Finance
You need to find sources of finance to enable you to fund the start up of your business
Finance can be from:
- Family and friends
- Bank – loans, overdrafts etc
- Investment
Location
Location can be key to business success. Need to ensure that costs are not too high.
Businesses also need to consider:
- Proximity to customers
- Proximity to market Infrastructure
Often small firms are unable to afford the best location or the best location may be unavailable putting them at a disadvantage
Building a customer base
- The business needs to generate sufficient demand for their products
- To do this they need to ensure the marketing mix is correct for their target market
Cash Flow
- Cash flow measures cash inflows – cash outflows of a business
- Businesses need to ensure that they have sufficient cash or working capital to pay their day to day expenses
- A new business will formulate a cash flow forecast which is a prediction of future cash flow
- The cash flow forecast can be used to obtain sources of finance e.g. loans from banks
Business Plan
A business plan sets out what you want to achieve it includes:
- objectives
- financial projections
- market analysis
These allow the business to think about what they are doing It can be used to raise finance for the business
