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Corporate Activities’ Budget

How to financially sponsor corporate activities

There are many options to sponsor your activities’ corporate, include sponsor amounts, loans and present budget. It is difficult to have a good choice; you can see some problems before making decision:

Clearly identify that how much you need

  • How much you have to invest?
  • Where is your place and how much of operation cost monthly? In case of putting your workplace at home, there are still some expenses like power, water…
  • What equipment do you buy and how much?
  • Do you storage your goods and how much?
  • How many employees do you need? Calculate salaries including bonus and incentive
  • Do you need a car to do transporting? What do rental and delivery cost?
  • How much for the accounting, legal or advertisement?

Use your own budget?

  • Think about what you do to save money, especially additional money you need
  • Keep another job while testing a new business idea which guarantee the start-up income

Government financing

  • Some government financing and support programs use for businesses

Loans and equity

  • Bank loans
  • Release bonds: An amount of money of investors buying your company’s bond.
   Loans  Bonds
 Strengths
  •  Loan repayments are tax deductible
  • You fully own your business and profit
  •  The investors share risks with the owner, therefore, if you fail, there is no need to repay the capital.
  • No need to pay for interests, but you have to give the investor an amount of profit – maybe more than the interest.
 Weaknesses
  •  Have to pay the interest
  • Have to repay the loans
  • Provide the solution to guarantee for your loans
  •  Have to share your ownership; if you success, it will be shared for other
  • You can be lost your control in company
  • Investors can join in making decision and receive a part of profit annually

Option 1: Bank loans

Make sure that you choose your suitable loans that meet your need of business

Short-term loans for daily budget and medium-and-long-term loans for property purchases.

For example:

You need  Choice
 Increase cash flow or need more money in short-term
  •  Business Credit cards 
  • Guarantee
  • Overdraft 
 Long-term business development
  •  Supplement capital loans 
  • Loans for production and business in installment for SMEs
 Car and property purchases
 
  • Car loans
  • Project investment loans 

Option 2: Bonds

Shareholders:

Find the suitable shareholders

Find people who have targets and suitable wish. Include:

Family & Friend
  •  Some owners get support from family and friends. For relatives, you will broaden your terms rather than the outsider, this is not for weak-psychological people
  • You have to reveal some business details with your closed member, and if something wrong and they lost their investment, it can kill your relationships
 
 Business partnership
  •  You need to be confident to satisfy partners in a long time. A cooperative agreement specifically identifies how to deal with the argument and what happens if someone leaves the business.
 Individual investors
  •  This is some rich individuals who find fast-developed companies to invest in. With experience, they can be valuable consultants
  • These investors like supporting fast-developed companies, therefore, you need to prove your potentials
 Venture capital funds
  •  Venture capital fund investor who is a professional investor putting their money in some potential companies and support their development until they are listed in stock exchange. They gain money by selling their bonds internal or external.
  • An equity trader will typically divest your business in 3-5 years at a rate of return 35% per year or more
 

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