1.3 putting a business idea into practice

Question 1

Main non-financial aims & objectives of starting a business (3)

Answer 1

personal satisfaction, control, fix social issues (global warming)

Question 2

main financial aims & objectives of starting a business

Answer 2

SURVIVAL ,profit, financial security

Question 3

Explain these long-term sources of finance:
1. personal funds
2.retained profit

Answer 3

1. own saved up money risked, immediately available
   2.profit from previous years used as fund, no interest, back-up cash

Question 4

Explain these long-term sources of finance:
3.share capital
4.crowd funding

Answer 4

3. selling shares in business (loosing complete control)
4. business uses donations or investments from crowds.

Question 5

Explain these long-term sources of finance:
5. bank loans
6. venture capital

Answer 5

5. money lent that is paid off with an interest
6. money invested by an entrepreneur/group that is willing to risk funding a new business in exchange for a agreed share of profit

Question 6

name all 6 long-term sources of finance

Answer 6

personal funds, retained profit, hare capital, crowd funding, bank-loans, venture capital

Question 7

explain the 2 main short-term sources of finance

Answer 7

overdraft- temporarily go into a negative bank balance but there are high levels of interest with time.
trade-credit- buy supplies now but pay back later with revenue. agreements with time limits