Initial capital and its sources.

SHARE WITH FRIENDS:

Initial capital and its sources.

 

Plan:

1. Funds necessary for the organization of the enterprise.

2. Initial capital calculation.

3. Expenses covered by initial capital.

 

Before we start anything in our life, we will definitely face money problem in some way and without money, it will be very difficult or impossible to achieve the desired goal. As our wise people say, money makes money. However, what should be done to solve this problem for entrepreneurs who are just starting out. In this regard, we must first acknowledge the opportunities given to entrepreneurs by our government. For entrepreneurs who have their own ideas and business plans, preferential loans will be given to them to start their work, they will be completely exempted from taxes or have benefits in the first years, depending on the type of products they produce and export opportunities. Having a number of tax and other benefits does not lead to further development of entrepreneurship. It would be correct to say that earning money is not a big problem for entrepreneurs in the current conditions, but how to increase money is a problem.

An entrepreneur who is starting his business should understand that it is necessary to have a certain amount of money during the period of establishing the business before the enterprise starts to make a profit. This amount is called the initial investment and is necessary to cover the following:

• initial costs, or as an investment investment;

• primary production costs, or as working capital.

Initial costs are the costs incurred by an entrepreneur before the start of business (in the field of trade, production or service provision). These are funds used to cover expenses investment investment also called Buying land, building a shop, buying equipment, tools, machinery, office furniture - all these are initial costs. Various fees and charges paid at the time of registration, water supply, electricity transmission, installation of telephone communication, advertising expenses about the opening of the enterprise, etc. are also included in this group.

Initial production costs are incurred when the business starts. Certain funds are directed to cover current expenses until the stage of return of sales revenues to the enterprise begins. The length of this stage depends on the specialization of the business. As a rule, in the trade sector it can last less than a month, and in the production sector, the time from the start of the enterprise to the receipt of funds in the bank account or cash register can be several months (in this case, the time spent on the production of the product, the distribution of the product the time spent in the system, for example, the time the finished product is in the factory warehouse, the time it is on the way to the wholesaler, retailer, or final customer is taken into account). The costs of the entrepreneur in this period are primary production costs or working capital called

Depending on the time of making this or that payment - before or after the start of practical operations - we include it in one of two groups of expenses. That is the difference between the groups.

The initial investment for setting up an enterprise is the sum of initial investment costs and working capital. Based on the total amount of the initial investment, the future entrepreneur decides how much money he needs to start from his own sources and how much he needs to borrow.

 

 

 

Available with initial investment хtools

Payments	Initial costs	Primary production costs	Others
Enterprise registration
Salary to employees for the first month
The architect's fee for developing the workshop project
Purchase of equipment
Purchase of raw materials
Electrical connection of machines
Purchase of finished goods
Advertisement about the opening of the enterprise
Purchase of a plot of land in an industrial zone
Luxury home construction
Salary to the owner for the first month
Stock of office supplies for two months
Electrical connection
Buying a used truck
Investment appraisal consultant
Rent of premises for the enterprise
Buying securities
Fire insurance
Employee health insurance
A private car for the owner's wife
Product transfer
Computers
Construction materials for sex
School fees for employees' children
Installation of a telephone line
Pay the first phone bill
Replenishment of goods stocks
Go to the equipment supplier
Car insurance for the first year
Truck maintenance and repair costs
Payment of interest on the loan
Returning loans from friends

The charter fund of a joint-stock company determines the minimum amount of its property at the level that guarantees the interests of its creditors. When the society is formed on the basis of state property, the market value of the enterprise (property) determined in accordance with the procedure established by the law constitutes the sum of the authorized fund of the society.

The company has the right to place ordinary shares, as well as one or more types of preferred shares. The nominal value of the placed preferred shares should not exceed twenty percent of the authorized capital of the company.

The minimum amount of the chartered fund of an open joint-stock company shall not be less than fifty thousand US dollars at the exchange rate of the Central Bank of the Republic of Uzbekistan on the date of state registration of the company, and the minimum amount of the chartered fund of a closed joint-stock company , should not be less than two hundred times the minimum monthly salary established by law on the date of state registration of the company. The authorized fund of the company can be increased by increasing the nominal value of the shares or by placing additional shares.

The decision to increase the authorized fund of the company by increasing the nominal value of the shares and to make relevant changes to the charter of the company shall be made by the general meeting of shareholders or, if the charter of the company or in accordance with the decision of the general meeting of shareholders, the decision of the company if the board of directors is given the right to accept such a decision, it is accepted by the supervisory board of the society.

Additional shares may be placed by the company only within the limits of the number of shares announced in the charter of the company.

With the rapid development of market relations in our country, small business began to develop as a component of it. The system of support and further development of the establishment of small business requires its constant improvement. In particular, the state's support measures are very important for entrepreneurs who are just starting their business, lack funds, and do not have enough skills and experience to run a business.

In economically developed countries, entrepreneurship has become an important sector of the economy, creating new jobs, providing the market with fast and necessary, high-quality products and services, as well as a factor of personal well-being. At the same time, the experience of economically developed countries shows that the lack of necessary funds for the further development of production in the small business system and the implementation of promising projects is a rather serious problem. Because most commercial banks are somewhat cautious in lending to small businesses due to the high level of risk and unreliable collateral.

Small business lending in foreign countries is mainly based on three dimensions:

• The borrower entrepreneur must be able to show that he can use his capital in a highly qualified and competent manner in order to repay the loan on time,

• The creditor should have a reliable idea about entrepreneurs, about the successful development of his business. Such draft documents should confirm the viability and prospects of the new business activity.

