Funding growth
Growing a business doesn't just happen. It has to be paid for and there are a number of ways that businesses can be funded to grow.
Retained profit
A business can hold back profit each year from its A part-owner of a business. to reinvest into the business. Retained profit does not need to be paid back and prevents any outside influences becoming involved in the business.
Divestment
Divestment is when a company sells off an Something a business owns that has monetary value such as a delivery van or money in the bank. to raise finances. In 2003, Stagecoach, the Scottish bus operator, sold off its Coach USA operations in Texas for 拢18 million.
Divestment allows a company to focus on other more profitable aspects of the business and the The money and equipment invested into a business. generated from the divestment can be reinvested in the core areas of the business.
Deintegration
Deintegration involves selling off a part of the company that had previously been integrated. For example, a company may decide to sell the delivery company they had previously bought to aid with product delivery. This will allow them to focus on the core activities of the business.
Asset stripping
When a company is purchased for the value of its Something a business owns that has monetary value such as a delivery van or money in the bank. rather than for the value of its operations. Asset stripping will involve a business buying another company and then selling off its assets for profit.
Demerger
A demerger occurs when a firm divides or breaks into more than one company. In 2010, the UK communications firm Cable & Wireless demerged into Cable & Wireless Worldwide plc and Cable & Wireless Communications plc, the new name for Cable & Wireless International. The divided companies were still owned by the organisation but managed as separate companies (although since then both companies have been bought over).
Buy-in
This is when managers who are not employed by the company purchase the business as they believe they can run it more profitably.
Buy-out
This is when managers or employees who are currently employed by the business purchase the business from the owners.
Outsourcing
Outsourcing is when a company hires another business to do some work for them. Many firms outsource cleaning or IT operations to smaller, more specialist companies.