business notes

Added value - different between the selling price of a product and count of the raw materials used to make it

Increasing in the difference between the cost of purchasing bought materials and the price and the goods are sold

To add extra features to a product and the customer is willing to pay more after the value has be added

WAY OF ADDED VALUE

1. Creating a brand( brands represent quality and some times status )

2. Consumers are willing to pay more for products which have a strong brand attted to it for example why does of Nike selling better  then it puma ) because of its brand image. The difference is not that much

3. Advertisements - through advertising the business can create a strong brand loyalty ( have relationships with our customers) if you create good loyalty you can charge more for good and services

4. Providing customized services - business providing better personalized services to there consumers add more value. Consumers are willing to pay more customized services

5. Provide additional features - a product or service with additional features or functionality can make the consumers pay extra. This very often seen in a car model. For example Toyota has 12 version of its innovation models the basic engine and built is the same but the price increases as additional features are added

6. Offering convenience- consumer love convenience if you get a product or service without much  effort then you might pay a premium for it ( free home delivery of weekly groceries )

THE BENEFITS TO A BUSINESS OF ADDED VALUE

• the business can charge more to its customers this leads to more profitability for the business in the long run

• Through adde value the business can differentiate its self from its competitors. But added more value to the good and services a business can stand out among its competitors as product provideimg premium quality

• A business can sever the cost of advertising and other promotional activities once it had created a prespertion of high quality and and brand loyalty among its customers. That added value helps cost cutting in the long run

BUSINESS ENVIRONMENT

the business is ever changing so it’s flexible to always change

The internal  external environment

Internal environment

• the operating environment of the business

Elemels Of internet environment ( they are controllable )

1 .  Includes Same organization structure

1. Leadership and ,management style

2. Organizational resources

3. Vision ( how does the looks like ok )

4. Mission

5. Organization culture ( looking at there believe )

External environment

Market and micro environment

  Challenges for this environment are not easy to control. And the environment is dynamic.. it’s elements keep on changing

ELEMENTS

• physical environment

• Global or international environment

• Political environment

• Economic environment

Business environment is ever changing which is dynamic and the businesses must adaptive to the challenges and formulate strategies to copy with this challenges

WHAT A BUSINESS NEEDS TO SUCCEED

1 .  Labour is skilled or unskilled temporarily or permanent workers

2 the business land  required the side of builds renewable and non renewable goods resources to produce goods

1. Capital the business needs money factors and machinery

2. You need customers are agents which then purchases product made buy firms .

3. Supplier the business will raw materials or other services form other businesses

4. Government provide roads , foods , law and the business in one way or the other

WHY BUSINESS FAIL

1.poor planning, the business must set clear objectives aim full target that they seek to achieve

1. Lack of experience

2. Poor management new business owners  frequently lack business and management expertise such as finance , purchasing , selling production and hiring management employees

3. Insufficient funds

4. Poor location - a good business location may enable a struggling business to untimalety to survive and thrive and bad location would spoil disaster to even best management of enterprise

5. Poor stock management- to much of cash being block also the stock brings in additional cost burned of matinging it and storage and if we keep stock in the warehouse… the risk of it getting damaged

Examples of we keep food stock for long of it will expire and it because a lost to the business

1. Over investment in fixed  assiec like machinery these can’t be converted into cash

2. Poor credit arrangement management - business might take to much of debt and might find if difficult to services them. Poor credit arrangement , forward planning and cash flow problems might contribute to it

3. Personal use of business funds -owners  of small businesses usually don’t differentiate business funds and personal funds if

ROLES OF ENTREPRENEUR

is a person who is willing and able to create a new business idea or invention and that’s risks in perusing success

1. Successful entrepreneur can identify and pursue opportunities, they create value for customers and build thriving businesses

2. These individuals bring unique entrepreneurial sprint into the business which helps drive it forward and expand

3. Entrepreneurs fulfill important roles in business which are organized resources including finance facilities people( employees) and equipment

4. They make divisions at the starts and throughout the life of the business.

5. Taking risks to maximize returns and maintain at a competitive advantage.

WHAT DO ENTREPRENEURS DO

1. They gather and coordinate the resources necessary to start and operate a business

Example Michael dell his computer company in garage organizing resources such as computer, software tools and employees

1. They take  financial personal professional or  conceptual risks

Example : an entrepreneur can invest Life savings or a quit Secure job and start there own business

1. these risks can pay off with great rewards but the can also lead to failure and financial loss

INTRAPRENEUR

Is an individual task with creating or innovative products or processes within a already established business. Intrapreneurship evolves encouraging  employment to improve and think like entrepreneurs

1. The Business encourages them to take risks , innovate and develop new ideas and projects that may benefit the business.

1. Business can tap into the creative potential of there employees and generate new products or services or process that can drive growth and competitive advantage.

2. This helps to create a culture that generates a sense of ownership and engagement of more of employees which includes motivation and helps to retain help talent

3. To promote Intrapreneurs businesses may provide resources to employees or offer incentives or rewards to successful projects

4. Intrapreneurs for filled important roles in businesses that complement those  of a entrepreneur. Innovative including resources in the most effective way developing new ideas and processes can identify new techniques.

5. Organizing day to day decisions that drives a business forward  in pursuit in business owners to take calculated  cost and follow new parts

WHAT DO INTRAPRENURES DO

1. They find the best use of existing resources identifying new ideas and techniques and implement innovative processes

Example: an intrapreneur can I tend to find a used to reduce waste  in the production process

1. Intrapreneurs make on going decisions to ensure the business achieve its objectives

Example:

1. They Pursue it  by convincing business owners to the develop and introduce new products,  enter new market, and implement know new ways working

Example : an intrapreneur may pursue a business owner to launch a new product in a new market

THE CHARACTERISTICS OF ENTREPRENEUR AND INTRAPURNEURS

Entrepreneur and  intrapreneur‘s require a require a unique set of characteristics and skills

• commutation

• Team-working

• Problem solving

• Organization

• Information technology

characteristics

• they must be creative

• Hard working

• Must be risk taker ( nothing   ventured nothing gained )

• Entrepreneurs are innovators they usually identify the consumers needs and they are ever-changing

• Entrepreneur‘s must be self confident

• They must be dependable in the sense that they must be successful owners and must maintain a high standard

• They must have positive attitude ( it helps them to be strong )

• They must be resourceful

• Optimism ( looking forward to a better future)

BARRIERS OF INTRAPRENEUR

1. Make a decision to start up a business is rarely easy  They face a series of barriers that they must over come if they are a success of an enterprise

• lack of finances ( they my not to able to invest there own money in a business)

• Leander my be redundant to be able to approve loans due to the lack of a trading record

• They may also be unaware of grants or other available financial support for new businesses

• Lack of customers ( there is no guarantee that’s an unknown new business Will appeal to customers)

• Failure to attract customers to but it’s products means that a business is unlikely to survive

• Finding a sustainable location ( the best location are often to experience for new business) many entrepreneur run there business from their  own homes to minimize operating costs

• Lack of opportunities ( entrepreneur need to have good idea that has the potential to generate a profit , they also need time , experience and sufficient eidence to support there decisions to take the risk in pursuing it )

• Existing competition ( well known businesses that offer a similar product or service may already exist, competition is likely to have greater market knowledge and existing customer base as well as financial resources to invest in promotional activities )

RISK AND Uncertainties

Business Uncertainty’s is when a business can’t predict what is going to happen or Direct influence.

