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Business 📈 > 1.1.3 Putting Business Ideas Into Practice 🎰 > Flashcards

1.1.3 Putting Business Ideas Into Practice 🎰 Flashcards

1
Q

What is an aim?

A

A general goal and set on the purpose of a business existence

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2
Q

What is an objective?

A

More specific than aims a contribution to help businesses achieve their aims

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3
Q

What are the five business financial objectives?

A

Profit
Market share
Survival
Sales
Financial security

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4
Q

What are the seven non-financial objectives?

A

Business recognition
Social goals
Personal satisfaction
Control
Independence
Challenge
Customer satisfaction

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5
Q

What is a social enterprise?

A

A business which has the main goals of contributing to society - charity’s that rely on cake sales and donations

Aims - Goals - survival contribute 100% of profit to charity

Objective - have personal satisfaction and social goal of reducing poverty by 20% in 5 months time

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6
Q

What varies a businesses aims and objectives?

A

The type of sector it’s in

Public

Private

Social

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7
Q

How do we find revenue ?

A

Price * quantity

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8
Q

What are variable costs

A

Costs that vary due to the businesses activity

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9
Q

What are fixed costs ?

A

Costs that stay the same

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10
Q

How do we find total costs ?

A

Fc+Vc

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11
Q

What is profit?

A

Is the money left over after you pay your TC with your SR

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12
Q

How do we calculate profit?

A

SR- Cost of sales

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13
Q

Why is profit an objective for most businesses?

A

Helps survival

Can be reinvested for expansion

Generate wealth for owner

Pay employees

Provides security

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14
Q

How do we calculate interest ?

A

Total repayments - borrowed amount/ borrowed amount *100

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15
Q

How do we find BEP?

A

FC/(SR - VC)

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16
Q

How do we find BEP in revenue/cost

A

BEP in units * sales price

17
Q

What is break-even?

A

The amount of sales you need to not make a profit or a loss

18
Q

How do we find margin of safety ?

A

Actual/budgeted sales - BEP sales

19
Q

What happend if a business increase the price of products ? Where will the BEP be?

A

Lower

20
Q

How do we calculate receipts ?

A

Net cash flow + total payments

21
Q

How do we calculate a payment ?

A

Total of cash flow - other payments

22
Q

How do we calculate Total payments ?

A

Net cash flow - receipts

Or add total payments all up

23
Q

How do we calculate net cash flow?

A

Total payments - receipts

Or closing balance- opening balance

24
Q

How do you calculate closing balance

A

Net cash flow + opening balance

25
Q

What are the 4 things that are importance with cash ?

A

Pay suppliers and other debts

Pay employers

Repay bank loans

Buy raw materials to sell products to customers

26
Q

What is cash ?

A

NOT PROFIT
given amount of many available to business to pay existing debt - revenue is recorded before receiving actual cash

27
Q

What are the short sources of finance ?

A

Overdraft - getting small sums of money from bank and repaying it’s in a short time

Positive - can be repaid quickly and adds positive cash flow

Negative - high interest

Trade credit- buy now pay later

Negative - could effect good will if fail to pay may ruin relationship with suppliers and you lose best raw materials with good price

Positives- frees up cash flow

28
Q

What are the long term sources of finance ? What are the positives and negatives ?

A

Personal savings - you take money from your personal account positives - get it when you want and how much negative - it may effect your life - CANT go on holiday

Share capital - sell shares in return for capital - p- good business exposure n- can dilute ownership

Loan- asking for money from the bank with interest p- secure most banks have start up loans especially for businesses
N- interest may be unable to pay back, reflecting on your credit score

Retained profit - saving money from the businesses profit p- available whenever N- takes a while to make

Crowd funding - setting up a go fund me page for the public to invest small amounts of money into your business p- free
N- takes a while and you may be unable to reach target within deadline - lose all money

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