The present project shall deal with the subject "establishment of a financing concept for a business foundation".
In introducing the topic the first part comprises the objective and the problematic of this subject. Further, we shall determine definitions of important terms as well as an illustration of important sections of this area.
For the purpose of this paper, the setting up of self-employed business activities within the legal and economic frame of the Federal Republic of Germany is regarded. Start-ups such as a company take - over, an entry into an already existing business and franchising are excluded.
Table of Contents
1. Introduction
1.1 Subject matter
1.2 Objective
2. Financing Concept
2.1 Capital requirement planning
2.2 Liquidity planning
2.3 Profit projection
2.4 Case study: Financing concept
3. Financing instruments: setting up a business activity
3.1 Equity capital characteristics
3.1.1 Equity financing
3.1.2 Venture Capital
3.2 Debt capital characteristics
3.2.1 House bank loans
3.2.2 Public financial aids
3.2.2.1 KfW- starting money
3.2.2.2 KfW- entrepreneur´s credit
3.2.2.3 KfW- entrepreneur´s capital
3.3 Mezzanine capital
4. Case study financing
5. Conclusion
Objectives and Topics
This paper aims to provide a structured approach to creating a financing concept for a new business, emphasizing the necessity of meticulous planning to avoid common causes of commercial failure. It examines both the theoretical foundations of finance and practical implementation through a case study of a solarium business.
- Capital requirement planning, liquidity, and profit projection.
- Equity vs. debt financing strategies for start-ups.
- Overview of public financial support programs, specifically KfW initiatives.
- Practical application of financing models through a solarium start-up case study.
- Analysis of business failure risks related to insufficient financial preparation.
Excerpt from the Book
1.1 Subject matter
A business is supposed to be established. At that very moment the founder is faced with an essential challenge: Who finances corporate foundations, organizational constructions, product developments or a market launch? Which possibility does one possess to support this entrepreneurial decision economically?
Business foundations are enjoying a progressively higher status through the creation of new jobs or the increase of economic competitiveness. Especially young and innovative businesses are regarded as the engine and nucleus within a system of economic, technological and social change.
A good business concept is the most important building block for a successful corporate foundation. Yet, in spite of a thought-out and well-developed business project self employment remains a choice connected to major exertion. Often, most young entrepreneurs lack sufficient starting capital and management-Know-How, in order to transfer the business concept into a workable business plan, and turn over a product or service in reality or make it competitive.
Investigations on the failure of young businesses confirm that mistakes in the area of financing represent one of the most common causes for a commercial fiasco.
Summary of Chapters
1. Introduction: Outlines the project's focus on creating a financing concept within the German economic framework, emphasizing the importance of planning for business success.
2. Financing Concept: Describes the three core pillars of finance planning: capital requirement planning, liquidity planning, and profit projection, illustrated by a solarium example.
3. Financing instruments: setting up a business activity: Evaluates various external financing options, comparing equity and debt capital, and detailing specific public support programs like those from the KfW.
4. Case study financing: Applies the theoretical financing models to the specific solarium example, demonstrating the practical allocation of capital.
5. Conclusion: Summarizes the necessity of individual financial analysis for every start-up and reiterates that no universal financing strategy exists.
Keywords
Financing concept, Start-up, Business foundation, Capital requirement, Liquidity planning, Profit projection, Equity financing, Debt financing, KfW, Public financial aids, Entrepreneurship, Solarium, Business plan, Insolvency, Investment.
Frequently Asked Questions
What is the primary focus of this paper?
The paper focuses on the critical importance of creating a comprehensive financing concept when starting a new business to avoid common pitfalls that lead to insolvency.
What are the central themes discussed?
The central themes are capital requirements, the distinction between debt and equity financing, and the utilization of public funding programs for new entrepreneurs.
What is the main objective of the study?
The main objective is to guide founders through the process of creating a financing plan, supported by a practical solarium business case study.
Which methodology is used to explain the financing concepts?
The author uses a practical case study approach, documenting the financial planning steps for a solarium, including revenue forecasting and expense calculation.
What is covered in the main part of the document?
The main part covers the components of financial planning, different types of external financing, and detailed descriptions of specific KfW funding programs.
Which keywords best characterize this work?
Key terms include Financing concept, Start-up, Capital requirement, Liquidity planning, and KfW public financial aids.
Why is the "liquidity plan" considered more critical than the "profit projection" in the first year?
The liquidity plan tracks actual cash flow, which is vital for daily operations and ensuring the business survives the initial phase before profits are realized.
What specific role does the KfW play in the financing examples provided?
The KfW provides public financial support, such as the "Starting money" and "entrepreneur credit" programs, which help founders secure capital and reduce bank risk via liability exemptions.
- Quote paper
- B.A. Christopher Ganseforth (Author), 2010, Erstellung eines Finanzierungskonzeptes für eine Unternehmensgründung, Munich, GRIN Verlag, https://www.grin.com/document/205908
