Adamu intends to open a store to sell detergent as a major distributor for companies in the country
(a) List and explain four sources from which Adamu could get funds to finance the business.
(b) State four factors that would influence Adamu's choice of the location of the business.
(a) Listing and explanation of Sources of funds available to Adamu to finance the business:
Trade credit: Adamu can obtain products on credit terms from the producer and pay later.
II. Personal savings: Adamu could use his reserved income for uncertainties to start the business.
III. Gifts from families and friends: He could receive financial assistance from his friends and family members through the launch of the business opening to encourage him in the starting of the business;
IV. Hire purchase: Adamu can get some of the furniture and fittings for his shop on hire purchase to start his business;
V. Bank Joan: Adamu can take a loan from the bank at a particular interest rate to finance the business;
VI. Co-operative loan: He could take a loan from his cooperative society at a low interest rate to start the business;
VII. Bank overdraft: Adamu can get an overdraft from his bank at a particular interest rate to start the business by withdrawing more than his savings
(b) Factors that would influence the location of Adamu's Store:
1. Nearest/Proximity to Adamu's target market location would influence his choice of store;
II. The nearness to the detergent producing company would influence the decision to locate the store;
III. Availability of a constant power supply would influence the location of the store;
IV. Competitors' location would influence the location of the store;
V. Government policy on business location and establishment would be considered;
VI. Easy accessibility to the Store by customers due to good infrastructure would influence the location of the store;
VII. The security and safety of the area of the store would influence the location of the store.
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