Assessing Business Start-Ups

  • Created by: amy
  • Created on: 19-05-13 14:32

Key Terms

  • BUREAUCRACY- often referred to as 'red tape'. These are the rules and regulations that businesses have to abide by.
  • SME- a small or medium enterprise. The common abbreviation to describe small businesses.
  • SWOT ANALYSIS- an assessment of the strengths, weaknesses, opportunities and threats of a business, market or product.
  • FIXED CAPITAL- that is employed in assets of durable nature for repeated use over a long period.
  • WORKING CAPITAL- the cash available for day-to-day operations of an organization.
  • ECONOMIES OF SCALE- the reduction in long-run avearge and marginal costs arising from an increasae in size of an operating unit.
  • COLLATERAL or SECURITY- something pledged as security for repaymeent of a loan.
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Key Business Start-Up Objectives

  • Clear Objectives
  • Survive!
  • Manage Cash Flow
  • Gain Market Share
  • Invest Profits
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Key reasons for failure

  • Poor Cash Flow Management- one of the main reasons for business failure.
  • Inadequate Market Research- the market never stands still. are you still using the same research as a year ago or worse still no research at all?
  • Unexpected Changes to Demand or Costs- tastes and fashions might change fast or you might find changing economic factors raise your costs.
  • Strong Competition- the market leaders might be too powerful and the brand loyalty of customer too strong for you.
  • Poor Supply Chain- suppliers might let you down with no products to sell and angry customer 
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