CAPITAL as an investment portfolio. Capital can also refer

CAPITAL GENERATION AND REVENUE
MANAGEMENT

 

What
is Capital ?

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Capital includes all goods that are
made or created by humans and used for producing goods or services. Capital
can include physical assets, such as a production plant, or financial assets,
such as an investment portfolio. Capital can also refer to money
invested in a business to purchase assets (Wikipedia).

 

Capital
can also refer to financial resources or assets owned by any business that are
useful in starting and ensuring development, continuity generating income for a
business. (Collins dictionary)

 

capital
is also any economic resource measured in terms of money used by business
owners (entrepreneurs) and businesses to buy what they need to manufacture
their products or to provide their services in order to make a customer and a
desired profit.

 

What
then is Capital Generation ?

Capital
generation has to do with the various organized activities of raising funds to
start and run a business. Capital can be generated in various ways.

 

Capital
for business can be raised in different ways and the fist way starts with the
entrepreneur (the business owner) if a business owner is not serious enough or
willing to invest in himself, he pushes others away from investing in his
business or helping him. But if the entrepreneur is serious, he opens doors for
himself by catching the eye of big investors because, it’ll be clear that that
investor is fully committed to his plan/ project.

Many
entrepreneurs who are very successful today have taken allot of risks which
also included putting almost all their savings into their small or little
businesses.

 

Most
times, it is better to wait and start a business when an entrepreneur has at
least a small portion of the capital to invest. Raising the first/ immediate
funds can be very hard and whoever is lending out money, has too see a future
in that business through the proposed business plan.

 

Below
are some of the ways capital can be raised for a business :

 

Self/ small savings

This
kind of savings has to do with having a projected vision of the business an
entrepreneur is about to go into. It involves saving money gotten from what the
entrepreneur gets as his income. It is hard or almost impossible to find when
an infant entrepreneur will start a business without investing a single amount
of money into the venture or business. This money must not be too big but must
be reasonably enough to startup and maintain the infant business/ industry.

 

 

Local money lenders and Banks Small loans from local
lenders (banks) can bring amazingly good terms and interest rates. This
may depend on your credit rating and the type of collateral you can
provide. This is when a Solid business plan is needful. From a local point
of view, this is the best way of getting capital. In addition, securing
this loan helps investors see that your company is a real company.

 

 

Crowdfunding

Crowdfunding
is the practice of funding a project or venture by raising many small amounts
of money from a large number of people, typically via the Internet.
Crowdfunding is a form of crowdsourcing and of alternative finance (Wikipedia)

 

If
an entrepreneur does not qualify for a small business loan, he can take
crowdfunding for an option. The entrepreneur can make his findings and choose a
company with good reputation and rate of success. This is a less local/
traditional way, but it works well for many people in the same position. The
entrepreneur should just carefully look at the terms, conditions and rates and
also, get a lawyer for legal backing if need be.

 

Friends and Family

So
many business people shy away from this part, but’s its a very good option. It
may sound like the entrepreneur is begging or putting his loved ones in a tight
corner. If a fantastic and solid business plan is presented and they are taken
as potential investors, it will go well even if the entrepreneur is turned
down. It may be surprising that someone who is interested in supporting the
entrepreneurs dreams will be found and willing to invest.

 

 

Venture capital

Venture
capital can be said to be funds brought by corporate investors to a business
with a view of potential and long term growth.

 

The
great side and advantage of venture capital is that the amount of money funded
is usually much. If an entrepreneur should manage and get/ raise venture
capital, it will come with market lending support and high profiled teams to help
push the process of funding and add greater ideas to the writers en down goals
and plans of that reposed business. Although, venture capital is hardly
accessible to proposed businesses that will not be able to generate high
revenue/ income. The fact is that venture capital is meant for companies that
are very big and will have a high and large amount of revenue generation.

 

After
looking at the way capital is raised for a business, we now go down to the
various ways revenue is managed when running the business because, one thing is
to raise the capital, and another thing is to manage the money raised from that
business effectively to bring productive output and foster growth and
development.

First
of all, what is ‘revenue’ ?

 

Revenue
is the income that a business has from its normal business activities, usually
from the sale of goods and services to customers. Revenue is also referred to
as sales or turnover. (Wikipedia)

 

Revenue
can also be said to be the income a company or a country receives regularly.
(Cambridge dictionary)

 

Revenue
can also be defined as the money generated from a business as the income
generated from providing a particular good or service.

 

What
then is revenue management ?

Revenue
management has to do with the various ways money earned from a business is
controlled and used efficiently to being about further growth to the business.

The
following are the ways by which revenue can be managed in a business:

 

Increase of sales

Though
the huge profit a business may be making, it is very important to increase the
sales rate of a business. This will help the entrepreneur to meet up with so
many expenses that his business will incur as the business goes on. It is
therefore the responsibility of the entrepreneur to make sure he makes enough
sales and maximizes as much profit as he can.

 

 2.
Cutting down unnecessary waste

 

Cutting
down unnecessary waste helps manage the revenue and income of a business. When
unnecessary waste is cut down, money is saved and used fir better productive
things to make a business grow. Cutting down of unnecessary waste should
include managing costs incurred in business especially at the point of
rendering certain services. Waste can be cut down in a business through
different ways. One of the most effective ways is through ‘kizen’ (a strategy
setup by the japanese to reduce unnecessary waste.

 

5. By reviewing profit and analyzing

It
is very important that every business owner goes back to his records and looks
at his profit. After looking at his profit, it is very important to make good
analysis and know if the business has a potential to grow and expand. This will
be of help when it comes to critical planning for business activities that will
foster development and maximize profits for a business. For all these
strategies to be successful, there should be professional management and good
leadership put in place. Proper management is the base for all businesses that
stand even when faced with big challenges that can make them bankrupt and
crash. If an entrepreneur really wants to maximize profit and still be in
business, he needs to put professional strategies in place.