The Study on Financial Resources of Small Business in UK, MSc Finance

This report presents a comprehensive study on the financial resources available to small businesses (SMEs) in the UK, conducted as part of an MSc in Finance program. The research explores both internal sources like retained earnings and owner's capital, and external sources such as bank loans, government grants, and trade credit. The study employs a mixed-methods approach, including positivism research paradigm, deductive approach, descriptive research design, qualitative and quantitative research techniques, primary and secondary data collection, and random number sampling method. The analysis, based on a sample size of 30, utilizes thematic and statistical analysis to identify the most commonly used financial resources and the factors influencing SMEs' funding decisions. The findings reveal that retained earnings, personal capital, bank loans, government grants, and loans from friends and family are the primary sources of funding. Factors such as cost, time, financial needs, and organizational size are highlighted as crucial considerations in the selection of financial resources. The report concludes with recommendations and identifies limitations and opportunities for future research in the field of small business finance.

The Study
On Financial resources of small business in UK
By
MSc in Finance

The Study on Financial Resources of Small Business in
UK
Author
Supervisor
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ACKNOWLEDGEMENT
I am thankful to all those persons who have given me support, guidance as well as much needed
motivation so as to complete the dissertation. Firstly, I owe my thanks to mentor who gave me
chance to undertake this dissertation. Furthermore, I am thankful to my team members, family
and friends who helped me in all possible accords. This led to successful completion of
dissertation and achievement of relevant results.
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ABSTRACT
There are number of financial resources which are available for increasing capital of the
organization. Most of the organizations obtain funds from those sources, which are associated
with the low cost and high benefits. The major aim of current study is conducting research on
available financial resources and which are actually used by small companies. For attaining this
aim author has focused on internal and external financial resources that are available and actually
being used by SMEs. Along with this, focus has also been given on different factors, which are
considered by SMEs in selection of fund resources.
For conducting investigation author has used number of research methods such as positivism
research paradigm, deductive approach, descriptive research design, qualitative and quantitative
research techniques, primary and secondary data collection, random number sampling method,
etc. further, sample size of the current investigation was 30 and researcher has used both
thematic and statistical analysis methods for examining collected facts and figures in effective
manner. After conducting research author has concluded that Retained earnings, owner’s capital
and credit cards are major internal sources and bank loan, government grants, trade credit,
leasing and hire purchase, loan from friends and family and bank overdraft are external sources
of funds for small business organizations. In which only retained earnings, personal capital, bank
loan, government grants and loan from friends and family are actually used by small business
organizations of UK. The major factors which influence decisions of small business are
associated cost, time, financial needs, size of the organization, etc. overall, study has attained
organization’s objectives in effective manner.

Declaration
I declare that this dissertation is all my personal work and the source of information and material
I have used have been fully recognized and properly granted as required.
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TABLE OF CONTENTS
Chapter 1: Introduction....................................................................................................................1
1.1 Title........................................................................................................................................1
1.2 Background............................................................................................................................1
1.4 Project rational.......................................................................................................................1
1.5 Aim and objectives................................................................................................................2
1.6 Research question..................................................................................................................2
1.8 Dissertation structure.............................................................................................................2
1.9 Summary................................................................................................................................3
Chapter 2: Literature review............................................................................................................4
2.1 Introduction............................................................................................................................4
2.2 Small business financing using financial resources...............................................................4
2.2.1 Internal financial resources.............................................................................................5
2.2.2 External financial resources............................................................................................5
2.3 Implications of financial resources........................................................................................7
2.4 Factors which are considered by SMEs at the time of selecting financial resources............9
2.5 Case analysis of Nisa Retail................................................................................................11
2.6 Research Gap.......................................................................................................................12
Chapter 3: Research methodology.................................................................................................13
3.1 Introduction..........................................................................................................................13
3.2 Philosophy of the research..............................................................................................13
3.3 Research approach...............................................................................................................14

