Mamaput is a popular eatery in the city centre and wants to open up more outlets in other parts of the city. (a) State four sources of fund to finance the proposed expansion by Mamaput. (b) Explain four factors that would influence the location of the new outlets.
Explanation
.(a) Sources of Funds to Finance the Expansion by Mamaput:
The eatery can fund the expansion through profits that accrue from its past business operations. (ploughed-back profit). The eatery owner can receive financial assistance from friends and relatives for the expansion of the business. (gifts) The eatery can finance the purchase of properties and equipment through lease agreement. The eatery owner can take a loan from financial institutions to fund the expansion. The eatery owner can make use of her personal savings to fund the expansion. The eatery can purchase raw goods on credit from its suppliers. The eatery can source overdraft from banks. The eatery can borrow funds from relatives and friends. The eatery can purchase properties and equipment through hire purchase. Subsidies and grants can be obtained from the government.
(b) Factors Affecting the Location of the New Eatery Outlets:
Nearness to market: The eatery owner would locate her business closer to potential buyers/consumers. Availability of power supply: Mamaput would locate in a place with adequate power supply to enhance operations. Availability of labour: Mamaput would consider the availability of required workers/staff Nearness to source of supply: The eatery would consider the closeness to other suppliers and vendors who will supply the essential raw materials to the eatery. Government policy: The eatery would consider government regulations and policies with regard to the establishment and operations of restaurants. Availability of parking space for customers who will patronize their services. Availability of good road network to facilitate customers' accessibility. Availability of good, source of water supply for the preparation of food. Availability of support services such as banking and telecommunication. Location of competitors: Mamaput would consider the number of eateries existing area in the in terms of strength and weakness to know if she can stand the competition. Availability of store: The eatery would consider the availability of store to either rent or buy for the expansion project. Size of the market: The eatery would consider the population density of the location she intends to locate the business. Environmental issues: The eatery would have to Consider the hygienic nature of the area she is considering locate the outlets.
