Ella has just left college and wants to start up her own business. She has designed a new bicycle light with a safety feature not found in any rival products. Ella knows obtaining finance will be difficult. She plans to have the lights produced in another country. Each light will cost $8 to produce. Ella cannot decide whether to use price skimming. She said: ‘I have received orders for 300 lights and I have not even started promoting them’. Ella wants to be a successful entrepreneur.
- ELLA EXTRACT.JPG (29.43 KiB) Viewed 151 times
08 Identify and explain two reasons why obtaining finance might be difficult for Ella’s business. [4]
Possible KN Points:
• No business experience
• Seen as higher risk OR don’t trust her OR can’t repay
• Can offer no security
• May not have a business plan OR documentation to support request for finance
• Unproven product