Finance plays a critical role in all aspects of individuals and the society. In the area of business for instance, the adequacy or otherwise of finance is a good indicator of the extent of success or failure of any venture. Since the economy of the world is generally monetized financial considerations must feature at all stages of the operations of any business. No business, no matter how presently buoyant has all the money it requires to carry on its activities the way it wants. This is natural business, like persons have unlimited wants and needs on which to spend money. As a result businesses keep on exploiting all avenues for getting funds as much as possible. Often many businessmen in private sectors have complained about lack of adequate finance. This is a big concern as lack of finance can paralyze business as business needs finance to hire labour, obtain raw materials and utilities, obtain and maintain equipment, expansion of the business and many other.
Profitability serves as a factor in measuring success. If the business is making good profit, it is succeeding but when it is running at a loss, it implies that the business is failing. The growth rate of the business is measured by how much profit it has made.
A Private Limited Company is a kind of corporation that is formed by a minimum of two persons and maximum of fifty persons. Member of the same family or friends form such corporations in most cases. The two important features of private companies are:
1.Their share are not transferable
2.Such companies are bond by law their shares
Example in Nigeria of such companies are concord pres Nigeria Ltd, Ekene Dili Chukwu Transport Nigeria Ltd, ABC Transport Nigeria Ltd, Akabo Floor Milk Nigeria Ltd, A. E. Muoneke and Sons Ltd, Edo Nigeria Ltd, Godal Pharmaceutical Ltd, Eze and Bros Nigeria Ltd, Spera in Dec Ltd etc.
ADVANTAGES OF PRIVATE COMPANIES
1.Private companies provide small business with limited liability and thus give them the feature of continuity which majority of partnership do not have.
2.The private companies make it impossible for outsiders to filtrate into them since share cannot be transferred easily.
3.Some degree a personal contact between the director’s staff and customers may be possible since the business is not likely to be very big.
The researcher selected the topic because of the difficulties encountered by many private establishments in an area of finance, more especially that finance has bedeviled many establishments and that people do not take more of the advantage of good source of finance available to them.
This piece of work is set to be morable booster to aspiring businessmen and women a like. It is meant to solve the problem of inefficient sourcing and management of finance. Again, this piece of work is done to cancel the overwhelming nature of the inadequacies of finance to stand forthright the model of good financial management since finance is a pivot through which the wheel of all businesses rotates. Effort has been made to lay emphasis on methods and achievement of which some selected for study.
Though this research works, it has been realized that more emphasis on sources finance and profitability lies on efficient utilization of finance and not on procurement is practiced by many business establishments. Some of these selected businesses under study have used this strategy to achieve profitability. Theirs is not go and procure finds but a thought on the amount required and how this amount should be employed wisely in their business. Thus while procurement has been the bare of many establishment in this country, some of these selected business lends from point of view of effective utilization of finance. Trained personnel’s are chosen to handle finance in the establishments and this has brought about efficiency and effectiveness in the management of finance because they make sure that financial records are properly kept when due.