Final answer:
In a small business, the owner initially provides money to start the business and may take some money out for personal use. They can also inject additional funds or seek external investors if the business needs more capital.
Step-by-step explanation:
When it comes to small businesses, the flows of money between the owner and the business can go in various directions depending on the situation. In most cases, the owner provides the initial capital to start the business, either by using their own savings or by borrowing money. This money goes into the business and is used for things like purchasing equipment, supplies, and hiring employees.
As the business starts to generate revenue, the owner may choose to extract some of the money for personal use. This can be done through a salary or regular withdrawals from the business profits. It's important to note that taking money out of the business should be done carefully to ensure the sustainability of the company.
On the other hand, if the business needs additional funding to grow or expand, the owner may choose to inject more money into the business. This could be in the form of additional loans or contributions from the owner's personal funds. Additionally, in some cases, the owner may seek external investors like angel investors who provide funding in exchange for ownership shares in the business.