Business - Exam Notes

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  • Business Exam - A Flying Start
    • Pros and Cons
      • Pros
        • Sheena is a highly qualified pilot and holds a Comercial Pilot License
          • Worked in the RAF
            • Unique Selling Point
          • Doesn't need to hire pilots
        • Her father is a highly successful and wealthy businessman
          • Could offer advice to Sheena
          • Has contacts in the business world
        • The business will be in Surrey
          • Very afluent area
        • 48% of the the set up costs would be coming from inside the family
          • 25% from her father
          • 23% from her own savings
      • Cons
        • 52% of the money will be external
          • Might leave the business with large debts
          • Interest rates are predicted to rise
        • Strong competition
          • Has more helicopters
          • Will be using the same aerodrome
        • High level of risk involved
          • £3m is required
          • Any accident can be fatal
        • 'Off-Period' will affect sales
          • Will affect loan repayment
        • Fluctuating costs
          • Price of oil is always changing
        • Has no experience as an entrepreneur
    • Sources of finance available
      • Family Loan
        • Roshan can lend the entirety of the needed funds
          • Relying on her father isn't true to her desires
        • Offered at zero interest
        • Doesn't have to sell shares
        • She wants to be fully independant
          • Relying on her father isn't true to her desires
      • Bank Loan
        • Sheena will keep control of the business
        • Low interest rates
        • S + R have put in over £1m
          • More likely to be accepted by the bank
        • Sheena has no track record
        • Drain on finance
        • UK interest rates forecast to rise in 2016
      • Own Savings
        • Sheena recieved a large inheritance of £675k
        • She's earnt £50k p.a
        • Less money needs to be borrowed
        • Her own funds aren't enough
          • Other sources will be needed
      • Share Capital
        • There would be nothing to pay back
        • If one investor buys 52% then they'd have more control than Sheena
      • Venture Capital
        • May be willing invest based on Sheena's piloting experience
        • Her father might know some VCs
        • Will try to expand the business
        • Risks losing control over the company
        • May be happy to not recieve money in the first few years
        • No high interest costs
    • Acronyms
      • Sources
        • By Forgetting Very Silly Sentences
          • Venture Capital
          • Family Loan
          • Savings
          • Bank Loan
          • Share Capital
      • Pros and Cons
        • Happy Fatties Like Chocolate
          • High Qualified
          • Father
          • Location
          • Capital
        • Every Flying Cadet Recieves Cool Medals
          • Market
          • Risky
          • Costs
          • Competitive
          • Experience
          • Finance
    • Calculations
      • Break Even
        • Contribution per unit
          • Divided by
            • Fixed Costs
          • Selling price minus the variable costs
        • Fixed Costs
    • Private Limited Company
      • Usually has a single director
      • Suitable for small familiy firms
      • Easier for the business to attract capital
        • Investors have limited liability
        • Will grow easier
      • Cannot advertise their shares for sale
        • Don't have their share prices quoted on the stock exchange
      • Pros and Cons
        • Obliged to publish some financial information
        • Relatively cheap and easy to establish
        • Cannot sell shares without approval of existing shareholders
        • The company benefits from limited liability
        • Able to raise finance by selling sharees

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