Business

• long line

  • total revenue
• straight line

  fixed costs
• short line

  Total costs
• Sources of finance for starting up an enterprise

  • Personal savings
  • Credit cards
• What is Premium pricing strategy

  Selling products at a high price
• Disadvantage of a business having premium pricing

  Enterprise will lose customers as they feel it is too expensive also customers may not be able to afford
• Disadvantage Trading online

  • Not everyone has access to shopping online as they don’t have a device
  • Will take up a lot of time of the owner to set up the website
• Advantages of Sales promotion

  • Attracts customers to buy the products
  • Increases sales therefore customers will buy the product more often
  • Helps to clear products and install new stock for the business
• Helping to pay for a local community fundraising event

  • Increases their brand image
  • Attracts customers to buy their products as they have done something positive
• Disadvantage of Government grant

  • May have restrictions on what the money can be spent on
  • Owner may have to pay the grant back through taxes
• Purpose of a Purchase order

  list of items purchased including pricing from someone
• Invoice

  a request of payment sent to a customer
• a Receipt

  a record of payment made by the customer
• Payment methods

  • Cash
  • Credit card
  • Debit card
• impacts of taking Cash payments

  • Safe storage
  • Too much cash may result in being short on cash
• Sales promotion types

  • Discounts
  • Buy one get one free
  • Competitions
• What is a Creditor

  A business that is owed money
• Direct debit

  A method of payment that is automatic
• Advantage of Direct debit

  Efficient for paying bills
• how to improve gross profit?

  To improve gross profit, a business should find cheaper suppliers
• Disadvantage of Inaccurate financial documents

  May cause problems with invoices leading to poor reputation, and can cause cash flow problems leading to a loss of profit
• Advantage of Accepting credit card payments

  • Improves customer service by offering more payment options, and allows for automatic transfers
• Advantage of Bank loan for equipment

  • Allows the business to easily purchase equipment, and can be arranged quickly
• What Methods can be used direct marketing

  • Direct mail - messaging customers directly
  • Leaflets/flyers
• Explain benefits of Calculating the break-even point

  • Provides a target for sales, and allows the business to identify any losses so they can take action
• explain benefits of offering direct debit as a method of payment

  • time saving as payments go through quickly.
• Cash flow forecast

  The prediction of cash inflows and outflows from the business
• Why is it important to know the margin of safety?

  
  

  Knowing the margin of safety is important to reduce the risk of loss and help the business survive
• Formula for total costs


  Fixed costs + variable costs
• Methods for promotion

  • Direct marketing
  • Sales promotion
  • Advertising
• Examples of above the line promotion

  • Radio
  • TV
  • Cinema
• Examples of below the line promotion

  • Sales promotion
  • Email
  • Newsletters