...P4 Describe financial aspects that affect the start-up of your business. Start-up costs Start-up costs are the expenses incurred during the process of creating a new business. All businesses are different, and can require different types of start-up costs. In order for a business to survive, start-up costs need to be kept as low as possible. Business owner has to make list of start-up costs. Using a list of start-up costs a business owner would then create a personal survival budget. For my business idea that is in school café I should still keep start-up costs low, but as far as it is in school I don’t have to worry about the equipment for my business, because they already have kitchen to work in and café to sell my products. However I still have to pay the rent and I need resources to start with – stock. Personal survival budget In order for your business to survive, you need to have enough money to cover all your start-up costs, the costs of running the business and also for you to live on. This section looks at how to determine your personal survival budget. I think my business would not affect my personal survival budget too much, because I don’t have to buy all the equipment like ovens, fridges, etc. As far as I have to worry mostly about the stock for my business. Cost of premises Choosing appropriate premises is crucial to the success of a business. Business owners then have to decide whether they want to rent or buy premises. For place they have to pay rates...
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...AQA AS Business Studies Unit1 (BUSS1) Course Companion AQA AS Business Studies Unit 1 (BUSS1) Course Companion Publishers Information AQA AS Business Studies Unit 1 Course Companion 1st Edition August 2008 Author: Jim Riley © Tutor2u Limited All Rights Reserved No part of this material may be reproduced in whole or in part without the express written permission of Tutor2u Limited. This publication is not endorsed or approved by AQA. Tutor2u Limited Boston House 214 High Street Boston Spa LS23 6AD Please contact jimriley@tutor2u.net with details of any errors, omissions or suggestions for future editions. © Tutor2u Limited All Rights Reserved www.tutor2u.net AQA AS Business Studies Unit 1 (BUSS1) Course Companion Contents Introduction to AQA AS Business Unit 1 .....................................................................6 Section 1: Starting a Business ......................................................................................7 Enterprise and Entrepreneurs .......................................................................................8 Introduction ......................................................................................................................................... 8 Entrepreneurs ..................................................................................................................................... 9 Motives for starting a business ................................................................
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...difference between start-up and operating costs, variable and fixed costs. Introduction I have started this unit talking amongst my classmates discussing the differences between theses costs start-up, operating, variable and fixed costs. In this unit I will be explaining the differences between them. Define start-up costs, operating costs, fixed costs and variable costs Start-up costs- it means if the start-up costs are incurred before a business can start to operate, such as the deposit on rented property, and the purchase of equipment and initial stock. Operating costs- refers to the money that is spent when the business is running, it is the everyday costs. Fixed costs- costs that will not charge regardless of how much the business sells. Fixed costs are costs that do not vary depending on production or sales levels. Variable costs- these costs are linked to the number of items sold. A cost that is directly proportional to the volume of output produced. When production is zero, the variable cost is equal to zero. Explain the difference start-up and operating costs provide examples of each Start up costs are the things you are going to need to get the business going i.e. premises, furniture, IT, registration with local authorities, stock / materials etc. These are mainly one off payments that do not reoccur. Operation costs are the day to day costs of running the business usually calculated in terms of monthly or annual costs. These costs will be for...
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...Unit 17 Starting a Small Business P4- Explain the financial aspects that will affect the start-up of your business My business is a dance studio and these are the financial aspects that will affect the start-up of my business are: * Start-up costs * Operating costs * Fixed costs * Variable costs * Revenue * Profit and Loss account * Balance Sheet * Cash flow Forecast 1. Start-up Costs Start-up costs are the costs incurred before the business starts to operate. 2. Operating Costs 3. Fixed Costs Fixed costs are the costs that do not vary in relation to the number of items produced. Also known as indirect costs. 4. Variable Costs Variable costs are the money paid out in direct proportion to the number of items produced and sold. Also known as direct costs. 5. Revenue Revenue is the total amount of money that are going into the business. 6. Profit and Loss Account Profit and Loss account shows if the business is successful or not based on if it’s making profit or loss. It shows where the things with the business are going wrong and if the business make loss, and how and what you need to change to help your business. I need to use profit and loss account for my business because its helping me to deal with the business and to save it if its making loss, as it shows me what I need to change so my business become a successful. 7. Balance Sheet 8. Cash flow Forecast Cash flow forecasting means budgeting, spending with a limit and estimating...
