2.1 raising finance

what are the three internal ways to raise finance

owners capital

retained profits

sale of assets

what is owners capital

investment made by the owner in a business

what are retained profits

money made by the buisness, put back into it

whats an internal way to raise finance

sale of assets

sources of external finance

family and friends

peer to peer funding

banks

methods external finance

loan

share capital

overdraft

whats limited liability

business owner is only liable for their original investment should the business fall into debt

whats unlimited liability

if a business has debts the owner must pay even if this means selling their own possessions to find the money 

whats a business plan

document which sets out the future plans for a business

whats the cash flow forecast

day-to-day running of a business budget

benefits of cash flow forecast

better planning for future

more efficient management

disadvantages of cash flow forecast

only an estimate

doesnt show full picture of business