• The existence of assets representing the borrower's ability to repay loans on time, or the entrepreneur's personal guarantee. For example, in the United States, an entrepreneurial fund must guarantee 90 percent of the loan, and the remaining 10 percent is the bank's risk.

A state system of financial support for entrepreneurs began to be formed in Uzbekistan in 1992, based on the study of practical experiences in the field of development of small business structures in the world and a positive approach.

Mikrokreditbank, created in accordance with the decrees of the President, has become the main means of the state policy for financial support of private entrepreneurship and organization of services for small business development.

In 1995, according to the presidential decree, the small and medium-sized business development support fund was transformed into the small entrepreneurship and private business support fund (Bizne fond). He began to collect the funds from the privatization of state property and the funds intended for the reconstruction, technical re-equipment and support of entrepreneurship in order to provide loans to private entrepreneurs on a preferential basis.

 Many potential entrepreneurs have lofty business ideas and plans. But finding the capital needed to bring their plans to fruition may not be so easy. As a result, many potential small businesses do not even start. A small business owner must invest some amount of his own money in building his enterprise. But with good preparation and planning, financing can be obtained from other sources. Owner's own investment and loan from credit institutions can be the two main sources of financing for new business establishment.

Personal savings of entrepreneurs are the main source of financing for most of them by investing their capital. Experts believe that half of the funds needed to establish their own enterprise should be spent at the expense of the future owner. This means that a would-be entrepreneur has to work hard and save for several years before he has enough funds to start his business.

Money from family members and friends is the most popular source of investment financing. But you need to think and answer a number of questions. Do they not want to participate in the management of the enterprise? What happens if a business goes bankrupt? Doesn't it ruin your relationship?

Equity financing can be done by selling a part of the enterprise to one or more partners. If the partners invest their own money, it is easy to collect the necessary total funds. But the partners have to find a way with each other, which is not always easy. Because many people who start their own business want to make independent decisions, an alternative such as a corporation may be unrealistic.

Sources of business financing

Funding of own capital through investment

• personal savings;

• loans from family members and friends;

• involve one or more partners.

Loans of credit institutions

Considerations when reviewing loan orders

• type of debt;

• the purpose (use) of the loan;

• creditworthiness and good faith;

• availability of necessary skills;

• debt repayment period;

• ensuring debt repayment;

• guarantees;

• the availability of a flexible project;

• the prestige of the client in front of bank employees.

If the citizens' own funds are not enough, the entrepreneur can borrow from other sources. Lenders usually lend money to start their businesses to people they know and trust. Lenders are cautious and won't lend money if the risk is too high. They don't want to lose money by spending money on crappy businesses. For this reason, most lenders carefully review the business plan. The business plan should reflect information on the procedure for establishing and managing the enterprise, how much money will be required, and how it will be used after the enterprise begins to make a profit.

Many people think of going to the bank when they need to borrow money. But it is not easy for a small business to get money from a bank. Banks lend money only when there is very little risk of losing it. Usually they lend money only to customers they know for a long time.

Different credit institutions set different rules (practices) that the borrower must follow. Of course, credit institutions want to help potential borrowers, but at the same time, they must believe that the given funds will be returned within the terms and conditions agreed with the lender. It is important to know the factors to consider when considering loan orders.

Credit is the most widespread form of borrowing money. At present, funds from extrabudgetary funds are allocated through authorized banks, that is, banks that have the necessary agreements with the funds. In addition, in any case, an entrepreneur applies directly to a commercial bank for a loan and carries out all interactions with one or another banking system regarding the preparation and implementation of his loan program. .

Loans are divided into short-term or long-term according to the term of allocation.

• Purposeful use of debt: it is very important to trust that the customer will not invest in an illegal business or a business that is not approved by the government, or a business that is not liked by the community in the place where the entrepreneur wants to open his business.

• Тthe existence of the abilities to be learned: the previous history of the applicant's business activity will be an indicator of the entrepreneur's ability to competently and effectively implement the project. Knowing the personal qualities helps the lender to understand whether the loan will be used by the borrower or not.

• Loan repayment period: this is a very important requirement from the point of view of both the lender and the borrower. The lender should know how realistic the borrower's offer to return the money in one or another period is. The lender can determine it by making statistical and financial forecasts, on the basis of which the applicant can be recommended the real terms of repayment of the loan, as well as other circumstances - the size of the monthly contribution to repay the main amount of the loan.

• Тsupply: What type of security or collateral is acceptable for a specific lender? Even if all other conditions are met, the creditor may not grant a loan if the terms and conditions for ensuring the return of money set by the bank cannot be met. This is especially true when someone is applying for a business loan for the first time.

• Warranties: some lenders require the provision of security in the form of real estate, tangible assets, and guarantees from friends.

Basic words and phrases

 

Enterprise, individual, legal entity, entrepreneur, entrepreneurship without establishing a legal entity: individual entrepreneurship; joint entrepreneurship of individuals without legal entity status, family entrepreneurship, ordinary partnership, private enterprise, farm, farm, general partnership, limited partnership, limited liability company, additional liability company , joint stock company (open and closed type) production cooperatives, unitary enterprise, small business entities: individual entrepreneurs; micro-enterprises; small enterprises, small business entities by the form of ownership: sole proprietorship; cooperation; corporation, personnel, personnel, labor potential, labor resource, workforce, enterprise personnel, profession, qualification, personnel policy.

 

Questions for self-examination

 

1. What is the essence of the concept of "enterprise"?

2. Describe according to the different signs and characteristics of the enterprise?

3. What are the main directions of enterprise activity?

4. What forms of enterprises (legal, organizational, proprietary) do you know?

5. What are the main differences between them?

6. What business entities are called small enterprises

       is it possible

7. Advantages and disadvantages of small businesses

       tell me

8. What role does the human factor play in the enterprise?