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Business Revision - Coggle Diagram
Business Revision
sources of finance - loaf
Selling assess - assets which are no longer required by the business
friends and family - money is invested from the people that the owner knows
share issues - this is only possible with limited companies where shareholders can be invited or share cans be sold on the stock market
loans - from a bank or from family and friends. Banks with expect monthly repayments which include interest
retained profit - profits kept bu the business to reinvest in it after owners have taken their share
overdraft - where a bank allows a firm to take out more money than in its bank account
owners fund - owners invest moeny in the business
hire purchase - where monthly payments are made for use of equipment such as a car. The equipment is owned by the firm after the final payment
leasing - leased equipment is rented and not owned by the firm
trade credit - where suppliers deliver goods now and are willing to wait for number of days before payment
Government grants (local national and European) - from charities or the government to help business get started , especially in areas of high unemployment. The business is not expected to repay these
Venture capital and business angels - individuals offer to invest in a business in return for a % of a business ownership and profit.
Why does a business need finance? - bratts
trade
expand
bills
training
rent
staff wages or salorys
advertising
supply raw materials
invest in new products
customer service - parcs
product knowledge
respond to customer feedback
customer engagement ( communication )
speed of service
after sales service
partnerships - business that is owned by a minimum of 2 and a maximum of 20 individuals
pros- potential for more finance, shared workload, specialise in expertise , partners industry contacts
cons- unlimited liability, shared profits, shared decision/making control
growth/integration
horzontal - one firms joins another firm at same stage of supply chain,
vertical -
location - think recipe Raw materials, Employment, Competitors, Infrastructure, Proximity 2 target markets , Finance
Methods of production - just bake flowers
batch - groups of items made together
flow - continuous
job - made individually
internal and external sources of finance
internal - finance from within the business (owners funds,retained profit and selling assets)
external - finance from outside the business
private limited company
ldt is a company owned by its shareholders managed by a director
pros - limited liability,additional sources of finiance,control of who shareholders,
cons - no access to stock exchange, shared profits, legal requirement to publish financial accounts
entrepreneurs
is an individual who takes on risks to hopefully gain an award
Recruitment
job analysis, job description, person specification, selection methods
Pay
basic pay, salaries, piece rates, wages, overtime,fringe benefit , commissions, net pay or earnings, bonus