Johanna plans on being the sole proprietor of a home-based sales consulting business. Since she will work out of her home, her startup costs should be low. Which type of financing would be BEST for her to use for the start up of her business?

Question

Quizplus · Accepted Answer

Since Johanna is starting a home-based business with low startup costs, it would be best for her to use her personal savings to finance her business rather than taking out a loan or seeking out investors. Using personal savings eliminates the risk of going into debt and paying interest on a loan, and it also allows Johanna to maintain complete control over her business without having to answer to outside investors. Loan from friends or venture capitalist may have strings attached that could impact the business.

Johanna Plans on Being the Sole Proprietor of a Home-Based