Why Smes Sometimes Face Difficulties In Raising Finance Finance Essay

Why Smes Sometimes Face Difficulties In Raising Finance Finance Essay Due to the establish of modern enterprise system and thoroughly in structural reforms of market economy, there are lot of opportunities contained in the market, but it is also existing many unexpected risks, particularly for the small to medium-sized enterprise (SMEs) which has limited resources to resist in this treacherous environment. To survive and adapts to the environment for a SME is to maintain its advantage in meticulous daily management and even more important is to have a long-term view strategic thinking especially in financial strategy. A good finance strategy can help SME to set up and expand their operations, development and also investment (OECD, 2006), further to get funds which make them competitively and can get well results they desired (Park, 2010). Making a finance strategy is very significant to a company; company has to consider both of internal condition and external environment problem and even more factors which are related to company. However, the SME has its particular characteristic, it is not suitable to adopt the same action with a large company; they better to create a strategy which fits to the company according to its demand. Finding a proper financial strategy for a developing SME, not only can help SME to reinforce its essence, the more important is the sustainability of its development. Define company There is no accurate definition for small to medium-sized enterprise (SMEs) and most of countries define it according to specific condition by their way. Nevertheless, there are some particular characteristics (Bank of England, 2001 Brookfield, 2001) about SMEs and they are: The enterprises are not quoted Ownership is often connected between family and shareholder and the business is typically restricted to few individuals. Most of SMEs are small groups business and always achieve self-employment effectively. In the past, the definition for SMEs from European Commission was unequivocal, it was defined by individual country, for instance, Germany regulated the amount of employee under 250 was part of SME, but in Belgium, the number was became 100. However, in the recent years, the data from European Commission shows that the definition has adjusted and is qualified as a SME by some criteria (see figure 1-1) (European Commission, 2010) in headcount, turnover and balance sheet total. definition of SME.JPG Figure 1-1 the definition of a small firm from European Commission Importance of finance Nowadays, the enterprises finance is facing a dynamic, diversification and complicated managing environment. Managing finance is not only to provide a specific method or device for a firm; it is to assimilate the principle and manner from strategic management. Start from the view of adapting to the environment and using the vantage, to pay much attention in financial long-term problem and strategic problem. In the situation of lacking of the resources for SME, to create a suitable financial strategic and well dominate the limited resource is significant since a better financial systems can help to improve the probability of successful innovation and bring accelerate economic growth. (King, et al., 1993) The focus of enterprises financial strategy is the basic path on future development, goal and goal accomplishment for the financial action; this is the difference between financial strategy and other strategies. The master objective of enterprises financial strategy is reasonably to assemble, dominate and use its resources, tend to balance and flow enterprises capital, also to build the core competitive strength and to achieve the maximization of enterprise value in the end. Some aspects of this goal are related/ connected to each other; from the view of a long-term performance, to seek the enterprises sustainability growth in financial resource and capability, and furthermore to accomplish the rising of enterprises capital value and make enterprises financial capability can sustained, quick and healthily increase, conduce to maintain and develop enterprises competitive advantage. While enterprise building the core competitive strength for their strategic management, they need the support from financial management. The financial management which treats capital management as a significant content, it needs to express the requirement for enterprises strategy and to guarantee its practice. The value of practicing the financial strategy is to retain a health condition in enterprises finance and also effectively in controlling the financial risk. There are twelve types of financing and growth in SMEs and it can be very usefully and provided a great help if it is supplied properly according to SMEs particular requirement (Brookfield, 2001). Initial owner financing (Equity finance) Business angel financing Trade credit Leasing Factoring Venture capital Short-term bank loans (Debt finance) Medium term bank loans Mezzanine finance Private placements Public equity Public debt A company should manage its financing structure in a way that its debt and equity are in balanced manner. This fact helps company to avoid insolvency. Excess of either debt or finance could result in loss of wealth. I will be explaining some of the important methods of financing in following section. Equity finance Equity financing is that the shareholder sells the part of corporate control to introduce the new shareholder by raising the