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...Plan Small Business Finances Assessment 1: Simulated Workplace Scenario: Introduction: For the case of this task, I will be simulating that I have invested my life savings to start a small business, that of a bakery. Having had previous skills in this industry, and already locating an ideal position with minimal competition, I will now undertake a number of financial projections for the business, with the end goal being to obtain finance to help with the start-up costs. The document will cover aspects as follows: Part A: • All costs, fixed and variable, relating to the start-up and general running of the business. • Prices of goods based off of costs and profit margin. • Break even sales points. • Pricing strategies related to market conditions. • Projected profit statement. Part B: • Set profit targets/goals. • Identify working capital requirements. • Identify asset requirements and asset management strategies. • Prepare cash flow projections. • Identify capital investment requirements. • Select budget targets and monitor financial performance. Part C: • Start-up and ongoing financial requirements • Sources of potential finance. • Cost of securing finance and strategies in order to obtain it. Part A: Research: The general running of the business will be done by myself and 2 full time employees, from a single location, operating 6 days a week, Monday through Saturday. The initial set up costs for the location, including 2 months of upfront rent and a...
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...Definition of start-up costs and organizational costs: Start-up costs are costs for setting up or investigating the creation or acquisition of a business. Start-up costs include any amounts paid or incurred in connection with an activity engaged in for profit or for the production of income in anticipation of the activity becoming a business. Organizational costs include the costs of creating a corporation. Start-up expenditures and the costs of organizing corporations and partnerships generally cannot be claimed as a current tax deduction, but there is a limited current deduction for start-up expenditures. Source: www.Lawyers.comsm Amortization of organizational costs: Start-Up Costs and Organizational costs can be amortized over a minimum period of five years. The amortization period begins the month you started doing business. However, you must elect to do so on the tax return you are filing, otherwise you will not be able to recover their cost until you sell or dispose of the business. The election must be made by the due date of the return, including extensions, and is accomplished by attaching a statement to the return showing information such as the type of expense, date incurred, and amortization period. Source: John W. Day. STARTING OR BUYING A NEW BUSINESS.2008 <http://www.reallifeaccounting.com/pubs/Article_Theme_Starting_or_Buying_a_New_Business.pdf > Solution (my opinion): According to the above-mentioned, organization costs can be amortized...
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...Small Business Administration, there were 27.2 million small businesses in the United States in 2007. Small business can be defined in different ways. The U.S. Government agency that helps people start businesses is the Small Business Administration or SBA. It categorizes a business in the United States as small if it has fewer than 500 employees. The international community uses the term small and medium enterprise or SME, instead of small business. Among SMEs, small enterprises have 1 to 50 people, while medium enterprises have 51 to 500 people. Whereas on owner-managed small businesses of 1–50 people and places greater emphasis on the lower end of the range. Independent and owner-managed small business means that the business is owned by an individual or small group rather than existing as part of a larger enterprise or a business whose stock can be bought on an exchange. Owner-management refers to constant or at least daily management of a business by its owner. It is possible to become an absentee owner, who profits from a business but is not involved in its day-to-day operations. This, however, is a different type of business with different problems from those of firms run by an owner manager. Small businesses are imitative in nature, with most small firms doing what other firms do, with only slight variations. But when we think about the people who start firms for the first time, the situations they face are situations of novelty. The purpose of a small business is to create...
