Assignments: Financing Entrepreneurship
Assignment 1: Your Business Venture
You are stepping into the world of becoming an entrepreneur. For this assignment, and the next three (3), pick an industry and a business you would like to own. This business must require the purchase of new or used equipment as an essential part of running the business (e.g., machine tooling, commercial stove top, dry-cleaning equipment, or commercial printing equipment).
Write a one page paper in which you:
1. Describe the industry and the type of business you plan to start. Provide specific details, such as the location, type of customers, and closest or main competition.
2. State why this type of business interests you.
3. Indicate why you believe this business could be successful. Provide support for your rationale.
The specific course learning outcomes associated with this assignment are:
• Use technology and information resources to research issues in financing entrepreneurships.
• Write clearly and concisely about financing entrepreneurships using proper writing mechanics
Assignment 2: The Basics of a Start-Up
This assignment investigates the financial needs of your business venture from Assignment 1.
Write a three to four page paper in which you:
1. Outline the financial start-up needs for this business. Consider such items as cash, equipment, space lease or purchase, raw materials, labor costs, etc. Provide a rationale for your estimates. (This is only a preliminary list. As you progress in the course, this outline will be fine-tuned.)
2. Once you have estimated the start-up needs for this business, determine the best financing options to obtain the needed capital and how you would approach securing this type of financing. Justify your selection.
3. Evaluate the two most important financial ratios that you will use to track the health of the business and explain how each would provide insight to the business performance. Provide a rationale with your response.
The specific course learning outcomes associated with this assignment are:
• Apply the fundamentals of entrepreneurial financing.
• Analyze the financial planning needs of various businesses.
• Perform fundamental analysis of a business.
• Use technology and information resources to research issues in financing entrepreneurships.
• Write clearly and concisely about financing entrepreneurships using proper writing mechanics.
Assignment 3: More of the Basics and Beyond
Using the same business you started in Assignment 1, you will continue to build a financial plan for the business.
Write a four to five page paper in which you:
1. Prepare a pro forma balance sheet for the first twelve months of your business. Include the assumptions on which it is based. Justify your balance sheet.
2. Prepare a pro forma income statement for the first twelve months of your business. Include the assumptions on which it is based. Justify your income statement.
3. Prepare a pro forma cash budget for the first twelve months of your business. Include the assumptions that you have made when creating the budget. Justify your budget.
4. Scrutinize the costs (both tangible and intangible costs) of obtaining financial capital for your business start-up to determine whether the costs justify implementation of the funding source.
Your business is five years old and running profitably. You are now ready to look outward five more years to take the business to the next level.
1. Determine the specific details that would make the equity approach to valuing your business worthwhile. Provide a rationale with your response.
The specific course learning outcomes associated with this assignment are:
• Apply the fundamentals of entrepreneurial financing.
• Perform fundamental analysis of a business.
• Examine the equity approach to valuing a new venture.
• Use technology and information resources to research issues in financing entrepreneurships.
• Write clearly and concisely about financing entrepreneurships using proper writing mechanics.
Assignment 4: Financing an Expansion
After twelve years, your business is wildly successful with multiple locations throughout the region. You are now ready to think really big. You want to purchase a huge competitor. (Note: You determine whether the competitor is a privately or publicly held company.) To expand, you will need additional capital from the debt or equity market, or both.
Write a five to seven page paper in which you:
1. Use one of the valuation techniques identified in Chapters 10 and 11 to calculate the value of the competitor you wish to purchase. Note: You will have to make assumptions; however, your assumptions need to be rationally supported.
2. Analyze the various financial tools available to you to determine the tools that will be most helpful in assessing whether your company can afford to purchase the competitor. Support your response.
Imagine you can indeed afford to purchase the competitor; however, you will need an additional $100 million.
3. Examine the options available to you to finance the competitor through the debt market, recommending the best alternative as a result of your analysis. Provide support for your recommendation.
4. Examine the options available to you to finance the competitor through the equity market, recommending the best alternative as a result of your analysis. Provide support for your recommendation.
5. Conduct a cross comparison of your debt and equity examinations to determine where to ideally obtain the additional $100 million funding needed to make the purchase and the approach that you would take to securing the funds. Provide support for your recommendation.
The specific course learning outcomes associated with this assignment are:
• Apply the fundamentals of entrepreneurial financing.
• Examine the equity approach to valuing a new venture.
• Analyze the venture capital process.
• Compare and contrast different types of entrepreneurial financing.
• Examine and discuss security structures.
• Use technology and information resources to research issues in financing entrepreneurships.
• Write clearly and concisely about financing entrepreneurships using proper writing mechanics.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.