Factors that causes uncertainty

1. Environmental factors such as Japanese tsunami March 2011

2. Economic changes such as Covid lock down

3. Collapses in the backing system

4. The entry of new competitor

5. changes in local and national legislation ( laws )

6. Changes in the publical party government the country ( risks can measured allowing businesses owners to make informed decision before taking action. Research market inside and creating a business plan can help reduce risk

Entrepreneurs have barriers levels of risks they are willing to accept. Risks entrepreneur may prefer to start small and achieve slow growth . Entrepreneur may prefer to share risks with others in partnership or protect there personal aspects of forming a private limited company. Successful entrepreneur is can mange risk and quickly to unfraternity’s in the business environment.

BUSINESS , ENTERPRISE ABD THE DEVELOPMENT OF A COUNTY

Government policy also includes support to entrepreneurs to encourage them to set up new business or take steps to grow there business.

The government  recognizes the contribution  that small business make to the economy and offers a range of incentives to entrepreneurs in including

1. Training programs to equip businesses owners with skills they need to operate an enterprise

2. A streamlined an application process for low cost government low cost loans. Mentor invectives where entrepreneurs are partnered with expert who can provide advice on training and business development services

3. Examination from income tax and minimum wage law for a limited period

HOW SMALL BUSINESSES CONTRIBUTE TO A COUNTRY ECONOMIC DEVELOPMENT

Roles of business enterprise development of the country

1. Business enterprise providers employment

2. They pay taxes ( they income taxes)

3. Enterprise businesses increase the of the company the of domestic growth  products domestic Growth ( a measure of the total market value mangers value of financier total in a country at a given period time ( total market sales and how much we are obtained )

4. The satisfy the needs and wants of the people

5. They bring foreign currency if products sold the country ( reducing provety  levels )l

SOICAL ENTERPRISE

Is to a business with mainly social objectives that reinvest most of its profits in benefiting in society maximizing return to it owners. The primarily for social enterprise is the common goods( shared interest  sometimes is available and accessible to everyone in a society and benefits with in society

Ex : educational, roads, foods

They use the method and disciplined of business and the power of the marker place to advise there social environmental and human genders.

AIMS OF SOCIAL ENTERPRISE

1. they operate for the world being for society

2. Make profits is not main aim (the main aim is to solve social problems served by people) they aim at helping

3. Profit is kept to provide more services ( they normally provide health and education) it generates income through trade

THE MAIN OBJECTIVES OF SOICAL ENTERPRISE

This aims are often referred to as the triple bottom line . This line is used to measure the preforms of a business.

1. Economic ( profit that is economic)

2. Social ( people)

3. Environment ( planet ) to keep planet sustainable

BENEFITS OF SOICAL ENTERPRISE

1. Social enterprise put high Social returns or investment other.  One hand there produces direct measurable public benefits

1. Classical employment focus on Soical enterprise for example might services for public aims  Physical responsibility ( it reduces the margin cost of public support for people facing barriers by providing a pathway to economic self sufficient for those that are employed. Public safety makes the community in which of operates safer by disrupting cycles of proverrt trying. Incarcerations , chemical disaster, homeless safe

1. Economic opportunity it improves our pool of human capital and create job in communities in economic renewal

2. Social justice It gives a changes for those who are in need

BUSINESS STRUCTURES part 2

Economic sectors

  3 stages

Primary sectors

Secondary sectors

Tertiary sectors

Primary sector

The first stage of production all business which are related with a instruction of raw materials from Mother Nature such as mining , fishes , farming

Raw material that obstructed are then sent to the secondary factory with then deal with the processing or convertIng raw material into in to finishes good

Secondary sector

All businesses which manufacture and processes the raw materials which can be used by earn customers are known as secondary businesses. These include clothing , buildings ,  construction, computer Assembly , shoe factories

Tertiary sector

The one that provide provision of services take place to the  consumers

Transportation, banking , grocery store , education, show rooms , hotels

A business may exist in all three  sectors. For example the  British petroleum has its own oil well . It’s oil is a primary factor this oil is then  converted into petroleum and other buy products with is secondary and then after then processing oil into useable products, BT then sells it to the British consumers through it network of petroleum with falls under the tertiary

1. Some business might have a 3 economic sectors but usually some businesses only have one sector that they mainly focus on

PRIVATE AND PUBLIC SECTORS

Business organizations

Are classified into two public sector business and private sector business

PRIVATE SECTOR

This factor comprises businesses owned and controlled but individuals or groups of individuals. Some businesses are  commonly found in the free market economy. There main aim is to make profit throughs the selling private goods

Example: one sold trader, two partnerships, 3 private limited companies, 4 public limited companies, 5 cooperatives

SOLD TRADER

A sold trader is a business owned and controlled by one person, it is a one man business

Formation:

( there is no legal formalities required ( so there are no laws… )

Ownership:

it’s owned by one person

Legal status :

the business is not recognized as a legal person it is referred as an unincorporated business . The business and the owners are two on separate  equities  meaning that business is is liable to its debt and then the owner is liable to its debt

Liability:

the owner suffers from unlimited liability if the business fails the owners lose personal  property

Continuity:

( there so no continuation if the owner dies ) meaning the business

Tax issue:

it doesn’t doesn’t pay corporate taxes but it pays income taxes on the profits made

ADVANTAGES  of SOLD TRADE

1. It’s easy to form there less capital  investments and there’s no legal

2. The owner has direct control of the business mean you can make decisions by yourself

3. All profits goes to the owners

4. The owners had personal contact with customers

5. Also easy to quit the business

DISADVANTAGES

1. Unlimited liability ( the owners is personal for all debt in the business and pay )

2. Can raise lower capital investments ( they don’t have enough money to invest in the business)

3. Limited management expertise ( they don’t know how to manage to business)

4. Poor quality session making

5. Difficult in attracting. Quality employees

6. Lack of  continuing when the owner dies

PARTNERSHIP

Is when two or more but not more than 20 are will to start there own business

With shared capital investment and usually shared responsibility. To enter a partnership, partners can have a verbal agreement or ugliness

A partnership agreement includes:

1 . I’m out of capital contribution by each member

1. Salaries are wages that are paid to each member

2. Write an obligation of the partner

3. Procedure for partnership is the solutions

4. The name of firm ( the name of the business)

5. Date of writing

6. Duration of partnership

7. The business to be done ( what exactly you will be doing in the business )

Formation :

there are fewer legal formalities

Onwership:

Owned by everyone in that business

Legal status:

Unincorporated ( meaning the business and the owners are not legal separate)

Liability:

They suffer from limited liability

Countuity :

When the key partner dies,  the business may come to an end

ADVANTAGE

1 . Is easy to form

1. More capital is available

2. Diversity of skills and expertise

3. Decisions are made

4. Personal contact with employees and customer

5. Risk is spread over a number of people

6. The develop from a government

DISADVANTAGE

1. unlimited liability( all the owners assets are potentially at risk )

2. Disagreements can to windings of the business

3. All partners are responsible for the something of each other

4. If the key partners dies the business may fail

5. Profit on carrying the ratios necessarily equal

6. The owner can taken over the and Partner will lose Control of the business

LIMITED COMPANIES

know as joint stock companies

These are business where a number of owners ( shareholders) poll in there resources together and share the profits  proportionately. The debt of the company are  separate of the debt of the owner

Ownership:

Can be easily transferred to and many of companies can be passed down many of these generations

Features:

1. Separate legal entity

2. Limit liability

3. Owners are called shareholders ( buy shares)

4. Shareholders receive. Dividend payments

5. The board manger of  the company. The company doesn’t of  article of Association

6. Shareholders hold annual general meeting ( a share is a cefefication  Concerning part ownerships of a company. This certificate is also  entitled Shareholders dividends . A shareholder is a person  who owns shares in a limited company

PRIVATE LIMITED COMPANIES

is small - medium sized business that is owned buy shareholders who are open members of a family business

These companies can not share sells to the general public they have 2 but not more than 50 shareholders. The business should submit Financial statements and put reports to the register of company.

