Question

(a) Identify and discuss four options available for raising equity capital (5)

(b) What marketing potential does the World Wide Web offer small business (5)

(c) What does it take for a company to market successfully using the Web / e-commerce?

NB; Please provide references or citations where applicable

Answer 1

A) Four options available for raising equity capital are as follows:

(i) Early Stage investors: You can approach early stage investors because most of time they take large risks. Because they think that if they will invest in small businesses then they can attract the substantial returns on their investment. That's why to raise equity capital, company should approach or attract the ealry stage investors to invest in their comapny or business.

(ii) Borrowings:  There are two type of borrowings to raise equity capital. They are Banks and Bonds. So, company can take a loan from bank by repaying it some rate of interests. On the other hand, company can also issue bonds. They can do investments and buy other firms also. But, for a small firm, borrowing from bank is much better way in comparison to issuing of the bonds because the bank knows the status of the company because bank has the financial statement of the company. On the other hand, medium and large business can go for bonds to raise the equity capital.

(iii) Reinvesting: If a firm earns profits then they should reinvest the profits in machinery, infrastructure etc to make more profits. This is the primary resource to raise the equity capital of the company.

(iv) Sell Stocks: The company should sell its stocks because if the company will sell its stocks, there will be more shareholders who will own the stock's of the company as a result of which more shareholder's can cast for the company board of directors.

B) Marketing potential does the World Wide Web offer small business: The WWW offers a wide area of marketing potential to the small business. They can advertise their goods and services for long period of time and can attract customers for generations. More the customers, more the sale and more the profits. In this wasy, they can gain organic publicity also and can do their business promotion also. They can also suggest their customers to post reviews on WWW which will help the small business to grow accordingly to the taste of their customer and preferences. As a result, they will automatically get update about the material and products their customers needs and wants.

C) Factors a company should follow to market successfully using the Web / e-commerce:

• Simple Website design: Some company's website designs are too congested and due to this, the sites gets enough time to load. So, to avoid this, the website design should simple and straight to avoid any confusion among the customers. The customer can easily navigate and search the things which he/she needs and required.
• Large Images: Try to showcase the products with large images so that the customer gets satisfaction and will match their expectations.
• Descriptions: There should be detailed description about the product followed by a large picture of the product. A survey has showed that 20% of the purchasers could not complete their purchasing due to the incomplete descriptions.
• Target the audience through social medias: In today's era, everyone use social media. So, to target your clients, the company should use various social medias to share their stories, marketing and reviews so that the client can develop interest in the company and there should be spread of words about the company.