IGCSE, A Level Business Student Forum

Q11. Explain one way in which an entrepreneur could overcome the barrier of having no savings to invest [3]

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Possible Structure:
[KN]
[AN]
[AN+]

KN: Entrepreneurs can explore various loan options specifically designed for small businesses. These may include loans from traditional banks, lenders etc.
AN: Loans provide access to much-needed capital, allowing businesses to cover operational expenses and invest in growth
AN+: This will help in managing the cash flow of business and filling the gaps in between ensuring that the business has the necessaties to meet its ongoing financial obligations and avoid disruptions.

I DONT KNOW OF ANY OTHER WAYS FOR ENTREPRENEURS TO OVERCOME THE BARRIERS OF HAVING NO SAVINGS

[KN] taking a loan from the bank
[AN] the entrepreneur can invest that amount in the business in order to increase its productivity and efficiency
[AN+] therefore, it would lead to increased profits hence the loan amount can be repaid to the bank

[KN] Entrepreneur can create a detailed business plan.
[AN] This will help him to attract investors to invest in the business.
[AN+] It will also make it easy for him to take loan from bank as it requires a good business plan.

[KN] An entrepreneur may overcome the barrier of having no savings to invest by creating a good business plan. [AN] A well structured business plan that clearly identifies the purpose of business activity, it's operations and strategies convinces investors such as banks to provide finance to the business. [AN+] As a result, the business is likely to benefit as the entrepreneur may be able to increase innovation and feel motivated to bring out new and better ideas for the business without having to worry about savings for investment.

Kn: start with what you have your skills , experience and knowledge
An: without investment this will create a base for the business and by being flexible by not being fixated on a single goal but exploring various opportunities
An+ this can attract some potential shareholder thus leading to investments in the business

(Kn) present oppurtunities for investment
(An) an entrepreneur could draw up a detailed business plan and lay out the potential of the business to an investor in exchange for something for e.g a percentage of profits.
(An+) this ensures that the entrepreneur is able to gather funds but at the same time establishes that while the investor may gain from business activity they may not have a say in its running.

[KN] The easiest way an entrepreneur can overcome the barrier of no savings to invest is by taking small loans (By the government or other
banks with good packages and easy loan return policies).
[AN] By taking small loans the entrepreneur will be at least able to start the business and even help it to run for some short period of time.
So the business will generate some profits.
[AN+] As the business be able to generate the profit after some time it will be able to return the loans taken.

( another way can be that the entrepreneur could look forward towards the idea of partnership )

[KN] Business could get finance by bank as they provide loan
[AN] as the business could return the loan when profit is generated
[AN+] however business will may face loss when the loan isnt paid on the decided date

[KN]: Entrepreneur can access loans from banks, and if it's a small business, they can access microfinance.
[AN]: The loans would give an access to capital and he would be able to spend on day-to-day expenses of the business.
[AN+]: This would ensure that the business is functioning smoothly and is stable.

[KN]By exploring a wide range of partnerships and collaborations.
[AN]Forming alliances with other businesses or individuals with complementary resources or skills who are willing to invest and support the business can fill the gap of having no savings to invest.
[AN+]This can also help in getting to know your competitors and fellow entrepreneurs.

(Kn) other various options to rasie finance like selling shares.
(An) business could raise finance by selling their shares in open market to generate the needed finance.
(An+) help business in times of financial crisis hence, reduces the risk of business failure in the market.