Formation:

these are  complex legal formalities and two documents should be drafted by the founders of the company. These documents include Memorandum of Association and Articles of Association

Ownership:

2 to a maximum of 50 shareholders

Management in control:

It is managed by the board of directors

Legal status:

The business is recognized as a legal person

Liability:

The shareholders enjoy limited liability and if the business fails the shareholders personal asses Can’t be taken they only lose The capital they have invested in the business

Continuity :

the business continue

Taxes :

double fixation the shareholders pay tax on their income and the business pays corporate tax

ADVANTAGES

1. easy to raise capital

2. Shareholders has limited liability

3. Greatest status then unicor  business

4. Is it to transform to a public limited company ( change funds / status)

5. do not have to publicize annual accounts press

DISADVANTAGE

1. Not easy to form

2. Have to fill complex tax forms

3. Can’t raise capital through

PUBLIC LIMITED COMPANIES

Are large businesses with the right to sell  Shares to the general public. The shared price are something on the stock . They have alert 2 shareholders to a maximum limit . Shares  are easily transferred . The public can be invited to apprise the shares sometimes

Annual reposts are supposed to be public in the press they must keep a register for directors and investors shareholding

Formation :

They are more complex legal formality 3 document should be drafted by the owner of the company . The three documents include articles of association , memorandum of association , and the prospector

Ownership:

Owned by 2 or no maximum limit or numbers

Management in control:

By the board of Director

Legal status :

The business is recognized as a legal person and referred as incorporated business

Liability:

The shares holders enjoyed limited liability if the business fails the shareholders assets don’t be taken they only owe the capital that they have invest in the business

Continuity : there is continuing

Taxes issues: There is double taxation: shareholders pay tax on their dividends as well as the business paying corporation tax.

ADVANTAGE

1. easy to raise capital through plotting shares just stock change

2. Operate on a large scale

3. Unlimited life

4. employees can become shareholders including loyalty ,

5. Shareholders enjoy limited liability

DISADVANTAGE

1. Difficult to form

2. Files open for the members of the public

3. Decisions are hard to make due to the large size of the company

4. No personal type of customer

5. Conflict of interest

6. Shareholders are usually interested in expanding in the business

CORPORATIVE

Associations of people United voluntarily to meet common economic Social and cultural . Usually members join together.  To purchase good they canT afford individual.

Main features:

1. Formed by people who want to work together

2. It is voluntary

3. Member s make a fit-able  contributions

4. Risk and benefits are shared equally

5. They are democratically control

6. The name ends with CO’OP

FORMATION : members have a common goal and these Members with draft a Constitution and the management formation is selected at the general meeting

ADVANTAGES

1. IT IS EASY TO FORM ( any adult can form a corporate)

2. No legal are formalities

3. It’s open to everyone

4. Members enjoy limited liability

5. Members get good and services at reasonable prices

6. There is continuity

7. Government provide special assistance

8. They are usually taxes exempted

DISADVANTAGE

1. unable to raise large amount of financial resources

2. It is managed by people who lack on required management skills

3. Can be affected by conflict

Franchise

Are agreement where one party ( franchisor run another party which is the franchisees right to use if trade marks or trade names  as well as certain businesses suitable)

The franchisee sells the franchise product or service

Trades under the franchises trademark or trade name and benefits from the franchises help and support

In return The franchisees usually pays fee to the franchisor and the precent  of the sells revenue . The franchisees owes the outlet they run but the franchisor it keeps control over how products are marketed.

Well-known businesses that also franchises identify include

Butter , McDonald’s, chick inn, nandos , kfc

Contractual obligations :

1. A franchise agreement can be drafted and signed by both parties. This is a legal contract in which the franchiser gives the  franchisees the right to us the business trade mark.

2. The franchisor is not allowed to open a similar Business close by

3. It must specify the franchisee in its monthly loyalty payments

4. They agreement lays out details of what duties each party perform

5. It also spreads  the duration of the franchise contact

Advantages to the franchisees

1. Franchisees benefit from free open support( for example site selection and designing financing )

2. Franchisor assist in training staff ( franchisee won’t have the cost to train because it is the franchisor duty)

3. The franchisor advertisement on behalf of the franchisees ( saves money

4. Risk is reduced and can be shared by the  franchiser

5. Relationship with suppliers have already established

DISADVANTAGE

1. The franchise might go out of business or change they way they do things

2. The franchise agreement usually includes restrictions on how you run the business

3. The franchisees must pay and initial Fee and continuing fee to continue to use the trademark

4. Franchisees cannot sell goods to other suppliers

5. Bridge of contract and results into a penalty charge

ADVANTAGES TO THE FRANCHISOR

1. It is the source of income to the franchiser( loyalty)

2. Risk of business is spread around different franchises

3. A network of outlets gives the business a better support

DISADVANTAGE OF A FRANCHISOR

1. Other franchises can give the brand a bad reputation

2. The franchise or must provide franchisees and on going support with then requires Constant research

3. Setting up a franchisees cost a lots of money

JOINT VENTURES

two or more business agree to work closely together on a particular project and create a separate business division to do so.

Joint venture is a long term business relationship but a short term relationship o a business single project.

The business is not a separate legal entity once the joint venture made it’s goal

Look for a example

They a joint  venture agreement such cover

1. The parties goal

2. The objectives of the joint venture

3. Contribution made by its each party

4. Its solution procedures

5. How to joint venture is terminated

6. No disclosure agreement

7. Day to day management

ADVANTAGES

1. Provide companies with opportunities to gain capacity and expertise

2. companies to have access to new technology

3. Access to better resources including personalized stuff and Technology

4. Sharing risks with a convention partners

DISADVANTAGE

1. The business fail of a partner will put the whole project at risk

2. Tiles of management encounter but be different that the two won’t blend will together

3. The parties don’t provide enough support in the early stages

4. Errors and mistakes might lead to one blaming the other

Strategic alliances

In agreement between Two companies that have decided shared resources to start a project

Strategic alliances is less involved then a joint venture

The main purpose is to my allow to organizations, individuals or other entities to work together common goal

Example:

1. An agreement with a local university

2. agreement with the supplier

3. Agreement with the competitor

HOLDING COMPANIES

this refers to a business organization that own and control a number of separate business that’s something in a companies.

There are not a different legal form of business organizations but they are an increasingly common to own.

FMAILY OWNED BUSINESSES

these are business that are actively owed and management but at least two members of the same family.

