Business Studies 'starting A Business'

Front 1

Types of business aims and objectives

Back 1

An aim or objective is a statement of what a business is trying to achieve over the next year.

Front 2

Business Targets: Survival

Back 2

Just surviving is the main and most important short term aim of all new businesses.

Front 3

Business Targets: Profit

Back 3

Most businesses will aim to make profit. This can take years for a new firm to achieve. Profitable firms are important for the economy because they create wealth creation.

Front 4

Business Targets: Growth

Back 4

Some firms aim to grow. could mean icreasing amount of employees, no. of products sold or income from sales.

Front 5

Business Targets: Market Share

Back 5

A business has not market share when it starts up. Needs to establish itself. This can be increased.

Front 6

Purpose of setting business objectives

Back 6

Helps staff to focus of shared aims. Different businesses have different objectives.

Front 7

SMART Targets

Back 7

All business objectives need to be SMART.

Front 8

SMART: S

Back 8

S=Specific. clearly state what is to be achieved e.g. increased profits.

Front 9

SMART: M

Back 9

M= Measurable. The desired outcome is a number value that can be measured. e.g. increase profits by 10%.

Front 10

SMART: A

Back 10

A=Agreed. All staff are involved in discussing and agreeing on an aim.

Front 11

SMART: R

Back 11

R=Realistic. The target is possible given the market conditions and the staff and financial resources available.

Front 12

SMART: T

Back 12

T=Timed. The target will be met within a period of time.

Front 13

Internal Stakeholder

Back 13

The people who work in the business. This means they are inside the business and involved daily (all kinds of employees).

Front 14

External Stakeholder

Back 14

These are people who don't work for the business and aren't involved in the day to day running. (Customers and local residents etc.)

Front 15

Examples of internal stakeholders

Back 15

-Employees
-Managers
-Owners
-Shareholders

Front 16

Examples of external stakeholders

Back 16

-Customers
-Suppliers
-Government
-Local community

Front 17

Purpose of business plans

Back 17

-Provides a sense of direction
-Helps to secure investment
-Predicts outcomes
-Measure performance
-Outline actions
-Define responsibilities

Front 18

THE MAIN SECTIONS WITHIN A BUSINESS START UP PLAN

Back 18

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Front 19

Aims/mission

Back 19

The goal of the firm

Front 20

People

Back 20

Skills of the management and workforce

Front 21

Product or workforce

Back 21

What the firm sells

Front 22

The Market

Back 22

Size of market; growth

Front 23

Competition

Back 23

How many other firms

Front 24

Marketing

Back 24

Price, Product, Promotion, Place

Front 25

Finance

Back 25

Where sources of funding come from

Front 26

Operations

Back 26

Location and the resources required

Front 27

Forecasts

Back 27

Costs, Revenue and Profits

Front 28

Risk

Back 28

The potential for loss in a business however, some risks must be taken in order to yield a reward.

Front 29

Uncertainty

Back 29

Not knowing what's going to happen in the future.

Front 30

Risk-taker

Back 30

A person who isn't fearful of uncertainty and may even enjoy risky situations. He/she will take a chance or gamble in the hope of winning.

Front 31

Unlimited liability

Back 31

If the business goes bust owing a huge amount of money, you may have to sell everything you own to pay off your debts.

Front 32

Sole Trader

Back 32

A business that is owned and controlled by one person although they may employ workers e.g newsagents

Front 33

Advantages of a sole trader

Back 33

-Small and easy to set up
-Wage bill will be low because there are little or no employees

Front 34

Disadvantages of a sole trader

Back 34

-Work long hours
-Nobody to share responsibility with.
-Risk of unlimited liability.

Front 35

Partnerships

Back 35

Partnerships are businesses owned by two or more people. A contract call a deed of partnership is normally drawn up.

Front 36

Advantages of Partnerships

Back 36

-Less pressure on individuals
-There's someone to consult over business decisions.

Front 37

Disadvantages of Partnerships

Back 37

-Not as much power/may have to consult others before making decisions
-Disputes over decisions
-Like a sole trader, has unlimited reliability.

Front 38

Private Limited Company (LTD)

Back 38

A company that can't sell shares to the general public. It isn't listed in the stock exchange.

Front 39

Advantages of LTD

Back 39

-Protection of the name
-Ability to bring in partners by selling them shares.
-Alot less paperwork and regulation.
-Separate VAT status for the company.

Front 40

Disadvantages of LTD

Back 40

-Can't sell shares to the general public
-All profits are taxed.
-Contracts tend to be more formal.
- You will be fined if you miss filing deadlines.

Front 41

Location: Availability of raw materials

Back 41

Need to build a factory near materials they need to keep transport costs at a minimum.

Front 42

Location: Transport

Back 42

Build factory near transportation (lorry depot, train station) to keep transport costs to a minimum and also needs to be transport links to and from the factory for workers.

Front 43

Location: Labour

Back 43

Needs to be near a populated area and somewhere where the business has employee interest.

Front 44

Location: Competition/other businesses

Back 44

Only build near competitors if you have the power/skill/product/money to challenge them with.

Front 45

Location: Technology

Back 45

You need to have the availability for technology so work life can be easier.

Front 46

Government and Location

Back 46

The government offers grants and assistance to businesses that locate in areas with high unemployment.

Front 47

Grants

Back 47

To help with the cost of setting up a business. Grants don't have to be repaid.

Front 48

Loans

Back 48

Loans are repayable over many years at lower rates of interest than the bank.

Front 49

Tax Breaks

Back 49

Firms may be made exempt from paying business rates.