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...Lean Start-Ups and Creating an Entrepreneurial, Innovating Economy Missouri Southern State University Abstract Whenever a new venture creation business starts, whether it be a brand new company to a previously established business looking to expand its horizons, failure is almost inevitable. But, thanks to the lean start-up business model, success rates have been increasing and showing great results. The lean business model provides, in a way, a safety net during the testing the hypotheses stages of a new venture to where if failure is detected, corrective action can be taken immediately with minimal risk involved due to testing. In today’s economy, employment can be tricky, thus creating an environment where new venture creation along with a lean business model can help to create an entrepreneurial, innovating economy. Lean Start-Ups and Creating an Entrepreneurial, Innovating Lean start-ups are becoming more popular, spreading from just young tech ventures to big, already established companies due to better rates of success compared to traditional business models. When companies use lean business models, they lead the way for an economy that becomes based off of innovation. This paper will discuss lean start-ups and the process of creating an entrepreneurial, innovating economy. Schemerhorn and Bachrach (2015) states three stages to the life cycles of entrepreneurial firms that all entrepreneurs encounter. Those stages being the birth, breakthrough and maturity...
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...a fast food eaten in their own sport events with American hot dogs whish is consumed during the football games. Business Plan Founders of the company Anna Amphlett and Andrew Ferris came up with the idea to start producing hot pies in US, Seattle after their very first visit to Australia. To start such a business with the shortage of financial resources Amphlett together with Ferris planed to take loan from the Bank that has very good contacts with Ferris who was their prior employee for while. For the loan giving there are some required documents that Bank needs to complete Business Plan, Cash Flow, Balance Sheet and Income statement. One of the main intentions of preparing a business plan is a initial move of commencing a business, to locate the answer the fundamental and investigative questions of what amount of capital it will be required to start the plan (Berry, 2011). Section 2: Financial Analyses Success Factors of Aussie Business There are 3 very important success indicators needs to be analyzed and taken into consideration: * Cash Management * Product Development * Retaining Customers (“Saas Matrics”, 2013). As per Seabury (2009) in order to gain success in today’s growing business, each businessperson needs to be flexible and have very good organizational and projection skills and if we will analyze the company’s business plan according to SWOT analysis...
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...Please note - The titles used in this document provide a clear structure to your business plan. You may choose to make minor changes to suit your particular situation. Name: Business Plan for: (Please use this template in conjunction with the guide Prepare a business plan, where you will find information about how to use your business plan as well as instructions on how to use this template) |Document Version: | | |Date: | | |Completed by: | | Business plan contents Executive summary 4 1 Executive summary 4 2 Business details 5 3 Key personnel 6 Vision 8 4 The business idea 8 5 Business goals 9 6 What the business does 10 7 What makes the business different 11 8 Legal requirements 12 Sales and marketing 13 9 Market research 13 10 Profiling customers 14 11 Profiling competitors 15 12 Managing market risks 16 13 Pricing 17 14 Promotion and advertising 18 Running the business 19 15 Staff 19 16 Premises 20 17 Suppliers 21 18 Equipment 22 19 Managing operational risks 23 Finance 24 20 Start-up costs 24 21 Profit and loss forecast 25 22 Sourcing finance 26 23 Managing financial...
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...legal form of business. There are several issues the investor is facing to begin a business such as little financial skills and no management skills and I will identify a few others. The two examples of the new technology ideas will be mentioned as requested by the spouse. A brief interpretation of the scenario issues will also be given. I will discuss the three business structures Sole Proprietorship, Partnership, and Corporation. The advantages and disadvantages of each business structure and I will provide examples so that these differences will be identified. In this manuscript all structures will be defined and researched and based on the scenario issues I will explain why I choose the Sole Proprietorship as the business structure that would be the most successful. In the final part of this project I will provide citations and aligned resources to support my decision. Individual Project Unit 1 In the scenario there is an inventor who has an idea for a new kind of home appliance that meets consumer needs. It is my interpretation that in this scenario inventor is facing a number of issues just like any other small inventor would be trying to start a business. These issues include having little financial skills and no management skills. The net worth wasn’t very high and that only meant that the inventor may not have any money for the start up cost. The inventor knew nothing about manufacturing other than the high cost to start a plant. The...
