me know in comments, i will be happy to help you.Thanks
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