capital (Watson, et al., 2007). The enterprise does not need to pay the interest on principal if the capital is received from equity financing and the new shareholder can share the profit from enterprise as well. Equity financing includes stock issuance, allotment and debt for equity swap. Some features of equity financing, are: Stock equity is firms first right of its property, it is the base for enterprise to absorb the civil liability and to responsibility for firms own profits and losses; furthermore, it is also the base for investor to control the enterprise and to distribute the profit. Equity financing is the base of deciding an enterprise to the outward debt. Certainly, there are some advantages of equity financing that help enterprise in investment and management. Equity financing builds a good system in corporate governance structure, which consists of shareholders meeting, board of directors, Board of supervisors and executives. It is effectively in decreasing the risk of management. In the modern finance theory, stock market is also called open market; it means that the standardization financial products are dealing in a trading area with an extensively institutionalization. It has its criterion and processes it in the condition of information revelation and fare dealing. In financial translation, the more important is publicity and availability of information; and that is why the stock market is better than loan market in both competitiveness of capital price and publicity of information. Venture capital Venture capital is the fund which is collected by private placement and set as the type of organization; invest to unlisted small and medium-sized newly emerging enterprises and in the capital type of both high risk and high reciprocation. Venture capital is different from mutual fund, unit trust and securities investment fund; it has its features in operating of investment and collection, such as, Venture capital absorbs the venture with enterprise; the venture capitalist needs to cooperate closely with entrepreneur and help the firm to make a plan. Management is part of investment. Venture capital is an investment in long-term and poor flowability; venture capitalist and entrepreneur become a common destiny once they invest. Venture capital is high risk and requires the venture capitalist with specialized skill, and need to achieve specialization and programmed in choosing the project, tend to avoid the risk. Before inspect the financial index, the venture capitalist pays more attention in market prospect, development strategy and managing quality. Sharing the bonus from enterprise is not the purpose of venture capital, they make it as a return by increasing the capital when they are exiting; the time for exiting is always when go on public or sell it. Debt finance Debt financing is also called bond financing, it is the way which the firm can raise money for enterprises external finance; and debt can also be conducted and fitted to the requirement of issuing companies and investors (Watson, et al., 2007). It is included long-term bank loans, short-term financing (such as bills, debt receivable, and letter of credit), enterprise Bond and short-term financial bonds, also long-term bond financing, finance lease, discount government loans, government loan, Loans from international financial organizations and private bond fund. The first expense enterprise needs to pay is the interest of capital which receives from debt financing and the principal on the debt will be paid to creditor at maturity (Davis, et al., 1994). The feature of purpose for debt financing is to solve the problem of deficiency in working capital rather than the expenditure under the capital account. Debt financing can be described by two features, The received capital from debt financing is only for using, it is not the property of the enterprise, and the firm needs to pay interest and the principal is repayable. Compare to equity financing, except some specific situations that debt financing may bring creditor the problem of intervention or controlling, otherwise it is barely to have the problem of corporate control. However, debt financing has its advantage for helping the firm in investment and management, The lenders have ability to collect and analyze the states of investment, also can have long-term investigate and oversee the enterprise to avoid the moral hazard. The function of the creditors right is when firm can pay off the debt, the firm will hold the corporate control, whereas of the enterprise cannot offer the debt, the corporate control will be turned to lender. Why do SMEs find financing a problem? Due to SMEs small size capital, the capability for defending the market risk is not as strong as a large firm, plus a faulty finance system, it causes the problem into SMEs finance management (Pissarides, 1999). The main reasons and problem are: No criterion in SMEs finance accounting system In application of finance system in SME exist some problems, which make loose financial control. A loose inventory control can lead to the stagnation of capital and excessive final inventory; the capital of final inventory always in a high proportion if compare to sale revenue. The firm usually loses a large number of assets due to focus on capital much more than assets and even wastes it seriously; moreover, to control the finished products, semi-manufactured goods and low-value expendable without a faultless system. It is negligent in managing the cash and weakness in debt