SOURCES OF FINANCE FOR ENTREPRENEURSIntroductionDoug Perkins was born in Llanelli, but he has been in Ammanford, Australia for most of his lifetime. He met Mary (His wife) at Cardiff University as they studied optometry. The first optometry practice for the couple was opened in Bristol. From this first venture, the couple opened up a small chain and later came to sell the business for two million pounds and moved to Guernsey. Later, they got back to the same old business but this time with specsavers. Specsavers is an optometry business which was set up from scratch by Perkins (Otani 1996).
It is involved with the sale of spectacles, hearing aids and contact lenses. The company has outlets in Finland, Denmark, Sweden, Norway Australia, Netherlands, and Ireland (Perkins, 1998). This paper is intended to focus on the sources of finance for this business. It will review the main sources of funds, the challenges faced in sourcing the finances and the management of the ever increasing financial needs. More over, it will address the contribution of relatives towards financing the business, if any, besides assessing the source of finance that is regarded as the best. Sources of finance The interview conducted with Doug Perkins was very informative about the sources of finance for his business venture.
Initially, he worked with a boxing establishment which was among the smallest in his region. Later, he worked as an optometrist in the neighborhood. He also engaged in other tasks, including being a doorman for a cabaret club, and being a player in a local rugby club. From all these activities, Dough made savings, which formed part of his capital when he decided to start up the business.
Although these savings did not provide a significant proportion towards capital, they were one of his sources of capital. As evidenced by the answers provided by Dough during the interview, the implementation of the idea was not an easy task. He admits that several challenges hindered this activity. The major obstacle was the issue of finance. This clearly comes out where Perkins says “Banks, which were the major source of finance hardly believed in the success of our business” This challenge made Perkins to think of jointly owning the company, (Partnership) and this is what led to the joint –management of the venture with a fifty percent holding by Perkins, and the other fifty percent ownership going to the local opticians.
This did allow the general financing that was necessary to end up being divided between those two parties. As a result, the company has grown to be the largest in the United Kingdom. Though it was initially an obstacle, this partnership made the company to finally open up outlets in other countries, such as Finland, Australia and Netherlands.
Doug Perkins, in the interview, elaborates how the company re- invests within the business. This generates the required fund for training its personnel, in a bid to improve their expertise (Doug 2011). Also, these finances are used to meet the needs of the stakeholders, besides offering support to the company. It is clear that a significant amount of this fund is devoted towards motivating the people affiliated to the company. This is because employees are recognized as a useful and valuable asset of the company.
This source of finance also helps to fund the communication system that ensures an efficient relay of contributions from every party. These are the several uses of the finance generated from the company in the form of profits or returns which accrue from the investment made in the company.