Chapter 5: Entrepreneurial Finance and Accounting

process of acquiring capital and making financial decisions for a new venture or
startup

involves approaching investors and seeking loans that can allow them to
launch operations and acquire resources

3 Types of Entrepreneur Finance

Angel Investment - wealthy private investors focused on financing small business

ventures in exchange for equity
Venture Capitalist - purchases a stake in an entrepreneur's startup and helps fund
and cultivate the company into a successful corporation
Financial Bootstrapping - process of launching and growing a business without
external help or capital

Entrepreneurial Finance - study of value and resource allocation, applied to new

ventures

Crowdfunding - a business or new venture is presented online with a summary of

the business plan, with the objective of raising money from individuals

4 Types of Crowdfunding

Equity Crowdfunding - process where people can invest in an early-stage

company which is not listed on a stock market in exchange for shares in that
company
Reward-based Crowdfunding - Backers who invest in reward-based
crowdfunding are often given something in exchange for a financial contribution
Donation-based Crowdfunding - used by individuals or non-governmental
organisations raising money for a cause
Debt-based Crowdfunding - investors lend money through a platform to a
business, removing the middlemen who would have been involved if the
transaction had happened through a bank

Credit - more flexible form of finance that allows you to access the amount of
money loaned, according to your needs at any given time

Budgeting - spending plan for your business based on your income and expenses
Effective Spending - Spending money wisely is critical to the success of a
business in both the short and long term.

Trade Credit - An inexpensive route for entrepreneurs to explore when raising

capital as it relies on the ability to utilise company resources and opportunities.

Initial Public Offering - first time a company sells its shares to the public in a bid
to raise money

Business Loans - come from private companies or can be government-funded, and

are an option for financing the needs of a new business

Entrepreneurial Accounting - proper accounting can help you better understand

your business’s financial health and make informed decisions about your
company’s finances

4 Benefits of Accounting in Entrepreneurs

Budget for expenses - Accounting can help entrepreneurs create and manage
detailed budgets for their businesses
Improve Efficiency - With a proper accounting system in place, entrepreneurs can
forecast revenues for their businesses
Simplify Tax Season - Accounting helps entrepreneurs prepare for tax season, to
ease the headache of filing income taxes
Monitor your Growth - Accounting gives you a handle on your company’s assets
and liabilities and how they change over time, which lets you monitor the growth
of your business

Advantages of Financing

Boost Sales
Increase Average Order Value
Improve Cash Flow
Attract New Customers
Earn Repeat Business

Disadvantage of Financing
Bank loan.
The money needs to be paid back with interest.
Interest payments on the loan increase cost, this negatively affect the cash flow.
Loans needs to be applied for and negotiated
Retained profits may not be popular with shareholders as it could mean low or no
dividend payments for at least a year.

Advantages of Accounting

Maintenance of business records.

Preparation of financial statements.
Comparison of results.
Decision making.
Evidence in legal matters.
Provides information to related parties.
Helps in taxation matters.
Valuation of business.

Disadvantages of Accounting

Express Accounting information in terms of money.

Accounting information is based on estimates.
Accounting information may be biased.
Recording of fixed assets at the original cost.
Manipulation of accounts.
Money as a measurement unit changes in value.

Chapter 6: Marketing, Sales, and Customer Relation

Marketing - All activities a company does to promote and sell products or services
to consumers.

4Ps of Marketing

Product - an item or items the business plans to offer to customers

Price - how much the company will sell the product for
Place - the distribution of the product.
Promotion - integrated marketing communications campaign.

Types of Marketing Strategies

Traditional Marketing
Outdoor Marketing - This entails public displays of advertising external to a
consumer's house.
Print Marketing - This entails small, easily printed content that is easy to
replicate.
Direct Marketing - This entails specific content delivered to potential customers.
Some print marketing content could be mailed.
Electronic Marketing - This entails use of TV and radio for advertising.
Event Marketing - This entails attempting to gather potential customers at a
specific location for the opportunity to demonstrate the product

Digital Marketing

Search Engine Marketing - Companies can use search engines and SEO
techniques to increase search traffic by optimizing search results.
Email Marketing - Companies use e-mail to reach customers and distribute
messages, such as coupons, discounts, and upcoming sales.
Social Media Marketing - Companies can build an online presence on social
media platforms by using paid advertisements to bypass algorithms and access
content, or by organically growing by interacting with followers and uploading
videos.
Affiliate Marketing - Affiliate marketing is the use of third-party advertising to
drive customer interest through sales.
Content Marketing - This entails creating content, whether eBooks, infographics,
video seminars, or other downloadable content.