Destion making:

is influenced by multiple generations of the family sometimes

STRENGTHENS:

Look it up

1. Commitment- There is a great is a greater sense of commitment and countability

2. The family owners offer show decircation to see the business grow, p prosper and passed on the future generations. This level of dedication is almost impossible to generate in nun family firm

3. Long term out look-  non family firms think about reaching each goals while family firms think years and and sometimes decades ahead ( this something and something allow for good strategies and decision making.

4. Increased cost - family members working at family businesses are willing to contribute there own finance and insure the long term organization. This could mean contributing capital or taking a pay card this advantages comes in handing during economic down turns where it is necessary to personal something in order for the firm to survive

WEAKNESS

1. Family conflict - family member long have bitter fights that can affect every single person within the firm . These conflicts are usually difficult to solve and the business can end quickly

2. Unstructured government - government issues starts as internal hierarchy and rules as well as the ability to follow and listen to the law. It as taking less sometimes and can lead to efficiency

3. Tunnel vision - the lack of outside opinion and diverse on how to operate the business family members for which the lack on required skills education and experience this has got have far reaching effects on the success of the business

PUBLIC SECTOR BUSINESSES -

also the businesses are owned but the government on behalf of the public. They can be districts counsels or public corporates. These are established by an act of Parliament they are corporate With a  separate legal something and management by board a pointed by the mister . The mister can be questioned by parliament over activities of the corporate

ADVANTAGES

1. They provide important need and services at reasonable prices

2. Provide employees to the majority

3. Enplament government policy ( charging low prices to reduce inflation)

4. They are a source of income the government

DISADVANTAGE

1. There are ensiffient and very wasteful due the lack of the profit sometimes

2. They tend to provide poor quality goods and services due the access of competition

3. Lack of motivation to the workers leads to enffiecy

4. They suffer from excessive political internfies

PUBLIC AND PRIVATE SECTOR CONTRACTS

1. Usually to provide services to the community ( if the transportation system is owed by the government and it running a bus services to a village and it is not getting enough customers, the government might still countiue as the main objectives to provide service and not to maximize profit ). Private sector business gives priority to profits and may end the service of it doesn’t it find it profitable to run the service.

2. Public sector sometimes for employment while private sectors main aim is to become efficient and cut costs in the process they might find something

3. Public sector business usually located in areas where is under development and create jobs like and income for local population. Private sector might not keep this things in consideration and may end and look for external economic of scales

SIZE OF BUSINESS (3)

the business are classified as small medium and large businesses and that the business are compared using there size

IMPORTANT OF BUSINESS SIZE

Government: the government may want to give assistance to small firms , also what to charge different tax rates to different firms

Investors: they may want to compare with its close competitors and what to know how safe it is into invest in a business

Customers : may prefer to deal with large sometimes they are the most something and less likely to see production in the near future

Workers: may want to be employed in large firms and since they are confirm about job security

Banks : they use business size to determine the maximum loan they can give to the business

(Some stakeholders)

MEASUREMENT OF BUSINESS SIZE

They are many ways of measuring business size

1. The number of employees (Small business employee few workers then large businesses since they operate on a small scale

2. The about of capital invested ( these business have large capital investments in form of properties and equipment all of the properties are bought of capital employees referred to the total value of all term finance invested. As business might not use a lot of investment in machinery and investment properties may be big

3. The sales turned over : these firms have a high turn over then small firm : the have a good reputation and more outlets and they can afford to advertise there product

4. Market capitalization: the total value share issues by the company and higher capitalization appeals to these firms . It is caulated by its formula ( current share price x total number of shared issued

5. Market share : the sales of the business as the proportion of the total market shares . Market measures as a percentage( total sales of business over total sales in the market x 100 )

WHAT IS A SMALL BUSINESS

a business that depends or that is independently owned and operate with a small number or individuals . Small business are privately owned for partnership or local some. Amount of capital employed

IMPORTANT OF SMALL BUSINESSES IN THE ECONOMIC

1. CREATES JOBS: small businesses employes the majority in any country

2. They can grow to become big firms : every business starts small. These small businesses will become large businesses tomorrow

3. Small business are flexible and response easily to changes and demand. They are owned by one or 2 individuals and they are more flexible adaptable to day to day operations

4. Small forms often cater to local demand . Local and something can place there orders

5. Small firms provide niche products and services which in large firm might over look .

6. In difficulty economic times blank and sometimes small businesses are important source of providing employment

7. They improve efficiency in the economic.

8. Small firm provide competition to larger firms through providing customized good and services

9. Small business provide informal presence ( they offer something  facilities to well known customers

10. They build economic growth ( they increases the production in the economy that the growth domestic product of economy with increase

DISADVANTAGE

1. Lack of capital they don’t have enough capital to stock enough goods

2. They sell poor goods

3. It is managed by employees who are less

4. Small

5. The risk of failure is high

6. Customer are unwilling to buy from small firms something are reluctant

7. Difficult to raise finance ( small businesses struggle to get loans from financial institutions and this will fulfill business growth

PROBLEMS FACED BY SMALL FIRMS

1. Poor funds ( lack of finance)

2. Poor debt management

3. Lack of mandernal skills of the owner

4. Small business can not reatire experience staff ( not have enough funds to pay them )

5. They find it difficult to arttract skilled staff

6. Poor stock management

HOW SMALL BUSINESS CAN SURVIVE

1. Being different ( product is different)

2. Sometimes The market by income . They can target niche market segments of high income customers posting there products as a permuim brand at high permuim ( modern sport cars , clothing

3. Small firms have the advantages of being able to respond quickly from being detain

4. The internet also allows small firms to direct access to consumers  by passing inter something . The world gives more firms opportunities of international marketing

5. Small firms can independent can join together to form a buying group to negotiate on joint orders

6. Small firms can survive by speciation a perium leach and offering an inclusive brand that exactly meant s the required means of there target segment.

7. You need to be customers orientated

8. Keep will documentation

BUSINESS GROWTH

It refers to increase in the operations , expanding production, and increasing the sale and the profit of the same

REASONS WHY A BUSINESS WANTS TO GROW:

1. To increase profits ( the chances of business success rising when the business grown internal an external

2. To reduce risk  ( business growth where the business introduces a product that is total is different from the existing ones  lower the risk of failure

3. To domains a business where it is a market leader has the power to take price

4. Reduces cost increase the output lead to economic scale . Economic scale refer to the cost saving advantage enjoy by a business in a relazte of an large operation

1. To fulfill the objectives of management ( it can be a planned move  by the management to spread the will of its business into the new market

TYPES OF BUSINESS GROWTH

External and internal (organic)

Organic growth - expanding the business from within by using its own internal resources. It involves expanding the business through increasing the number of employees , increase production of a product , opening new outlets and increasing quantity also

Exmaple:  look for it

ADVANTAGES

1. It can be financed through internal funds

2. Less risk than taking over other businesses

3. Allow business to growth at a more senseable rate

4. Builds on business strengths

DISADVAeNTAGES

1. SLOW GROWTH AND MY PERFER MORE RAPID GROWTH

2. Harder to do market share if the business is a marker leader

3. The business can be affected by cash problem

EXTERNAL GROWTH

growth achieved through integrating that is major and take overs .

