1.3- putting idea innto practice

• what is business aims


  aims are overall goals they want to achieve
• 5 financial aims a business have


  survivial

  maximise profit

  increase market share

  maximise sale

  financial security
• state 3 non financial aims


  what is right for society

  personal satisfaction

  independance
• what is market share


  proportion of sale within a market that is controlled by a business
• What is revenue 


  income earned by a business
• how to calcualate revenue ?


  revenue=quantity sold x price
• what are cost?


  expenses paid out to run the business
• what is difference between fixed cost and variable cost?


  Fixed costs are expenses that remain the same no matter. Variable costs are any expenses that change based on how much a company produces and sells.
• how to find total cost?


  total cost= variable cost = fixed cost
• how to find variable cost?


  quantity sold x variable cost per unit
• how to calculate profit or loss?


  profit= revenue - cost
• examples of variabe cost

  raw materials

  bills

  labour
• example of fixed cost


  rent

  insurance

  tax
• cash is the money that a company can sell immediately
• cash flow is the flow of all money in and out of a business
• cash inflow is money that comes in
• cahs outflow is money that flows out
• a positive net cash flow means more money coming into the business than going out, while negative net cash flow means less money coming into the business than going out.
• net cash flow is the difference between cash inflows and outflows
• profit is the amount left over when revenue minus costs are subtracted from sales
• net profit is the total profit made by a business after tax has been paid
• cash flow forecast helps to anticiapte problems
• cash flow list all inflow and outflows
• An accurate cash flow forecast can provide insight into where your cash inflows are coming from and where your outflows are going out to for specific projects. 
• A cash flow forecast will also show how much money you have available at any given time, which allows you to make informed decisions about investing or expanding your business.
• Cash flow forecasting is important because it enables businesses to plan ahead and prepare for future events such as seasonal fluctuations, unexpected expenses, and changes in demand.
• two short term sources of finance


  trade credit

  overdrafts
• 4 long term sources


  loans

  retained profit

  personal saving

  share capital
• Overdrafts - an overdraft facility is provided by banks to enable firms to withdraw more money than they actually hold in their account. The bank charges interest on this amount until it is repaid.
• Trade Credit - when suppliers allow customers to pay them later than the agreed date on their invoice. This means that the customer has access to goods without having to pay immediately.
• Loan - A loan is a sum of money borrowed from a financial institution like a bank or other lender. Loans usually come with conditions attached, including repayment schedules and interest rates.
• retained profit are profit that the owners have decided to plough back into the business after theyve paid a dividend
• Share Capital - Share capital refers to the total value of shares issued by a company. When a firm issues shares, it receives cash from investors who become part-owners of the business. Shares may also offer dividends (a portion of the company's earnings) to its owners.
• What is the purpose of aims and objectives in business?

  To give businesses goals or targets
• How do aims and objectives differ in businesses?

  Aims are overall targets; objectives are steps
• What are the main types of business objectives?

  • Financial objectives
  • Non-financial objectives
• Why do aims and objectives differ between businesses?

  Businesses operate in different sectors and sizes
• What is the overall target or goal of a business called?

  Aim
• What does the term 'sector' refer to in business?

  Type of goods or services a business offers
• How do business objectives relate to business aims?

  Objectives are steps to achieve aims