Marketing Technology - using technology and tools to plan and execute

marketing strategies that assist in achieving marketing objectives.

Web Analytics - a tool used by marketers to monitor and improve the

effectiveness of websites.

Social Media Management - tools used by marketers to schedule and post content
to social media channels, track reach, and monitor audience engagement.

Sale - A transaction between two or more parties that involves the exchange of
tangible or intangible goods, services, or assets for money.

Characteristics of Sales
  A sale takes place between two or more parties
 Sales involve a seller and buyer
 The goods and services are exchange for assets and money
 A sale is considered an agreement in the financial market. Here, the security
is delivered to the buyer against the agreed compensation.
 The sale involves the transfer of property from one party to another.
 Sale cannot exist without compensation.

Types of Sale

Inside Sales - they are selling from within their company. Organizations that use
an inside sales approach often tend to have leaner, more automated processes and
structured hours.
Outside Sales - Selling outside the company
B2B or Business-to-Business - Describes companies that sell products and
services to other businesses, instead of individual consumers
B2C Sales - Unlike B2B sales, B2C (or business-to-consumer) sales revolve
around transactions between a company and its individual consumers.
Ecommerce Sales - Is your customer able to research your product, determine
whether they want to buy it, and make their purchase online all without needing to
engage with someone from your company? If so, you’re following an eCommerce
or online sales model.
Direct Sales - individuals are able to sell directly to consumers outside of a
traditional retail environment. With this method, sellers conduct the sale one-on-
one with their customers, often earning a commission.

The Seven Steps Sales Process

Prospecting - you find potential customers and determine whether they have a
need for your product or service—and whether they can afford what you offer
Preparation - researching the market, and collecting all relevant information
regarding your product or service
Approach - Make first contact with your client.
Presentation - you actively demonstrate how your product or service meets the
needs of your potential customer
Handling Objections - This is where you listen to your prospect’s concerns and
address them.
Closing - you get the decision from the client to move forward.
Follow-up - keeps you in contact with customers you have closed, not only for
potential repeat business but for referrals as well.

Marketing vs Sales
Ways Marketing Sales
Marketing deals with understanding A sale is the transferring of
customers' requirements. As a result, ownership of a product from its
Meaning
when a product is manfactured, it gets manufacturer to the end
sold hassle-free. customer for money.
Customer-focused Product-focused
MAIN FOCUS
Needs of the market Needs of the company
EMPHASIS
Related to all activities which drives Related to flow of goods so the
SCOPE
the customers to buy the products ultimate customers.
Huge audience Small groups or individuals
TARGET

ACTIVITY IS Media Persons

DONE ON/BY
Research, advertisements, sales, after
Product is created to fullfil the
ACTIVITY sales service, customer satisfaction
needs of the customers.
and so on.

Similarities
The objective of Marketing and Sales is to boost the revenue of the company.

Both these approaches give effort to engage the audiences. They want to turn their
prospects into customers, thus accelerating the company’s sales.

Customer Relation - the company-wide process of nurturing positive relationships

with your customers

Importance of Customer Relations - Customer relations have always been at the

heart of successful businesses. A strong customer relations strategy underpins
sustainable growth.
Benefits of Positive Customer Relations

Customer Retention - When your customers know they'll have a positive

experience with your business, they will keep coming back to get your services and
products.
Customer Loyalty - Having positive relationships with your customers is a result
of a consistent satisfactory experience, which leads customers to favor one brand
over the others
Customer Acquisition - refers to bringing in new customers - or convincing
people to buy your products.
Customer Satisfaction - is a measure of how well a company's products, services,
and overall customer experience meet customer expectations.

Stakeholder Management - a project management process that consists in

managing the expectations and requirements of all the internal and external
stakeholders that are involved with a project.