TYPES OF INTREGRATIONG

Horizontal internal

Vertical

Conglomerate

horizontal integration- it appears when two firms which are in exactly the  Line of business and same stage of production joined together . It is the joining of rivals firms sales the same price of good

Exmaple: Nike and adidas because of shoe

ADVANTAGES

1. Reduces the risk of failure

2. Enjoy economic of scale

3. Eliminates competition

4. Have more power over suppliers

5. Easy to mange as in conglomerate majors

6. To strengthen financial sometimes

DISADVANBES

1. Pervious

Vertical integration- ouccurs when two firms in the same industry but have different stages  of production join together to form one business

Ex:

Vertical integration can be forward or backward

FORWARD VERTICAL INTEGRATION

occurs when a business joins with another which is in the same industry but some in production that is joining with a customer of existing business

Examples :

ADVANTAGES

1. Business control promotion and pricing of their own product

2. Gives a secure outlet for the products of the business and may now exclude competitors products from retailers outlets

DISADVANTAGE

1. Consumers

BACKWARDS

1. It occurs when a business joins with another business which is operating as a pervious stage of production. Business joins with another which used to be a supplier

Ex: realtor made in manufacture this a movement from triart sector to secondary sector

ADVANTAGES

1. Greater control over quality , price and

2. Emilates

DISADVANTAGE

1. Lack of control of the customers

Conglomerate

1. This ingtration is between firms in complete different line of businesses or industries . A firm will be trying to explore different opportunities and minimize or diversity something

Ex : Nike and Whole Foods

ADVANTAGES

1. Profit margins can be increased due to other businesses

2. Market share can be increased

DISADVANTAGES

1. Risk of failure due to lack of experience in the new market

2. If the business is new it difficult to lower down the prices compared to established firms

REASONS FOR MAJOR

1. Expectations of higher profit

2. To reduce competition

3. Easy and quick ways to expand businesses  easily increase there market in a period of time

4. Enter a international market

5. Asset increase

6. Complay with the law of captail requirements to join with something

TAKEOVERS

When a company buys more than 50% of the shares of another company and becomes its controlling owner . It usually found on public limited companies because there shares open and any on can buy them. When a take over is complete the company that has been bought  loses its identity and becomes apart from the buy company , the buying company is know as the acquire ( bidder and the company that has been bought loses its is know as the target )

WHY DO BUSINESSES STAY SMALL

1. The type of industry the business is operating in some industries it is not buyable for the firms to expand since they will be offering personal services. Example hair dressing, plumber , car repairs etc. if they were to grow to larger  they would find the difficult to offer the close and personal services demand by customers

2. Market size the number of customers will determine the size of the firms  if the number of customers are small the businesses in that industry will remain small

3. Owners objectives some owners prefer to keep there firms small and would like to avoid the stress of a large firm

BUSINESS OBJECTIVES(4)

Measurable targets of how to achieve business aims or the targets  that must be achieved in order to realize the aim of the business. Objective can be seen as the most specific and quantifiable aims designed to assist in the achievement of the goals identified in the mission statement

Objective must state what the organization is tryna to achieve how this can be done when it must be done and how they will know that it has successes

IMPORTANCE OF BUSINESS OBJECTIVES

1. They clarify to everyone what this business is working to achieve

2. They aim in decstion making and chose or strategy

3. they enable checks on progress and corrections actions

4. They provide needs by which performance that can be measured

5. Motivate employees

6. They can be broken down targets for each organization

7. They provide shared holders with a clear idea of the business of which they have invested

8. They facilitate the resolution between the something

Ojectives should be smart

Must be  SPECIFIC

MUST HE MEASURABLE

MUST BE ACHIEVABLE

MUST BE REALISTIC

MUST BE TIME SPECIFIC

SPECIFIC

ojectives should be more presised. Having a bunch of something statements is not very helpful at all. You must make your project tangible by saying how you going do it .

Ex:

MEASURABLE

define your Ojectives using accessible terms . Express it in terms or quantities , cost and dead lines. It refers to the extant to which something can be sometimes the some standard

Ex:

Realistic

Ralvent the objectives should be challenging but it shone also able to achieved by the person using the available resources the objectives should be realistic when compared with the resources of the company and should be expressed in terms realvant to the people who have carry them out

Ex

TIME SEPECIFE

an object should have end points and check points build into  it . They may have a time limit of when the objects the objects should be achieved.. time specific answers the question, when it should it will be done?

Ex by the end of the month or end of year

HIGHERICHY OF OJECTIVES

Where the business wants to go it the future aims and state and sometimes in the project it is

Mission: a formal summary of the aims and values of a company and explain the organization purpose what stands for and why it exists. It’s a statement of the business full aims praise to motivate employees and simulate interest by outside groups . It’s should state things related to the business such as industry, products or services and culture and customer and the odernates like quality, efficiency or pricing and social responsibility

Ex: Facebook is to give people the power to share and make the world more open and connected

Ford company one team, one plan one goal and ford mission statement

TYPES OF OJECTIVES

Stragertic objectives those That are very risky and are likely to influence the overall long term policy

Ex: what new products to develop

Practical Ojectives - fairly retain . Predictable short term decisions for ex what price to charge to a product

Operational Ojectives: decision which are repation , day to day and risk free ex: how long should the tea break be

PURPOSE OF A MISSION STATEMENT

1. A quickly informed groups outside the business what the central aim and what vision are

2. Helps to guide and direct idviidvals employees at work

3. To motivate employees

4. They help to establish in the something on other groups what the business is all about

COOPERATE OBJECTIVES

A detailed plan of step you plan to take in order to achieve statement aim .. mission statements and aims  Compliances..  because they have specific details for operations decisions and they are rarely explained in quainted terms

Aims and mission statements should be turned into objectives that are specific to the business that can be broken down stratic departments.

They provide more detailed about the cost acting or strategy to follow

Include

1. Profit maximization

2. Profit satisfaction

3. Growth

4. Increasing market shares

5. Survival

6. Cooperate social responsibility) CSR)

7. Maximum share holders

PORFIT MAXIZATION

IS THE MAIN AIM FOR Most private firms . It refers to the greatest position difference between total revenue and total sales . Total revenue x total sales

Profit is very important to business because it is used for rewarding investors

Used to for business expansion in the future challenges faced by firms as they persuase Profit maximization

1. Maximum profit will encourage new competitors to enter in the industry and chances for business success will be reduced

2. These Ojectives will be achieved in profit tolero the owner happy but not to maximum profits these Ojectives are persuade by owners small businesses who which to have more liseire time. The business will be satisfied make making a level of profit

CHALLENGES FACED BY FIRMS ( profit maximization)

1. The business wont be having money to grow in the future

2. The business may lack funds to implant social responsibility programs

GROWTH

increasing the operation of the business

Expanding to other regions or countries

Measured by the number of employees and number of products sold

Growth benefits in mangers in terms of higher salery

It helps the business to avoid takeovers

The business benefits for the economic of scale and it becomes more appealing to investors

CHALLENGING

1. Rapid growth can lead to economic of scale EX: financial in economics and management of of scale

2. Increasing market shares ( referred to something in the market) ex :

MAXIMIZING SHARE VALUE

objective to of a public limited companies management will be concerned abt increasing the company shared prices and deviation paid to shareholders but the interest must be considered as first priority

Increasing shareholder value is increased in profit maximization

CHALLENGES FACED BY FIRMS AS THEY PREUSASE

the Ojectives conflict with something of stakeholders

COOPERATE SOICAL ABILITY

refers to a set of policies to demonstrate the commitment of a business to world being of society and others by taking responsibility for the impact of decisions of all stakeholders. Some businesses have objectives which are based on there beliefs of how one should treats the environment should treat the people.

