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1.3 - Coggle Diagram

- - - - S- specific (must be detailed and focused around the businesses)
      - M- measurable (must be recordable so that progress can be monitored)
      - A- agreed (must be agreed between all owners)
      - R- reasonable (must be achievable within a modern setting)
      - T- Timed (a time scale must be allocated to measure when the objective should be achieved)
  - - - Survival- for a start up business the aim is to remain operational possibly breaking even or making a small loss so that they can continue to invest
      - Market Share increase- A business may choose to grow and occupy a greater amount of the market e.g inorganic and organic methods
      - Breaking even- A business' revenue will equal their costs (Moreover, looking to create a profit margin)
      - Increasing sales- This will make more revenue and initiate growth.
    - - Social objectives/making a difference- The business aims to improve a practice or local community either being charitable or benefiting the environment etc. (despite the costs incurred)
      - Independence/Self-satisfaction- An owner may wish to be satisfied with the skills they have applied and learnt (allowing them to develop themselves)
      - Challenge/Control- An entrepreneur looks for the business to be challenging and develop their skills alongside being their own boss
- - - - Require a good relationship with suppliers and if payment takes longer than planned relationship could be lost.
      - Only a short-term method
    - - Interest will need to be paid alongside the repayments which can lead to further financial difficulties in the future.
    - - Requires (generally) 24hr repayments with very high interest rates.
    - - Selling assests
      - Redundancies
      - Reducing business operations e.g closing a warehouse temporarily
    - - Cash flow monitoring and prediction for e.g 12 months can help understand whether investments can be made alongside whether any strategies need to be implemented
- - - - BEP in units = (fixed costs/selling price-variable costs)
      - In costs (revenue needed) = (x selling price)
      - BEP is the point at which total costs (Fixed + variable) intercepts the revenue line
      - Profit/Loss: (Using graph) Find point of revenue on graph, if below BEP then making a loss (vica versa)
      - Margin of safety: (if making a profit) Current level of output - BEP in units (adjust for costs via Revenue - BEP in costs)
- - - - Positive- Allows the business to maintain its level of output yet better manage its costs therefore increasing net cash flow
      - Negative- Requires the business to have a good repore with suppliers and the trust can easily be broken
      - Negative- Will only be effective over a short-term period therefore not suitable for big investments
    - - Positive- Quick to use and access capital therefore can account for u expected payments
      - Negative- Typically requires repayment within a very short period and carries high interest rates leading to further financial issues.
  - - - Personal savings- An entrepreneur will invest their own saved money typically to start a business or account for lack of revenue
        
        Positive- Does not require interest to be paid therefore all capital goes forward to maximising the business
        
        Negative- Exhaustive source of capital ("once its gone its gone")
      - Retained profit- The profit accrued from good business performance
        
        Same as above
        
        Positive- Typically larger source of finance compared to personal savings therefore better used for large investments
    - - Venture Capital- When a group of venture capitalists will invest in a risk business to gain a potion of the agreed profit
        
        Positive- The business can access a large amount of capital (ideal for start-ups)
      - Share capital- When shares are sold on either the stock market (PLCs) or family and friends (LTDs)
        
        Positive- The business gains a large scale permanente amount of capital as shares cannot be refunded and typically are of high value.
        
        Negative- The business' ownership is diluted therefore decision-making takes longer alongside a greater risk of takeover (as the founders may not own a majority (>50%) share)
    - - Positives- The business can access a large amount of capital in a short period of time (allowing for rapid investment)
      - Negative- The business will need to pay interest on the loan alongside repayments which could lead to debt or financial difficulties in the future.
      - Negative- The business may need to use some of its assets as collateral for the loan therefore losing previous investment and decreasing the efficiency of business' operations in times of hardship.
    - - Positive- Large amounts of capital can be accrued
      - Positive- Interest does not need to paid
      - Positive- As potential customers invest they increase the business' brand exposure and excitement increasing the likelihood of revenue in the short-term and reducing the business need to invest in marketing
      - Negative- No guarantee that the funding target will be met