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... 4. Business Costs 5. Carrying on Business costs 6. Carrying on Business Costs 7. Cash flow forecasts 8. Financial documents 9. Carrying on financial documents 10. Carrying on financial documents 11. Managing business finances 12. Managing business finances Introduction In this assignment I will summarise the difference between start-up and running costs, which will include a table showing these. Along with, summarising the difference between fixed and variable costs which will also including a table showing these. I will then write a summary explaining the importance of the following: * Sales revenue * Calculating total revenue (unit sales price x number of units sold) * Gross and net profit * Maximising profits (increasing revenue and/or decreasing costs) Later I will then calculate the profit or loss for the first year, using the data in Project 3 and advise him as to how he can make his Business more profitable. Secondly, I will create a PowerPoint presentation showing the usefulness of break-even analysis. I will start by writing a detailed description of what is break even analysis and explain the reasons why break even analysis is important to a business. I will then construct a Break Even chart using the data given for Julian & Johns’ business. I will finish the presentation off by Analysing and explaining the effects of changes in costs/revenue in the Break Even chart when the variable costs increase...
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...Please note - The titles used in this document provide a clear structure to your business plan. You may choose to make minor changes to suit your particular situation. Name: Business Plan for: (Please use this template in conjunction with the guide Prepare a business plan, where you will find information about how to use your business plan as well as instructions on how to use this template) |Document Version: | | |Date: | | |Completed by: | | Business plan contents Executive summary 4 1 Executive summary 4 2 Business details 5 3 Key personnel 6 Vision 8 4 The business idea 8 5 Business goals 9 6 What the business does 10 7 What makes the business different 11 8 Legal requirements 12 Sales and marketing 13 9 Market research 13 10 Profiling customers 14 11 Profiling competitors 15 12 Managing market risks 16 13 Pricing 17 14 Promotion and advertising 18 Running the business 19 15 Staff 19 16 Premises 20 17 Suppliers 21 18 Equipment 22 19 Managing operational risks 23 Finance 24 20 Start-up costs 24 21 Profit and loss forecast 25 22 Sourcing finance 26 23 Managing financial...
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...Please note - The titles used in this document provide a clear structure to your business plan. You may choose to make minor changes to suit your particular situation. Name: Business Plan for: (Please use this template in conjunction with the guide Prepare a business plan, where you will find information about how to use your business plan as well as instructions on how to use this template) |Document Version: | | |Date: | | |Completed by: | | Business plan contents Executive summary 4 1 Executive summary 4 2 Business details 5 3 Key personnel 6 Vision 8 4 The business idea 8 5 Business goals 9 6 What the business does 10 7 What makes the business different 11 8 Legal requirements 12 Sales and marketing 13 9 Market research 13 10 Profiling customers 14 11 Profiling competitors 15 12 Managing market risks 16 13 Pricing 17 14 Promotion and advertising 18 Running the business 19 15 Staff 19 16 Premises 20 17 Suppliers 21 18 Equipment 22 19 Managing operational risks 23 Finance 24 20 Start-up costs 24 21 Profit and loss forecast 25 22 Sourcing finance 26 23 Managing financial...
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...Prepare a realistic initial plan for a business idea suitable for the local area. You need to prepare a realistic initial plan for a business idea suitable for the local area. This must include an individual rationale with supporting evidence. The supporting evidence will show appropriate research and detail and be appropriate for the local area. 1. Research possible gaps in the market. Give a list of the types of businesses that exist in the local area. Try and detail three services that are not currently offered in the local area that you think will be a success Businesses In The Area Businesses Not In The Local Area Coffee Shops (Costa, Café Nero, Starbucks) Juice Bars Restaurants (Prezzo, Urban Kitchen, Pizza Express) Salons (Waxing’s and Nails) Clothes Shops (Jack Wills, Fat Face, White Stuff) Larger Chain Stores (Topshop, Next, New Look) Home Shops (Home Living, The Shed, The Lemon Tree) Estate Agents Take-Away Shops (Pizza Hut, Papa Johns) Electrical Shops (PC World, Curry’s, Apple) Super-Markets (Morrison’s, M&S) Furniture Shops (IKEA) Hairdressers (RUSH) Jewellery Shops (Samuels) 2. Select a possible good or service: Features of your product; briefly explain what your product or service is going to be. My business is going to be a juice bar. The customer can choose their fruits/ingredients you put into the juice. The drink can be ordered to be take away or drink in. Trends in demand; what are the popular goods and services that people are buying...
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