Assignment 2 New Venture

1538 Words Dec 5th, 2011 7 Pages
1. Discuss the future outlook and industry trends related to the new venture.
Natural ethnic hair care products and organic hair care products are fast becoming a staple in the cosmetics industry. Each year more and more consumers switch from the chemical-laden hair care products to products that use natural and organically grown ingredients. Now these particular products are no longer only available in organic food stores. They have now hit the retail level. Mass retailers such as Target dedicating more shelf space to ethnic organic beauty products and offering more premium options traditionally sold only through specialty outlets, including Miss Jessie's Curls and the Jane Carter Solution line. (Morris, June 2011, pg. 30)
This
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(Carter, April 2011, pg. 46)
In order to raise capital for the venture, I would first need to determine what funds are available, which ones who be best for the venture, and how I would go about obtaining those funds for the venture. Carter explains that there are two key issues or factors that come into play when determining which kind of capital is the best for a new venture: (a) Usually the search for financing is precipitated by a rejection of an existing bank relationship, and (b) understanding why the company needs capital will determine what type of financing is most appropriate. (Carter, April 2011, pg. 47)
For the venture that I am pursuing, Government Funding through the Small Business Administration Loans/Small Business Investment Companies Business Development Corporations could be feasible. There are many firms that not only survived but are growing dramatically using these programs. (Carter, April 2011, pg. 46) Also, Equipment Leasing provides equipment loans and leases for companies that are having a difficult time raising capital with tight liquidity. Nations Equipment Finance (NEF) will finance up to 100 percent of the purchase price of equipment for terms as long as seven years and look for returns in excess of 10 percent through the company, founded by ex-GE