1.4.4

Question 1

sources of external finance

Answer 1

• bank loan
• bank overdraft
• crowdfunding
• share capital
• trade credit

Question 2

components of a business plan

Answer 2

• market research
• aims and objectives
• cash flow forecast
• details of produce service

Question 3

reasons why new business ideas come out

Answer 3

• products becoming obsolete
• changes in the wants and need of the customer
• changing technology

Question 4

sources of internal finance

Answer 4

• owners personal savings
• retained profit

Question 5

advantage of using break even analysis

Answer 5

• you know how many products need to be sold in order to break even and then make a profit

Question 6

purpose of a business plan

Answer 6

-Provides direction
-Supports decision making
-Helps establish the viability of the business
-To arrange a bank loan
-To seek investment
-To help the business be successful (More than 50% of new -businesses fail in first few years)