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Business Theme 2 - Coggle Diagram
Business Theme 2
Financial planning
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Budgets- A financial plan which helps a business to designate money to certain parts of the business allowing them plan costs for the future
PROS- Financial plan, designate resources, helps to keep on top of goals and keep to time frames
CONS- lengthy process, does not take into account external factors and cannot predict shocks
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Raising Finance
External finance
Government grants- 'free gift' of money to small businesses
PROS- no interest or repayments
CONS- Small amounts of cash
Long process
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Venture capital- Business angel invests in business for % of the company
PROS- More opportunities
Can provide businesses with knowledge
CONS- lose control
fewer profits available
Overdraft- line of credit given to bank account so a business can go spend over the amount within their account
PROS- Flexibility, easy to arrange,
CONS- interest rates, can be withdrawn at short notice
Internal finance
Owners assets -This is the money that the owner of the business already has available
PROS- No payback
Quick and easy
CONS- High risk
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Retained profits- This is the businesses net earning
PROS- Does not have to be repaid
No interest in payable
CONS- Not available for new business
Business may not make enough
money to plough back
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