receivable Some of enterprises think that it is good to hold cash (including bank deposit), and better to have more; the proportion of reserve is too high, it makes lot of capital cannot really run in operation, and also causes the capital idleness. In addition, some firms invest too much in real estate and lead to finance difficulty due to could not handle the emergent need of management. Also deficiency in managing working capital creates problems problem capital withdrawal. Difficulty in funding, the capital is insufficient It is not easy to run the SME in a practically environment, especially the unequal treatment in funding between SME and larger enterprise. The banks are not willing to loan to them, particularly the difficulty in guarantee and lack of the specialized agency to offer the assurance service is still the main problem for SME and it obviously happens in some huge investments. Unrestraint in investment The SME is lacking of the ability to analyze the investment accurately and to evaluate the effectiveness of operating the capital. The majority of investment in SME is from banking, due to the respectability of a SME is not as high as a large company, it is an obstacle in attracting the banking to invest or loan to the SME. The mode of management is backward Most of SME is running the business as a family workshop; they are operation the management in a backward way and an old-fashioned thinking way, do not understand and even not willing to understand or learn the modern financial management. The proprietor always treats the enterprise as an extension of familys property; in order to control the business entirely without decentralize the ownership, it causes the lost of the opportunities in growing. Conclusion SMEs play an important role in the general macroeconomic environment, and provide the enormous opportunities for employment. However, due to the small size and limited source, usually SMEs has to face to the challenge in financing problem. For solving the problem, the major impact is from government and the law (Industrial Systems Research). In existing policy has to be adjusted by government; the government needs to reinforce the related law and regulation to implement SMEs development strategy and preferential clause. Furthermore, have to set up the institution for managing and supporting SMEs development. To increase the method for financing; SMEs need to respect the debt from bank and to pay back the debt on time; then to healthy the internal system and raise the handling of material. Lastly, to improve accountants structure and criterion of financial management; enhance the punishment for the illegality to makes they pay attention in financial system.

Travel Writing: Romantics to Newspaper :: Analysis Literature Traveling Essays Papers

Travel Writing: Romantics to Newspaper After reading various works from Romantic travel writers such as Gilpin, Wordsworth, Goethe and others, I was interested in how their writings' conventions have changed when a different medium is used. Every Saturday the local newspaper, The Edmonton Journal, has a section that is strictly dedicated to travel destinations and topics pertaining to travel. Appropriately named "Travel," this section describes exotic locations for tourist and travelers. Its articles contrast the Romantics' description of the environment by having less emphasis on the picturesque and sublime, more focus on historical background, and greater detail in the lives of people living there. I believe that these differences are credited largely to one factor; the writing's medium influences what is being stressed as the purpose of the writer is different. Travel articles focus largely on describing nature only in terms of basic description. When referencing a scene with specific characteristics (such as cliffs, waterfalls or mountains) the Romantic writer describes the scene as if the reader has very little experience or expectation for what the scene should look like. The result is often elaborate description after elaborate description. Newspaper travel sections do not concern themselves with such sensory description near the same extent for a number of reasons. The newspaper focuses less on creating imagery for the reader because of the increase in availability to travel, images of the picturesque and sublime on television and movies, and the presence of photographs physically next to the text. 1. Nearly every article, within this section, is accompanied by a large photograph showing the landscape. By presenting the writers' description of the land next to the photograph, the article intrinsically promotes a comparison by the reader, contrasting the colourful photograph with the writer's words. If the photograph presents a landscape different from the vivid description of the travel writer (which inevitably happens with readers' mental constructs) the reader will find it hard to trust the writer in the accuracy of description. The writer wisely follows the saying that a "picture says a thousand words" and is better off letting the picture do the talking. After all, the journalist has less space and more constrictions than the novelist does. 2. The dominant concern for the travel journalist is conveying what they want in a limited space. The journalist does not have space to elaborately describe every cliff, river or valley. It is, therefore, up to the writer to assume that, with the addition of the given photographs, the reader would be able to visualize a serene waterfall or placid lake.

