DPB2012: ENTREPRENEURSHIP

CHAPTER 7 : ENTREPRENEURIAL SOURCES OF CAPITAL AND SUPPORT

SYSTEMS
LEARNING OUTCOMES
7.1 Distinguish business support systems
7.1.1 Justify the sources of capital for entrepreneurship
activities
7.1.2 Classify types of business support
SOURCES OF CAPITAL FOR ENTREPRENEURSHIP

Capital – any form of wealth employed to produce more wealth for

a firm
It is basically the amount of money needed to start up a business
and run the business activities
There are various sources of capital that are available for setting up
or developing a business
 Personal
funds

Stock Family &

market friends

Capital

Government Retirement
loan accounts

Bank /
Financial
institutions
 SOURCES OF CAPITAL FOR ENTREPRENEURSHIP

Personal Family &

Funds Friends

 Are the first source of capital

 Is another important source of
 Uses personal funds or savings
financing sought by entrepreneur
to gain the confidence of
after using their own funds
investors and lenders
 Easier to raise as it is based on
 An entrepreneur must ensure
personal relationship and trust
that the business is feasible
 It is advisable that entrepreneur
before investing his personal
repays his loan as soon as possible
savings to safeguard himself
to avoid damaging relationship
from losing everything
SOURCES OF CAPITAL FOR ENTREPRENEURSHIP

Retirement
Accounts

 An entrepreneur would have saved funds for

retirement purposes.
 Therefore, he can use this money to fund the
development of his venture.
 Funds from the pension scheme for from EPF
may also be enough to start up business
 If the entrepreneur fails in his business, he may
have to live more frugally after retirement
SOURCES OF CAPITAL FOR ENTREPRENEURSHIP

Financing by
bank / financial
institutions

Long-term Medium-term Short-term

financing financing financing

 Period between 5  Period between 1  Period less than 1

– 25 years – 8 years year
 Used to acquire  Covers hire  E.g. overdraft
fixed assets e.g. purchase, lease,
land, building, loan agreements
SOURCES OF CAPITAL FOR ENTREPRENEURSHIP

Government
loan

 Provides loan to assist entrepreneurs in

running ventures as well as to develop our
economic growth rate
 Government provides various grant &
government subsidized loan to encourage
investment & development
 E.g. MARA,SME Bank, PNB, SME Corp etc.
SOURCES OF CAPITAL FOR ENTREPRENEURSHIP

Stock market

 Some of entrepreneur prefer to invest in stock

market for the intention of raising the capital
 E.g. issuance of ordinary shares, bonds,
investment in other company etc.
 TYPES OF BUSINESS SUPPORT

 Is an aid in terms of financial & technical

services by the government & other private
BUSINESS agencies
SUPPORT  With the knowledge of business support
SYSTEMS systems, the entrepreneur will be able to
carry out his business smoothly & make
informed decisions when faced with any
uncertainties in his new venture
 TYPES OF BUSINESS SUPPORT

Entrepreneur
Technical &
Financial & Informational
technological
support management support
support
training

Extension & Research &

Marketing Infrastructure
advisory project
support support
services recognition
 FINANCIAL SUPPORT

Provided by financial institutions for an entrepreneur to start and

perform a business
Assists in establishing the factory’s site, buying office equipment,
purchasing machinery & capital turnover
 ENTREPRENEUR & MANAGEMENT SUPPORT

Provided to train entrepreneurs to obtain necessary skills in the

relevant field and knowledge in the area of management
Build the entrepreneurs’ confidence and give them encouragement
 TECHNICAL & TECHNOLOGICAL SUPPORT

Increase technical knowledge by attending educational courses

provided by several agencies in Malaysia
To expose entrepreneur to the latest production methods &
systematic management
Learn about the latest technological advancement in the
manufacturing & management field
 INFRASTRUCTURE SUPPORT

Provide suitable business locations which are appropriate with the

business whereby the location or premise is equipped with all types
of facilities including utilities
Help entrepreneur to decrease issues and problems related to the
premise and industrial site
 MARKETING SUPPORT

Perform to penetrate the sale of products or services offered by the

business
Support services in marketing distribution and product or services
marketing locally throughout the country
Help entrepreneur distribute and market his products locally &
internationally
 RESEARCH & PROJECT RECOGNITION

Includes project possibilities, marketing research & research on

technology
Help the entrepreneur to increase efficiency, technological
achievement, production, as well as produce better quality
products
To ensure that the entrepreneur will be able to compete in the local
or international arena
 INFORMATIONAL SUPPORT

Offered to an entrepreneur in the form of business opportunities,

statistics, discovery, research and development, and technological
development
 EXTENSION & ADVISORY SERVICES

Conducted by MARA, MITI, MEDEC, MATRADE

Involved in consulting and monitoring the implementation of the
proposed project to ensure no hiccup happens while carrying out
the business operations
Small fees are charges depending on the scope of the services. In
return, tax reduction and exemption are given to the entrepreneur
THE END…