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Finance for Large Business Essay

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Below is an essay on "Finance for Large Business" from Anti Essays, your source for research papers, essays, and term paper examples.

Finance for Large Businesses
  1. As a business grows, it needs higher capacity and new technology to cut unit costs and keep up with competitors. New technology can be relatively expensive to the business and is seen as a long term investment, because the costs will outweigh the money saved or generated for a considerable period of time. And remember new technology is not just dealing with computer systems, but also new machinery and tools to perform processes quicker, more efficiently and with greater quality. In fast moving markets, where competitors are constantly updating their products, a business needs to spend money on developing and marketing new products e.g. to do marketing research and test new products in “pilot” markets. These costs are not normally covered by sales of the products for some time (if at all), so money needs to be raised to pay for the research. When a business seeks to expand it may look to sell their products into new markets. These can be new geographical areas to sell to (e.g. export markets) or new types of customers. This costs money in terms of research and marketing e.g. advertising campaigns and setting up retail outlets.
  2.   One form of finance could be to sell unwanted assets, this way no interest is paid and the finance raised does not have to be repaid. However you will no longer own that assets and the assets may still be needed by the business so there will be leasing costs. Another could be simply retaining profits and then this way no interest is paid and you will not lose ownership. However the business may not be as profitable so finance levels required may not be met. So essentially it has to be a fairly large business to be able to do this. Loans are also very good for potentially short term loans depending on how profitable the business is, they are very flexible and very low interest rates on overdrafts. This is probably to best as it is easily obtainable and for small business is the most convenient way. So...

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