As Business Studies Unit 1 Revision Notes

Topics: Variable cost, Costs, Cost Pages: 28 (5838 words) Published: March 26, 2013
Unit 1 Business- Revision
* Enterprise- The ability to handle uncertainty and deal efficiently with change. * Entrepreneur- someone who has a flair for business ideas and has the confidence to take the risks involved in setting up a business. * Successful entrepreneurs:

* Passion
* Motivate people around them
* Determined to succeed
* Self-belief
* Common characteristics of successful entrepreneurs:
* Self-confidence- believe in your ideas; products and be able to motivate others. * Initiative- being prepared to start something.
* Hard working- not easy to set up a business.
* Creativity- inventing new products, finding new ways to do things. * Resilience- be prepared to redesigned and rethink, don’t let setbacks put you off. * Taking risks.

* Small Businesses:
* Less then 50 employees
* Value of sales less then £2.8 million
* Value of balance sheet is less then £1.4million * Why do people set up businesses?
* Be your own boss
* Work from home
* Help others
* Gap in market
* Redundancy
* Peruse a hobby
* Make money
* Risks:
* No job security
* Loose money
* Others could copy idea
* May not have regular income
* Debt
* Competition
* Demand for product falls
* Rewards:
* Enjoy
* Personal pride/satisfaction
* Satisfied customers
* Provide employment
* Benefit family
* Government Support
* Financial- grants, subsidies, tax cuts and loans. * Provide info and support- websites e.g. business link * Create enterprise zones
* Reduce regulation- red tape
* Revenue expenditure is every day expenditure – gas, electricity, paying suppliers for materials, petrol, wavers and salaries. * Capital expenditure is expenditure on assets- car, machinery and equipment. Sources of Finance

* Retained profit:
* Whatever profits the business makes is ploughed back into the business to make it grow. * Advantages
* Doesn’t have to be repaid
* No interest charges
* More the business grows, more of a profit you make * Disadvantages
* maybe limited- constrain rate of business expansion * may run out quickly
* still have to pay money back
* the more profit you put back into the business the less you get to keep * Sale of Assets
* Assets are the things the business owns.
* Where the business sells things of their own to raise money. * Advantages
* Get money but loose an asset
* Dispose of unused assets
* Get your money back straight away
* Finance development without extra borrowing * Disadvantages
* Costs money to transfer assets
* Taxed on capital gains
* Grow in value quicker than what the cash can yield elsewhere * Personal Sources (owners funds)
* Its money put into the business by the owner
* Advantages
* Doesn’t have to be repaid
* Immediately available and accessible
* Disadvantages
* If the business fails you’ve lost your own money * Bank Overdraft
* Balance of a bank account when funds withdrawn exceed funds deposited * Arranging a flexible loan on which the business can draw as necessary up to an agreed limit * Advantages

* Flexible- there when you need it, helps to maintain cash flow and you only borrow what you need. * Quick - Overdrafts are easy and quick to arrange, providing a good cash flow...
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