it apples to those businesses that consideres the interests of society by taking responsibility of their decisions and activities on consumers and employees and communities and the environment. Some businesses activities are very damaging to other stakeholders

BEFNEFITS OF SOICAL RESPONSIBLE

1. The business can be given government contacts or tender

2. The business can easily attract highly skilled personnel

3. Business will gain public acceptance and reduce the risk of negative publicity

4. Employees commitment to the same values

5. Customers loyalty

CHALLAGES FACED By FIRMS

1. Conflicts with the profit maximization objectives

2. Time is waste on SOICAL problems

3. The business won’t have enough money for expansion

4. Greater crisism and loss of loyalty if things go wrong

DEPARTMENTAL OBJECTIVES

Idvidivcl OBJECTIVES

Look at audio

OBJECTIVES IN THE PRIVATE SECTOR ANd PUBLIC SECTOR

1. To earn high profits ( all they want profit in the private sector)

2. To maximize wealth of shareholders

3. To fulfill needs and wants of the people

PUBLIC SECTOR OBJECTIVES

1. TO create employment

2. To operate even if no profit is generated

3. To provide certain products such as publicity, trust ,

4. To provide goods and services at affordable prices

OBJECTIVES OF NON PROFIT ORGANIZATIONS

1. Is to provide services to members

2. Provide employment

3. Operating the world fairs of members

4. Eliminate porvety in communities

Conflicting OBJECTIVES

often times 2 or more objectives will crash and we call this conflicting  objectives

COMMON CONFLICTING OBJECTIVES

1. Clashes between key stakeholders ( owners of a company objectives may clash with those of managers or employees. Owner may want the business to minimize cost will employees mind for a pay mind

2. Growth ventures profits ( achieving higher scores in the stock sale probably by cutting will lead to reduction in short term profit

3. Clash between short term and long term objectives ( a business may decide to accept lower cash flow in the short term while it invests in new products plans in the business)

4. Clash between environment and profit ex :

STAKEHOLDERS IN A BUSINESS (5)

Any person or group or organization that there’s and intersect in or affected by the activities of a business .. also can be defined as individuals or groups with an interest in the activities of a business.

Introducing business stakeholders

1. Owners

2. Employees

3. Customer

4. Local community

5. Mangers

6. Suppliers

7. Pressure groups

8. The government

A BUSINESS needs to take into account of needs and interests of its stakeholders in order to operate successfully and ensure long success. Different stakeholders may have different priorities which means that at times it may be difficult for the business to please all stakeholders

Stakeholders can be involved into two

INTERNAL AND EXTERNAL STAKEHOLDER

internal - is some who is directly involved within organizations and is affected by its day to day decisions

1. Owners they provide and take over responsibility of the business

2. They invest in companies by buying shares

RIGHTS OF OWNERS

1. they have the right to profit , right to make decisions ( especially in small firms ) , right to close the business

2. The owners have the right to dividends

3. They should hav access to key financial information

RESPONSIBILITY OF THE ONWERS

1. they run to business and ethical and legally

2. They reinvest or distribute profits

3. They ensure long term success

4. They bought responsibility, they monitor performance and long term growth

EMPLOYEES

They work in the business and carry out tasks assigned to them

RIGHT OF EMPLOYEES

1. must have a right to get fair pay

2. The right to safe working

3. Job security

4. Non discrimination

RESPONSIBILITY

1. They should work effectively

2. They should follow company rules

3. Must respect colleagues and customers

MANGERS

They lead the team and run daily operations

RIGHTS OF MANGERS

1. Right to make a decision within there department brand

RESPONSIBILITY

1. they meet targets , manage the resources

2. They report senior leaders

EXTERNAL STAKEHOLDERS

a person or group outside the business who is affected by or has a interest in its activities and performance

CUSTOMERS

  They take used good and services

RIGHTS OF CUSTOMERS

1. They have the right to serve, good quality products, fair pricing and clear information

RESPONSIBILITY

1. They us products correctly

2. Pay on time

3. Give feedback

SUPPLIERS

they provide goods , materials or services need production

RIGHT IF SUPPLIES

1. Right to be paid on time

2. Far contract

3. For communication

RESPONBITYILY

1. Deliver on time

2. Matain quality

3. Must be reliable

CERDITS

they lend money or provide trade verify to the business

RIGHTS

1. Right to be paid on time, to receive interest if agree

Responsibility

1. they provide funds as agreed assets risk before lending

Local communities

leads near or is affected by the business of operations . They may be employed by the business

RIGHTS

1. They have the right to please the environment. Job , reduce noise and traffic

RESPONSIBILITY

1. They participate in Constantino

2. Give feedback

3. Supports local where it’s possible

GOVERNMENT

It regulates business activities and collect tax and search loans.

RIGHT

1. It’s  right over government to collect tax’s

2. Inspect of compilers

3. Informe regulations

RESPONSIBLITLY

1. to in force laws

2. Support economic stability

3. Provide public services ( education, health care transportation)

Pressure groups

They campaign to influence business behavior especially on social issues

RIGHT

• protesting

• Raise awareness

• Organization campaigns

RESPONSIBILITY

• they act lawfully

• They communicate concerns clearly

• Represents public or ectical fully

COMPETITORS

They offer similar products and services in the same market

RIGHTS

• to compete fairly and legally

• Complete ecticaly as a competition and avoid misleading and copying innovation

BUSINESS IN ITS ACCOUNTABILITY TO ITS STAKEHOLDERS

The business being responsible for its actions and decisions and is willing to explain them those stakeholders affect

WHY DO BUSINESS NEED TO ACCOUNTABILITY

1. Stakeholders have power and influence ( if stakeholders feel ignored or treated unfairly they can harm the business)

2. Shareholders can vote at meetings and sell shares affecting the share price

3. Employees can strike , resign or lower there productivity

4. Customer can stop buying products and damage the brand

5. Pressure group can launch companies that can make bad publicity

6. Government can fine or close business that break laws

7. Accountability Matains trust and reputation ( being open and honest helps build trust )

8. A good reputation attracts skilled works and local customers

9. Its support long term success ( listening to stakeholders helps businesses to avoid conflict and make better decisions it encourages ethical behavior and reduces the risk of breaking laws or damaging the environment

ACCOUNTBILTY TO DIFFERENT STAKEHOLDERS GROUPS

EMPLOYEES

business responsibilities

• the business pay fair wages and offer job security

• The business provides safe place

• It’s support training and development

• They treat all employees equally

DEMONSTRATE ACCOUNTABILITY

• they share updates there meets and emails

• They follow employment laws

• They support unions and employees voice

• They respond to HRD

OWNER

business responsibilities

• they make good use of there investment

• They aim for strong profits and they must be transparent to business preforms

DEMONSTRATE ACCOUNTABILITY

• they publish financial reports and forecasts

• Hold AGMS for questions and voting

• They pay dividends when profits allow

CUSTOMERS

business responsibilities

• they provide on business responsibilities and they business can rely able products

