Business - Exam Notes
- Created by: Firebolt60
- Created on: 28-04-15 09:43
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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
- Worked in the RAF
- 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
- Sheena is a highly qualified pilot and holds a Comercial Pilot License
- 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
- 52% of the money will be external
- Pros
- 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
- Roshan can lend the entirety of the needed funds
- 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
- Family Loan
- Acronyms
- Sources
- By Forgetting Very Silly Sentences
- Venture Capital
- Family Loan
- Savings
- Bank Loan
- Share Capital
- By Forgetting Very Silly Sentences
- Pros and Cons
- Happy Fatties Like Chocolate
- High Qualified
- Father
- Location
- Capital
- Every Flying Cadet Recieves Cool Medals
- Market
- Risky
- Costs
- Competitive
- Experience
- Finance
- Happy Fatties Like Chocolate
- Sources
- Calculations
- Break Even
- Contribution per unit
- Divided by
- Fixed Costs
- Selling price minus the variable costs
- Divided by
- Fixed Costs
- Contribution per unit
- Break Even
- 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
- Pros and Cons
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