1.3 Putting idea into practice Flashcards
Aims
A general statement of where the business is heading.
Objectives
A clear, measureable goal, so success and failure is clear to see.
SMART Objectives
Targets that are specific, measureable, achievable, realistic and time-related.
Market share
The percentage of a market had by one business.
Survival
Keeping a business going, which ultimately depends on determination and cash.
Revenue
The total value of sales made within a set period, such as a month.
Total costs
All the costs for a set period of time, such as a month.
Fixed costs
Costs that do not vary with output, such as rent.
Variable costs
Costs that vary as output varies, such as raw materials.
Profit
The difference between revenue and total costs; if the figure is negative the business is making a loss.
Break even
The level of sales at which total costs are equal to total revenue. At this point neither a profit nor loss will be made.
Break even chart
A graph showing a business’ revenue and total costs at possible levels of out.
Margin of safety
The amount by which demand can fall before the business starts making losses
Cash
The money a business holds in notes and coins, and in its bank accounts
Cash flow
The movement of money into and out of the firm’s bank account.
Overdraft
The amount of the agreed overdraft that a business uses.
Insolvency
When a business lacks the cash to pay its debts.
Cash flow forecast
Estimating the likely flows of cash over the coming months and, therefore, the overall state of one’s bank balance.
Opening balance
The amount of cash in the bank at the start of the month.
Closing balance
The amount of cash in the bank at the start of the month
Net cash flow
Cash in minus cash out over the course of a month
Negative cash flow
When cash outflows are greater than cash inflows.
Crowd funding
Raising capital online from many small investors.
Retained profit
Profit kept within the business. The best sort of finance for expansion