• Offer good customer service

• They charge fair prices

• Advertise honestly

DEMONSTRATE ACCOUNTABILITY

• they respond to complaints and offer refunds

• They is quality control systems

• They provide warranty and clear information

SUPPLIES

business responsibilities

• they place clear and fair orders

• They pay on time

• They build respectful long term relationships

DEMONSTRATE ACCOUNTABILITY

• they owners contracts

• they communicate about delays

• They avoid forcing and fair cuts

LOCAL COMMUNITY

Business responsibilities

• they suppose to reduce pollution, traffic and noise

• Create local jobs

• Supports local course and projects

DEMONSTRATE ACCOUNTABILITY

• they consult the public on expansion plans

• Sponsored local events

• Minimum negative environmental impact

GOVERNMENT

business responsibilities

• follow laws and regulations

• They pay taxes on time

• They report accurate business data

DEMONSTRATE ACCOUNTABILITY

• they coordinate with inspection and orders

• They submit tax returns

• They follow correct procedures when expanding or closing size

PRESSURE GROUPS

business responsibilities

• they respect concerns of ethics of the environment

• They avoid controversial practices

• They meet with group leaders

• They adapt policies if necessary

• They respond to companies or negative publicity

CONFLICTING AIMS OR OBJECTIVES

• Stakeholders groups can have conflicting objectives which can lead to tension and disagreements

• They can arise when stakeholders have different levels of power and influence ex: pressure groups which a strong public supports maybe be able to influence

• business may be might need to buy the compltion demands of the stakeholders group ex: a company might need to invest incostly to meet the. Demand of the local community but this may reduce profitability and unset shareholder

EXAMPLES IF STAKEHOLDERS CONFLICT

• employees and employers ( in 2022 workers at Apple Chinese factor operated fox con against the. Covid -19 regulations

• Unpaid bonuses and poor living arrangements .

• Employees clashed with security forces and video of the rapid spread

• Apple first delay of Apple production and fix con have to provide extra pay to stock holder

PRESSURE GROUP AND GOVERNMENT

• in 2021 environmental groups the government handling of the derivation in the Amazon rainforest

• Organization such as GREEN PEACE and www.f

• The groverment was supported the economy developments but it group and affected other countries . The government argued that it was in something

LOCAL COMMUNITIES AND DELEVOPLEMTS

• in 2018 in India someone states local community protest against the expansion of the smelling plant on the still light copper . Residents claim that the plant cause pollution and health problems

• Protest escalated

HOW STAKEHOLDERS MAY BE AFFECTED CHANGES AND OBJECTIVES

Business objectives can change over time depending on the business situation such as during a resashing after a major or facing plubic pressure.. any changes to a objective will impact stakeholders in different ways

1. employees … if the business changes its objectives to focus on cost cutting employees may face lower wages or job losses if the new aim is growth employees may see more job opportunities, promotion or training

2. Owners … at shift towards maximumtsion maybe resulting in higher dividends and increased shared prices if the business aims to become more sustainable profit might drop in the short term which some share holder may not like

3. Customers… if the forecast is on lower costs product quality or customers services might suffer. If the aim shift to ethical business customers may benefit from better service and feel loyal to the brand

4. Supplies…. If the business wants to reduce spending it may demand lower prices or reduce order which negatively affects suppliers… if the business focuses on ethical sourcing, suppliers who meant fair trade or quality standards will benefit

5. Local communities ….if a business changes its objectives to focus on environmental impact tthe local area may benefit from cleaner operations and more community support if the goal becomes global expanision the business might relocate reducing local investment or jobs

BUSINESS DECISIONS AFRECT STAKEHOLDERS INTACTLY

stakeholders do not all react in the same way as business decision.internal stakeholder are involved in job changing roles , business income or strategy

External stakeholders may feel the impact in the form of prices , supplies , local jobs or reputation…

CHANGING BUSINESSES OBJECTIVES AND STAKEHOLDER REACTIONS

PEOPLE IN BUSINESS

Management nd leadership

Management- setting objectives and organization resources and motaiving  staff so that organization aims are met

FUNCTIONS OF MANAGEMENT

Setting objectives and planning - establishing of overall strategic objectives translated into tactical objectives planning needed objectives made

Organizations the resource to meet the objectives- recurrentment ( giving oiraty and access)

Clear something to work towards common objectives

Directing and movtiaing staff- guiding , leading and overseeing employees to ensure organizational goals are meet and staff development included

Coordination activities - ensuring and conciseness of different organizations of the firm established common sense of purpose or used correctly

Controlling and measuring performance against targets- appraising performance against targets take appropriate action and provide feedback

Management roles

• mizbergs divides them in to informational ,  inpersonal and decisional

Inpersonal- dealing with organizal stuff in a organization

Figurehead

symbolic leaders or social or legal nature or role

Leader -

Lisos - communities between mangers and leaders of different divisions and other businesses

Informational- it acting as a source, reserver and transmitter or information

It mangers data collection

De something

Covey data from internal and external people to the relevant

Spoken person

Communication about the current and achievement to external entities

Decisional - taking decisions and allocating the resources to meet the organization objectives entrepreneur identify new opportunities and expanding

Distributes handler - responds to threating susuatiosn

Resources allocator - it control and spending or financial or human physical resources

Leadership : the art of of motivating a group of people to achieve a  common objectives

LEADERSHIP

the art of of motivating a group of people to achieve a common objectives

LEADERSHIP POSITION

4LEADERSHIP POSITION

1. Director- head of major functional departments , elected senior member, objectives meeting and communication

2. Mangers - they mange people, resources, decisions making , direct movatie diepline

3. Supervisor-Management appointed responsible for goal achievement and work in a cooperative manner

4. 4. Work representative -work elected , and discuss concerns

QUALITIES OF GOOD LEADER

1. Desire in natural self confidence

2. Creative and think beyond the ovouse; encourage other to do also to

3. They are out talented; they understand issues in various aspects of the business and they are insissful( meaning that they identify the heart of an issue

LEADSHIP  SYTLES

1. Autocratic leadership

This is when the employer is the o key one to decide everything in the business

They centralised decision-making

One way communities

It demotivated workers

Little information giving to staff

1. Democratic leadership

Encourages active workers' participation for decision-making and brings out the best or add value

Two way communication.. Staff is given information

1. Laissez-faire leadership

Decisions are made by work force and us the hand off apporch and bring out the best and maximum added value

Attorney or decision-making is delegate

THEORY X AND Y

EMOTIONAL INTELLIGENCE

THE ABILITY of mangers to understand they own emotions and the emotions of people they work with and achieve better performance

GORMAN E IT PREFORMANCE

1. Self awareness knowing what we feel is important and using that to guide in decision making and having self confidence in our abilities

2. Self management being able to recover quickly for stress and showing initiative and self control

3. Social awareness sensing what other are feeling and being able to take there views account and being able to get with a wide range of people

4. Social skills - handling emotional relationships and accurately understanding different social sustation using social excuses to persuade using social to lead

Movtivating is the reason why people what to work that simulates people to take action that leads to a goal  a motivation Ed work force is law and productive and the business has competitor advantage if the works are well motivated there is  no  labor turnover

No low absenting meaning they are always there

Human needs these required for life … motatives assumes to fufffull there needs

HOW HUMAN NEEDS HOW MANY NIT BE SATISFIED AT WORK

1. Two way communication on how feedback is provided

2. Good work conditions

3. A steem need after finishing work

4. Hizberg factors

Maslow hickory of needs

Needs start at a basic level

After one need is satisfied they move on to the next level . Satisfied need wont motivate action. Reversion is possible ; satisfaction can be withdrawal al can be moved down