Stakeholder - A stakeholder is a party that has an interest in a company and can

either affect or be affected by the business. The primary stakeholders in a typical
corporation are its investors, employees, customers, and suppliers.

Internal Stakeholder - Internal stakeholders are people whose interest in a

company comes through a direct relationship, such as employment, ownership, or
investment.
External Stakeholder - External stakeholders are those who do not directly work
with a company but are affected somehow by the actions and outcomes of the
business. Suppliers, creditors, and public groups are all considered external
stakeholders.

Stakeholder Management Plan - Stakeholder management plan is a written

document that outlines how your team plans to manage the goals and expectations
of key stakeholders during the project lifecycle.

Steps in Developing a Stakeholder Management Plan

Identify Stakeholders - The first step to any good stakeholder management plan is
proper stakeholder identification. Identify who are the key individual stakeholders
and stakeholder groups to your project or business.
Interview your Stakeholders - Note which key stakeholders are going to have a
bigger influence over the project, and at which stage their influence becomes lesser
or greater.
Prioritize Stakeholders - Working with new stakeholders can be tricky at the
start. Knowing your stakeholders is key to effective stakeholder relationship
management.
Set & Manage Expectations - Clearly identify which stages each key stakeholder
will be involved in, and timelines by which their feedback is needed.

CHAPTER 7: Management of the Business

Business Management – responsible for planning, organizing, directing, and

controlling resources to meet policy objectives.

Management Process

Planning – determine goals and actions to achieve them

Organizing – arranging resources and activities to accomplish goals
Leading – inspiring and directing employees to achieve goals
Controlling – monitoring performances and making adjustments to ensure goals
are achieved

MANAGERS MUST HAVE SKILLS

A manager who fosters good management skills is able to propel the company's
mission and vision or business goals forward with fewer hurdles and objections
from internal and external sources. managers need to be skilled in a range of areas,
including:
Organizational Design – structuring the organization and assigning
responsibilities to achieve efficient and effective operations
Strategic Planning - setting goals, developing a plan of action, and allocating
resources to achieve those goals.
Human Resource Management - attracting, selecting, developing, and retaining
employees who are able to achieve the organization's goals.
Financial Management - managing financial resources to ensure the
organization's financial stability and growth.
Marketing and Sales Management - developing and implementing strategies to
attract and retain customers.
Operations Management - managing the organization's day-to-day activities to
ensure that products and services are delivered efficiently and effectively.
Risk Management - identifying and managing risks that could impact the
organization's success.

Financier - a finance professional who oversees the large monetary amounts for an
organization or government agency.

Main Roles and Responsibilities of a Financier

 Providing financing and capital to businesses.

 Evaluating business plans and financial projections.
 Monitoring and advising businesses.
 Structuring financial deals.
 Sourcing further capital.
 Exiting investments.
 Managing risk.
 Networking

Community in Business Management - a community refers to a group of

individuals who share common interests, needs, or goals that are relevant to the
business. These individuals may include employees, customers, suppliers, and
other stakeholders who are connected to the business in some way.

Global Opportunities for Entrepreneur

Entrepreneurs may take advantage of the global market and connect with clients,
partners, and investors from all over the world with the correct mentality, tools,
and strategy. In this conversation, we'll look at the many international options that
are open to business owners and talk about the tactics that can help them compete
successfully on the world stage.

E-commerce - With the rise of the internet and online shopping, e-commerce has
become a popular way for entrepreneurs to sell their products and services
globally. You can easily set up an online store and reach customers from all over
the world.
International trade - Importing and exporting goods and services can be a
lucrative opportunity for entrepreneurs. You can leverage your expertise in a
particular area and find markets that have a high demand for your product or
service.

Franchising - If you have a successful business model, you can consider

franchising it to other entrepreneurs around the world. This can help you expand
your business globally without taking on all the risk yourself.

Outsourcing - Many businesses outsource their operations to countries where

labor costs are lower. As an entrepreneur, you can take advantage of this trend by
offering outsourcing services to businesses in need.

Global consulting - If you have specialized knowledge or expertise in a particular

area, you can offer consulting services to businesses around the world. This can be
a great way to leverage your skills and help others succeed.