Effects of Job Rotation

Discuss the various issues of managerial behaviour and related matters raised by this case study Laurie J. Mullins argues that A fist step in the effective management of other people is confidence in your own ability, and awareness of your own strengths and weaknesses. Why is it then that managers find it difficult to admit their mistakes, to say sorry or to laugh at themselves? 1 In the building society case study, there are examples of bad managerial behaviour on the part of both Mary Rodgers, the branch manager and Jane Taylor, the senior branch assistant.Jane Taylor was clearly good at her job if, after four years, she was promoted to this new role, yet within a short period of time, she was having trouble with Tony Jackson. Looking back at what Mullins said, Miss Taylor doesn't appear to have confidence in her own ability or indeed awareness in her own strengths and weaknesses. According to Thompson ; McHugh â€Å"control is not an end in itself, but a means to transform the ca pacity to work established by the wage relation into profitable production†, and Jane is unable to control her sub-ordinate – what are the reasons for this?Part of the problem stems from the beginning of the case study and the relationship between Jane and her manager. Mary Rogers does not instil any confidence in Jane when she effectively ‘dumps' this new role. Up until now, Jane has been performing specific task functions and has no real knowledge of how to manage people as she has previously been performing the duties of a cashier and looking after mortgage advice accounts – more task orientated skills rather than managerial ones. The refresher course she attends includes nothing on this either and Jane immediately falls into what McGregor calls the ‘Theory X' assumption of human nature.The central principle of ‘Theory X' is direction and control through a centralised system of organisation and exercise of authority2 and Jane automatically tr ies to coerce and direct Tony Jackson. The inability of Mary Rodgers to provide effective support and development for Jane shows a clear ineptitude on her part. She admits herself that the reason for Jane's promotion is that â€Å"I [Mary] need someone to take some of the weight off my shoulders† and she seems to be reluctant to help intervene and solve

Philosophical And Sociocultural Influences On Educational...

This history or education is robust in the number of philosophical and sociocultural influences on educational theory and practice. According to the Taking Sides text for ED833, â€Å"Historically, organized education has been initiated and instated to serve many purposes – spiritual salvation, political socialization, moral uplift, societal stability, social mobility, mental discipline, vocational efficiency, and social reform, among others.† The changes that result in education stem from the ever growing and shifting needs of students and society. Furthermore, political demands, sociocultural differences, community expectations, parental authority, and professional difficulties cause contending educational theories and ideals. With the numerous differing philosophies, internal and external influences, and historical effects, education must bend and mold to fit its purpose. The idealist tradition, which dominated much of the philosophical and educational thought until the 1700 and 1800s, separates the material world from the spiritual and mental world. Socrates and Plato laid the foundation for Western philosophy and science. Plato believed talent and intelligence was could be found in children from all caste systems. Unlike Socrates’ emphasis on questioning, Aristotle continued developing scientific thought and investigation. Aristotle’s realism period focused on ethics, rhetoric, natural science, and psychology. Furthermore, he aimed for education to produce good andShow MoreRelatedThe Philosophical And Sociocultural Influences On Educational Theory And Practice958 Words   |  4 PagesThis history of education is robust in the number of philosophical and sociocultural influences on educational theory and practice. According to the Taking Sides text for ED833, â€Å"Historically, organized education has been initiated and instated to serve many purposes – spiritual salvation, political socialization, moral uplift, societal stability, social mobility, mental discipline, vocational efficiency, and social reform, among others.