3.4 Research design...................................................................................................................15
3.5 Strategy of research.............................................................................................................15
3.6 Data collection method........................................................................................................17
3.7 Sampling.........................................................................................................................18
3.8 Data analysis........................................................................................................................19
3.9 Ethical issues and considerations.........................................................................................20
Chapter 4: Data analysis................................................................................................................21
4.1 Introduction..........................................................................................................................21
4.2 Thematic analysis................................................................................................................21
4.3 Statistical analysis................................................................................................................34
4.4 Summery..............................................................................................................................36
Chapter 5: Theoritical interpretation and conclusioN:..................................................................38
5.1 Introduction:........................................................................................................................38
5.2 Critical evaluation of adopted methodology........................................................................38
5.3. Conclusion about Research objectives/aim:.......................................................................38
5.4 Conclusions about the research question.............................................................................40
5.5 Recommendation.................................................................................................................43
5.6 Limitations of the study.......................................................................................................44
5.7 Opportunities for future research.........................................................................................44
5.8 Reflective statement.............................................................................................................44
references.......................................................................................................................................46
Appendix 1.....................................................................................................................................50
Questionnaire for managers of small business firms of UK......................................................50
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List of Table

List of Figures
Figure 1: Positivism research approach.........................................................................................15
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CHAPTER 1: INTRODUCTION
1.1 Title
“Study on financial resources of small business in UK”.
1.2 Background
Nisa Retail is a mutual retail organization which represents individual small retail
business unit operating in the country. The brand has developed a significant identity within the
economy. This mutual organization is owned and operated by individual members operating in
the economy (About Us, 2016). As per the analysis the stated business is a mutually operating
business unit which helps the retail unit to remain competitive within the market. Nisa negotiates
product pricing, provides a supply chain, and offers sales, marketing, and business development
services for its members. Nisa Retail has more than 1000 registered shareholders operating more
than 4000 stores. The company has annual sales of £1.58 billion (About U,. 2016).
For stating a new business every entrepreneur needs to acquire finances from different
financial resources. There are number of financial resources which are available for an
organisation to increase its capital in the market. However, most of the companies were keen to
get finances from those sources that are correlated with the low cost and high benefits. To get the
funds for large-scale companies is easier errand whereas it’s vey difficult for small business
firms because they rely on low security. To put it another way, it can affect the future growth and
development of SMAs comparison with large-scale companies. So, for understanding the
concept of small business financing researcher has decided to demeanour study on this current
subject in UK.
1.4 Project rational
To obtain the funds from different financial resources a business needs to have
positive cash flow and working capital of high security amount. However, at the time of
preliminary especially for SMEs, a business owner do not have appropriate amount of security
for grants (Davis and McKevitt, 2013). Hence, not only they face issues in selecting financial
resources but also use only few resources for running business operations. SMEs do not have
enough cash flow and due to this reason they cannot manage all expenses in effective manner.
Along with this, too much debt can also reduce the number of financial resources for obtaining
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resources. Therefore, all these are considered as major reasons behind this issue (Kriz,
Gummesson and Quazi, 2013).
Nowadays, it became one of the big issue because there are number of modern financial
resources are available for SMEs but still they use traditional or old ways of financing. So,
firstly, researcher wants to identify all those financial resources that are available for financing
business operations and secondly, researcher will also focus on reason behind the use of some
specific financial resources only.
1.5 Aim and objectives
Aim:
“To conduct study on available financial resources and which are actually used by small
companies in UK”.
Objectives:
 To examine the financial resources available for small business firms of UK.
 To critically analyse all those financial resources which are actually used by SMEs.
 To determine factors which are considered by SMEs in selection of fund resources.
 To suggest appropriate financial resources for increasing financial capital of SME.
1.6 Research question
1. What are the major financial resources available for SMEs of UK?
2. Which types of financial resources are actually used by small business organizations?
3. Which factors are considered by SMEs in selection of fund resources?
4. What are the most effective financial resources for increasing financial capital of SME?
1.8 Dissertation structure
A brief overview of the structure of the dissertation is describe as under:
 Chapter 1: Introduction – It is one of the important chapters that provides
information about the aim and objectives of the whole investigation. Along with this,
it also represents the brief overview of the entire research study.
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