Business Managment Milestone 2

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What are the three primary categories of resources?

natural, labour, and capital.

What are natural resources?

Natural resources are items used by the business that come from the natural environment. These

include: land, water, oil, gold and raw materials.

What are labour resources?

Include any people (workers/staff) required to conduct business activities, and the

knowledge effort, and skills they bring to their work.

What are capital resources?

Capital resources refer to the tools and machinery that are used to produce goods or perform

services. Capital resources are important as they maximise the efficiency of labour.

What are the types of business locations?

Shopping centres, Retail shopping strips, Online, Home-based

What are the factors affecting choice of business location?

Visibility, Cost, Proximity to customers and suppliers, Proximity to competitors, Complementary businesses

What is financial resources?

Financial resources: Includes any amount of money needed to start up a business (establishing

costs) and conduct business activities (operating costs).

What are the sources of finance?

Self-funding and equity, Family or friends, Private

investors, Government Grants, Crowdfunding, Bank

Loan

What is Short term borrowing?

This type of borrowing is used to finance temporary shortages in cash flow or

finance working capital. Short-term borrowing generally needs to be repaid within one or

two years.

What is an example of short term borrowing

Bank overdraft : the bank allows a business or individual to overdraw their account up to

an agreed limit for a specified time, to help overcome a temporary cash shortfall.

What is long term borrowing?

This type of borrowing can be secured or unsecured, and interest rates are usually variable.

What is an example of long term borrowing?

Mortgage: A mortgage is a loan on a property,

secured by the property of the borrower (the

business). These loans are repaid, usually through

regular repayments, over an agreed period, such as

15 years.

What is a business support service?

Specialised person, facility or amenity

intended to assist and enhance the success of business activities

For legal and financial advice what are the people you should go for?

Solicitors: are lawyers that provide information about:

registrations, contracts, laws, business formation,

partnership agreements.

Accountants: provide advice on all financial management

issues and tax obligations.

Bank Managers: Advice on financial services, sources of

finance and basic business management.