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1.3 Putting a business idea into practice. Aim: Overall goal a business sets Objective Smaller tasks that contribute to the aim financial objectives - Survival - Sales & sales revenue Profit Markest share - Financial security. Businesses have unique and individual aims and objectives. Loss Non financial - Personal satisfaction -Independence & control -challenge -Social benefits & goals - Customer satisfaction - Business recognition. 1 Reciepts (E) Raw materials Fixed costs other costs 1 1 Margin Sapets 1 Total revenue Profil Actual output Jan Feb Mar 10,000 8500 15,000 2000 2500 3600 4000 4000 4000 So 00 5200 5900 Total payments 11,000 11,700 13,500 Net cash flo -1000-3200 1500 Opening balance 500 -500-3700 Closing balance-500-3700-2200 Total costs fixed costs Equations: Revenue = Price x Quantity Variable Cost of x Quantity produced costs one unit Total costs: fixed + Vanable costs costs Profit= = > Output = Cash flow Money flowing into and out of a business Cash flow forecast - Predicts how cash will flow through a business over time. Example: = Sales revenue Interest() = Total repayment-amount X 100 Borrowed amount BEO fixed costs -(input) Raw materials, fixed and other costs are in total payment (output) Sales price -Vanable cost Margin of Actual output - Breakeven safety : output Pay Suppliers Cost of Sales Borrowed Prevent insohency Importance of cash to a business Pay Pay overheads employees Subtract the total Outputs from the total inputs or opening balance add closing balance the difference between cash and profit Shortterm finance = Paid back immediately or quite quickly Long term finance: Paid back over a longer time like many years Short term-Overdraft - Trade credit savings -Venture Capital - Share capital - Loans - Retained profit - Crowd funding Long term: - Personal

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