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publicly held company
A company that is publicly owned and and has many shareholders who can buy and sell their shares through a stock exchange.
benefits of a publicly held company
finances can be raised through the sale of shares
risks can be spread out among a large number of stakeholders.
limited liability: if a business fails/incurs losses, personal assets of the shareholders are not at risk.
disadvantages of a publicly held company
shared profits between shareholders
high costs; time consuming to set up publicly held company.
loss of control; to the largest shareholder
break-even point
Break-even point is the level of sales at which total revenue equals total costs, resulting in neither profit nor loss. It is where the company covers all its expenses.
contribution
the difference between the selling price and variable cost of a product
what is outsourcing
Outsourcing is the practice of contracting out certain business functions or processes to third-party providers, often located in other countries, to reduce costs or improve efficiency.
what is offshoring
Offshoring is the practice of moving a company's business processes, such as manufacturing or services, to another country to take advantage of lower costs or other benefits.
what is insourcing
Insourcing is the practice of performing tasks internally within a company that could be outsourced to an external provider. It involves using the company's own resources and employees to complete the work.
what circumstance can cause a company to insource
A company may choose to insource due to factors like cost savings, quality control, confidentiality concerns, or strategic alignment with core competencies.
what circumstance could cause a company to outsource
A company may outsource due to cost savings, access to specialized skills, focus on core activities, increased efficiency, and global expansion opportunities.
benefits of offshoring
Offshoring can lead to cost savings due to lower labor costs in other countries.
It can provide access to a larger talent pool and specialized skills.
Offshoring can help companies operate 24/7 due to time zone differences.
It may also reduce the time to market for products and services.
what are the downsides of offshoring
Offshoring can lead to job losses in the home country.
Quality control issues may arise due to distance and communication barriers.
Cultural differences can impact productivity and collaboration.
Offshoring may result in data security risks.
what are the benefits of reshoring
Reshoring can lead to reduced transportation costs.
It can improve quality control and communication.
Reshoring can create jobs and boost the local economy.
average cost
cost per unit of production.
TC of production
number of units produced
“challenge”
factor that hinders the operations/profitability
company
a business owned by shareholders (have limited liability). legal separate entities.
contract
legally binding agreement between two parties. sets out certain terms and conditions.
costs
expenditure of a business when producing goods/services
directors
senior executives in an organization. they hold autonomous, decision-making, responsibility and power.
employees
internal stakeholder
environmental sustainability
the ability for the business to maintain the use of its resources for future generations. meeting the needs of today without jeopardizing the needs of future generations.
expansion
the growth of a business due to increased size/growth in the market. measured by increase: sales revenue, market share, profits.
finances
funds needed for business activities.
how may location of a business affect its profitability
The location of a business can impact profitability through factors like access to customers, labor availability, competition, costs, and regulations.
advantages of businesses using credit cards
Convenience: Credit cards offer quick and easy payment options.
Cash Flow Management: Helps businesses manage cash flow effectively.
Rewards and Perks: Earn rewards and benefits on purchases.
Build Credit: Establish and improve business credit history.
Security: Offers fraud protection and dispute resolution.
what is a cashflow forecast
A cash flow forecast is a financial document that predicts the inflows and outflows of cash in a business over a specific period, helping to manage liquidity and make informed financial decisions.
what are the benefits of a cash flow forecast
Benefits of a Cash Flow Forecast:
Helps in managing liquidity
Assists in planning for future financial needs
Enables better decision-making
Identifies potential cash shortages
Aids in setting realistic financial goals
what is a freelancer
A freelancer is a self-employed individual who offers services to clients on a project basis, without being bound to a single employer.
what are the benefits of segmentation
Segmentation helps target specific customer groups
Allows for personalized marketing strategies
Enhances customer satisfaction and loyalty
Improves product development and innovation
Increases overall profitability and competitiveness
why are unique selling points important
Unique selling points (USPs) are important because they differentiate a product or service from competitors, attract customers, and create a competitive advantage.
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