† The changes that take place in education are a directlyRead MoreThe Theory Of Social Development798 Words   |  4 Pagescoursework and experience in generating interest and helping them to achieve the success by formulating the best possible programs for their educational development. Lev S. Vygotsky (1896 – 1934), His work focused on learning and cognitive development in children; he developed the theory of social development; his work become the foundation of much research and theory in cognitive development over the past several decades. He believed that each student operates within a range of ability and that educatorsRead MoreFeminism: Womens Status in Higher Education1448 Words   |  6 Pagesrecognizably just society is significantly undermined† (Bull 1). Companies, organizations and social groups continue to strive for total equality in all fields of work, life and education but socially ingrained stereotypes, gender roles and sexism still influence people subconsciously in their actions and decisions. Companies such as Deutsche Telekom strive to make clear, significant goals in efforts to show their support for sex equality. Deutsche Telekom set a goal of reaching and maintaining a thirty percentRead MoreIn Early Childhood, Play Diverges, C ontingent On An Immense1351 Words   |  6 Pagesyears by numerous theories in early childhood development. Consideration needs to be taken as to if play is free and simple or not. Over the years there has been a multitude of different theories about the purpose of a child’s play. The first theories of play were developed in the eighteenth and nineteenth centuries with four main theories that involved the perception of how and why children work. These theories were the surplus energy theory, the recreation theory, the instinct theory and the recapitulationRead MoreJean Watson : An American Nurse Theorist And Professor3182 Words   |  13 PagesUniversity of Colorado at Boulder, where she earned her bachelor s degree in 1964, a master s degree in psychiatric and mental health nursing in 1966, and a Ph.D. in educational psychology and counseling in 1973. In 1961 Margaret Jean Harmon became Jean Watson when she married Douglas Watson after completing nursing school (Nursing Theory, 2013). Jean Watson is a distinguished figure in the nursing world where she is a nursing professor and a theorist. She held an endowed chair in caring science atRead MoreWomen s Female Leadership During The Renaissance2055 Words   |  9 Pagesthese women stopped their musical pursuits after they entered into the marriage contract. It seems the conditions under which women were raised during this time period became the impetus for the development of the salon. Such social beliefs and practices have, through the centuries, undeniably influenced women’s roles in relationship to musical creation and production†¦the more passive roles of music promotion and music re-creation, as opposed to creation and composition, help to explain how womenRead MoreEssay on Postmodernism: Myths and Realities1996 Words   |  8 PagesPostmodernism: Myths and Realities A number of theorists and scholars have proclaimed that we now live in a postmodern world--a world better explained by theories and concepts different from those of the modern world dating from the Enlightenment and before. The theories and concepts of postmodernism are widely and prominently applied in adult education. So, how do postmodernists characterize postmodernism? What are the critics critiques? Do proponents and critics agree on anything? CharacterizingRead MoreThe Four Pillars Of Education2169 Words   |  9 Pageswill look at numerous theories and the research of credited theorists. It will include research from previous decades and will link in to today’s educational system. Education as a discipline and as a practice is informed by four bodies of knowledge and four separate inter related disciplines: Philosophy, Sociology, Psychology and History. These are known as the four pillars of education. Philosophy provides the epistemological basis of education, there are two main philosophical positions in educationRead MoreKatharine Kolcaba4168 Words   |  17 PagesKatharine Kolcabas Theory of Comfort Kelly Ferreira Summer, 2004. In the early part of the 20th century, comfort was the central goal of nursing and medicine. Comfort was the nurses first consideration. A good nurse made patients comfortable. In the early 1900s, textbooks emphasized the role of a health care provider in assuring emotional and physical comfort and in adjusting the patients environment. For example, in 1926, Harmer advocated that nursing care beRead MoreKatharine Kolcabas Theory of Comfort Essay4211 Words   |  17 PagesKatharine Kolcabas Theory of Comfort Kelly Ferreira Summer, 2004. In the early part of the 20th century, comfort was the central goal of nursing and medicine. Comfort was the nurses first consideration. A good nurse made patients comfortable. In the early 1900s, textbooks emphasized the role of a health care provider in assuring emotional and physical comfort and in adjusting the patients environment. For example, in 1926, Harmer advocated that nursing care be