2.1 growing

• 2.1.1 Business Growth Methods:

  • Internal Growth (Organic Growth): Business grows through its own operations, such as launching new products, improving existing products, or expanding through locations
  • External Growth (Inorganic Growth): Involves mergers or takeovers with other businesses outside of the company
• Internal Growth:

  • Growth through internal operations and expansion
  • Examples include launching new products, improving existing products, and expanding through new locations
• External Growth:

  • Involves mergers or takeovers with other businesses
  • Mergers: Two businesses combine to form a new entity
  • Takeovers: One business buys another, integrating it into its operations
• Comparison:

  • Internal growth offers more control but is slower
  • External growth is quicker but often more expensive due to acquiring existing operations and brand loyalty
• Sources of Finance for Growth:

  • Internal Sources: Owner's funds, retained profit, sale of assets
  • External Sources: Share capital (private or public limited company) and loan capital (overdrafts, bank loans)
• Internal Sources of Finance:

  • Owner's Funds: Money invested by the owner into the business
  • Retained Profit: Profits from previous years used for growth
  • Sale of Assets: Selling unused business assets to fund growth
• External Sources of Finance:

  • Share Capital: Selling ownership shares to investors
  • Loan Capital: Obtained through bank loans or overdrafts
• Share Capital:

  • Private Limited Company: Shares sold through private agreements
  • Public Limited Company: Shares sold on the stock market, involving an initial public offering (IPO)
• Loan Capital:

  • Bank Loan: Borrowed sum repaid over time with interest
  • Overdraft: Allows a negative bank balance for a short period, with charges and interest if not repaid promptly
• Overdrafts can be useful in the short term when you need to pay a cost or buy supplies but can't afford it immediately
• Aim: the long-term goal for a business. Objective: the targets that help a business achieve its aim
• Objectives of a business can change due to factors like market conditions, technology, performance, legislation, and internal reasons
• A small business initially focuses on survival, then moves towards growth, potentially entering or exiting markets
• Globalization impacts businesses by introducing concepts like imports, exports, multinational companies, and the ability to compete globally
• 1. commerce and instant communication have made it easier for businesses to compete globally
• Businesses may need to adapt their marketing mix when selling into different countries to match what the market is looking for
• Barriers to trade include tariffs (tax on imports) and quotas (limits on imports)
• Trade blocks are groups of countries with regional free trade agreements, like the European Union
• Ethics in business involve fair treatment of stakeholders, positive impact on the community, and using ethical suppliers
• Environmental considerations in business include sustainability, reducing plastic use, and minimizing emissions and pollution
• There is a tradeoff between ethics and profit in business decisions, as ethical practices can be more expensive
• Pressure groups are organizations that pressure businesses or governments for change, impacting brand reputation
• BENEFIT OF PUBLIC LIMITED COMPANY

  . Finance through share capital

  . Limited liability

  . reliable

  . great public awareness
• Drawbacks of Public limited company

  . Risk of potential takeovers

  . Less privacy over financial performance

  . influence on decision making by external shareholders
• Reasons for trade barriers

  . Protecting job in domestic industries

  . protecting emerging industries

  .preventing the dumping of cheap goods on domestic market

  .raising revenue from tariffs