Entrepreneurship Development

ENTREPRENEURSHIP DEVELOPMENT FOR RURAL FAMILIES 4(1+3)

Lesson 5 : Process of Initiating an Enterprise

Financial Planning

An enterprise cannot be started and run without sufficient amount of capital. Capital is required to buy fixed assets like land, building, machines and equipment. Capital is also required to buy raw material and meet day to day expenses of the business like wages, electricity charges, etc. Decision has to be taken in advance regarding the amount of capital required for various purposes and regarding the sources of acquiring it, what amount is to be contributed by the owners and the amount to be borrowed from financial institutions, banks, etc.

The capital required for an enterprise is of two types

1. Fixed capital
2. Working Capital