<p>Companies need capital in order to run their business, do necessary investments and grow larger. These actions are combined with high costs where both internal and external financing might be appropriate. Capital structure is the relation between debt and equity.</p><p>In this thesis we have focused on the decision behind the capital structure. We have focused on the road freight industry and we have tried to find out how management reason about their decision. The purpose of this thesis is therefore to describe and analyze SMEs’ decision of capital structure within the road freight sector in the Jönköping region. Emphasise is put on the different aspects that influence the capital structure decision and to what extent this is a strategic issue coloured by personal beliefs.</p><p>To fulfill the purpose mainly a qualitative approach with primary data from structured interviews has been used. The interviews were conducted face-to-face with six owner and/or managers. Further on, secondary data from the firms’ annual reports were used and analyzed.</p><p>The pecking order theory explains that firms, especially SMEs, prefer to finance their businesses with internally generated funds. Focus of the theoretical part are on theories of what factors that affects the capital structure decision, how this can be argued to be a strategic question for SMEs, how risk affects the capital structure decision and how this decision is made in a family business. These theories are presented to shed light on the capital structure decision making process of SMEs.</p><p>From this study it is found that the majority of the companies’ prefer internal financing i.e. reinvested earnings, and as a second alternative to use debt in form of bank loans. The study also shows that the reasons behind this preferred order are the will of being independent, previous experience and managements’ risk-taking propensity. We believe that these factors combined with beliefs about debt and realized need for debt works as a base for how a capital structure strategy is discussed, formed and developed. From this study it can also be concluded that risk indirect affects the capital structure decision and that a restrictive view on debt leads to a restrictive desire to grow since a fast growth in most cases needs to be financed by debt. Last, the study concludes that even though the studied firms prefer to finance with retained earnings they all use debt more or less.</p>

Companies need capital in order to run their business, do necessary investments and grow larger. These actions are combined with high costs where both internal and external financing might be appropriate. Capital structure is the relation between debt and equity. In this thesis we have focused on the decision behind the capital structure. We have focused on the road freight industry and we have tried to find out how management reason about their decision. The purpose of this thesis is therefore to describe and analyze SMEs’ decision of capital structure within the road freight sector in the Jönköping region. Emphasise is put on the different aspects that influence the capital structure decision and to what extent this is a strategic issue coloured by personal beliefs. To fulfill the purpose mainly a qualitative approach with primary data from structured interviews has been used. The interviews were conducted face-to-face with six owner and/or managers. Further on, secondary data from the firms’ annual reports were used and analyzed. The pecking order theory explains that firms, especially SMEs, prefer to finance their businesses with internally generated funds. Focus of the theoretical part are on theories of what factors that affects the capital structure decision, how this can be argued to be a strategic question for SMEs, how risk affects the capital structure decision and how this decision is made in a family business. These theories are presented to shed light on the capital structure decision making process of SMEs. From this study it is found that the majority of the companies’ prefer internal financing i.e. reinvested earnings, and as a second alternative to use debt in form of bank loans. The study also shows that the reasons behind this preferred order are the will of being independent, previous experience and managements’ risk-taking propensity. We believe that these factors combined with beliefs about debt and realized need for debt works as a base for how a capital structure strategy is discussed, formed and developed. From this study it can also be concluded that risk indirect affects the capital structure decision and that a restrictive view on debt leads to a restrictive desire to grow since a fast growth in most cases needs to be financed by debt. Last, the study concludes that even though the studied firms prefer to finance with retained earnings they all use debt more or less.

With the transport sector being one of the major contributors to global CO2 emissions and a projected growth of emissions by another 16 percent until 2050, the need for new innovative and sustainable solutions for the transport industry arises. These endeavours are what emerging start-up enterprises want to deliver with their novel Transport as a Service business model. As part of their growth strategy, they want to conquer international markets and establish their operations abroad, which is why this thesis develops a strategic framework for the expansion into new foreign markets. For better applicability and generalisability of the results, the framework was additionally tested and refined in the context of an expansion to the German market, using an action research design. Three key stages were identified for Transport as a Service start-ups to expand their operations to attractive foreign markets, namely the market attractiveness assessment, the selection of a suitable market entry mode and finally the initiation of key workstreams to achieve operational readiness abroad. The first stage proposes to expand to markets with a high business proximity, using a ’lightweight funnel approach’, which represents a compromise between resource-intensive market evaluation and reduction of time-to-market through a dynamic learning-by-doing process. Subsequently, it has become apparent that a high-control market entry mode in the form of a wholly owned subsidiary would be the most appropriate for Transport as a Service start-ups to enter foreign markets. Thereby, the scarcity of potential venture partners and acquisition targets can be compensated as well as the risk of technological spill-over mitigated. Finally, during the initialisation of key workstreams in the last stage, five conclusions were drawn from the research. More specifically, the need for acknowledgement of time uncertainties and criticalities in the process, the importance of the company’s operational partner network, a strategic discussion about acquisition of country-specific knowledge, an early business model review as well as the significance of defining clear tasks and responsibilities connected to the installation of a central expansion team with necessary project management authorities emerged. / Transportsektorn bidrar kraftigt till de globala koldioxidutsläppen och utsläppen förväntas öka ytterligare 16 procent tills 2050. I takt med de stigande koldioxidutsläppen har behovet av nya innovativa och hållbara lösningar ökat. Start-ups inom transportsektorn har utvecklat en ny affärsmodell, ”Transport as a Service”-modellen, med syfte att leverera sådana lösningar. Deras tillväxtstrategi omfattar bland annat internationell expansion och etablering utomlands. Syftet med detta examensarbete är därför att utveckla ett strategiskt ramverk för hur man tar sig in på marknaden i ett nytt land. Ramverket utvecklades via aktionsforskning genom att testa det under en tänkt expansion på den tyska marknaden. I utformningen av ramverket identifierades tre huvud-faser för ”Transport as a Service”-start-ups att expandera verksamheten i nya attraktiva geografiska marknader. Dessa är (1) utvärdering av hur attraktiva marknaden är, (2) val av lämpligt tillvägagångsätt för att ta sig in på marknaden och (3) initiering av de viktigaste aktiviteterna som är nödvändiga för att bli redo för drift utomlands. I den första fasen föreslås att expandera till marknader med närliggande branscher genom att använda en ’lightweight funnel approach’. Den innebär en kompromiss mellan resurskrävande marknadsanalys och minskning av ”time-to-market” genom en dynamisk lära genom att göra-process. Som ett resultat har det framkommit att ett väl kontrollerat inträde på en ny marknad via ett helägt dotterbolag är det mest optimala för Transport as a Service start-ups. Därmed mitigeras både eventuell frånvaro av möjliga samarbetspartners eller uppköpsobjekt och risken för oavsiktligt spridande av egen unik kunskap. Slutligen kunde fem forsknings-slutsatser dras rörande uppstarten av aktiviteterna i den sista fasen. Dessa slutsatser är: att det är nödvändigt att ta hänsyn till tidsmässiga osäkerheter och kritiska delar i processen, vikten av att företaget har ett väl fungerande nätverk av partners, en strategisk utvärdering av anskaffning av land-specifik kunskap, en tidig utvärdering av affärsmodellen, samt vikten av att tydliggöra arbetsuppgifter och åtaganden hos ett centralt expansions-team inklusive nödvändiga mandat för projektledning.