1. physical needs ( food shelter and water , safety needs

2. Social needs ( trust

3. Esteem needs ( respect from others , status recognition of achievement

4. Self Actualsation ( reaching one’s full pontentail

ADVANTAGES

1. useful summary of human needs.. application of design and positioning

2. Helps markets focus advertising of specific needs of the market

3. It helps decide rewards at each level and encourages potential

1. Visvual adressment of motivation

DISAVANTAGES

1. hard to identify which need is met

2. Money can satisfy different levels

3. Self- actuation is never permanently achieved

TAYLOR

Select workers to perform a task

Record time taking to do each part

Identify the quickest method

Train all works to use the method

Ensure the best way is cared out

Pay workers on basis of results

ADVANTAGES

1. In hands teamworks . , conraraotiing between mangers and workers

2. Increases speed of production

3. Higher productive

DISADVANGES

1. Industry specific

2. Lack of feedback

3. monthmus

MAYO

He changes in working conditions and financial rewards and have little or no productivity.. when mangement consult with works and takes an interest with there work them motivate is improved..working in teams and developming a team spirit can improve productivity

When some control of some others own leads is giving to works such as deciding when to take breaks , there is a positive working effect

Groups can establish there own targets or norms and these can be greatly influenced but forms of leads if the groups

ADVANTAGE

sustainable productivity inhandsment

Teamwork and modern bus fit

Help set up long term plans

DISADVANTAGES

requires feedback

Partispants can view work counters

Unsent of evidence of the original study

HIZBERG 2 factors

Have a potential to cause desatifaction

These can lead to job satisfaction

Motivatioers

Achievement

Recognition for achieveing work

Responsibility

Advancements

Hygiene factors

Company policy and administration

Supervision

Salary

Relationship with others

Working conditions

Pay and working conditions can not motivate only

Motivators can be adopted there job enrichment

Hygiene factors get taken for granted and don't cause motivation for the long term

Job enrichment - aims to use the full capable for work but giving the opportunity to do more and be fulfilledwork

Can be be achieved by complete unit of work, feedback oof performance and a range of tasks

MC CELLAND

Consist need for feedback and achieving that is a result-driven

Authority motivated desire to control others be influenced and make and be influenced

There is need for affiliation and friendliness relationships

Good team members tend to be liked and popular

Vcroom

Individuals chose to behave in ways they believe to outcome that they value

Employees can be movitated if they believe; there is a positive link between effort and performance

Favour performance will result in a desirable rewards

Rewards satisfy an important need

EFFORTS -> performance  -> rewards

Expectations -> inturmuntantality -> balance

will my efforts lead tob higher performance

will performance lead to outcome

Do I find the outcomes desirable

PAYMENT METHODS

1. Time-based ot time rate

2. Salary and annual income that is usually paid on a monthly basis

3. A peace rate ( a payment to a worker for each unit produced

4. Commission ( a payment to a salesperson made )

5. Bonus ( a payment made in addition to the contracting wage or salary )

6. Profit sharing ; usually paid as proportions ad a basic salary

7. Performance-related pay ( a bonus skim to rewards staff from something things

Non-Financial MOTAVTIES

Teamworking

Job resignation; restricted a job usually a job employy and make the jobs more interesting safitying

Opportunities for promotion ( moving a employees to a higher level do to u more responsibility )

Training of workers there ma work relation education increase workforce skill and efficient

Selection

HUMAN RESOURCES MANAGEMENT

ROLOES OF HRM IN an organisation

recurrment (identifythe need to attract candidates for a particularjob

Selection (selecting the perfect candidate for the job )

Training(training the works ❤)

Induction( to familiarise the workers with the business site )

Advised and guidance ( support employees with family, financial problems and higher morale)

Workforce planning ( analysis the number of workers )

Labour turnover - the rate of employees leaving an organisation it is caucluate using the formally number of employees leaving in one year over of average number people employees times 100

Recurrent and selection process

Starts with job description

Job description - a detailed list of all key points about the job starting key task and responsibilities

Person satisfaction -  detailed list of the qualities of the persons skills and qualifications of a successful applicant will need

Job advertisement - through media

To shortlist applicants

Select between shortlist

TWO TYOES

Internal recruitment - they is no induction required, known applicants ( promotion opportunities an cooperative objective understood and it’s quicker

External recruitment - hire employees from outside the business high standards are required have a variety to choose … no staff present on promotion

Selection through interview and test and screen then chose the suitable candidate

The HRD is also responsible for training of workers through work related education and increase workforce skills and effective

Introduction training- introduction to familiar new recruits with the systems used in the business and the layout of a business cite

They give advice and guides thought supporting employees with family reduce financial program

Work force planning -analysis the number of workers and the skills levels required to achieve business objectives

Labour turnover

This is the rate at which employees are living an organization

It is calculated using the formula number of employees living in ove year over average number people employed x 100

CONTRACT OF EMPLOYMENT

This is a legal document highlighting the terms of conditions of employment and is accorded with local laws

INFORMATION ON A CONTRACT

It includes the work responsibilities , working hours, notice leave , holiday entitlement

Training

On - the - job training - involves hrd training officers and this can be experimental and this is done to existing staff and it’s cheap and controlled

Off - the - job training - this is when the employees are sent outside the business to get trained

Advantage

It acts as a motivator

Tax debts decreases

the workers are qualified

Flexibility

Productive increases

Disadvantages

It’s expensive

It can be porched

Reduction- employee becomes unemployed through no fault of there own because the job is no longer required

Dismissal- is being dismissed or fired  because of bad behavior

Quality-  a fair organization, equal treatment and full potential

Advantages

It’s a moral booster

Motivation

The organization can recruit top quality

MIXED WORKFORCE

A positive or differentness and value them . To helps to attract ethical consumers , there is diversity, creative workers , it attracts well qualified workforce and reduces labour turnover, knowledge of foreign languages help the business to grow

WORK LIFE BALANCE

Employees can give the right amount of time and effort to work and personalized outside work. This reduces traces and increases productivity it’s achieved by flexible working ,tillering , job sharing,

MARKETING MIX

marketing - are basic on the coorapte on a na

FACTORS AFFECT  DEMAND OF PRODUCT

income

Test of the product

Competitors

Promote

Population ( looking at who are going to sell it to and how many will buy)

SUPPLY THAT AFFECTT THE PRODUCT

TECHNOLOGY factors

Looking at the sales

Government affect the supply of the products

natural factors ( hazards) that might affect the supply of a product

As prices increase the demand of the product

As the prices increase the supply also increases the price increases

Type of markets

Consumer markets-

National markets-

International markets-

Market orientation

Type of market and product orientation

Product orientation-

Marketing oriented

When measuring business size in terms of market share and growth it should vary and volume should be used

Markets shares - sales of a firm over of the total sales in the market of a given time period

High market share means that there are higher sales and Lowe discounts and retails are knee to stock

Niche marketing -

Niche marketing has lower competition

Survival for small firms

Large firms can exploit

Mass marketing - selling the same products to the whole market with no attempt to target groups we pin it

Lower production with mass few risk

Mass segment- identifying different segments of need and wants in a market

Based for segmentation geographic, demographic

Geographic based of culture

Demographic- income levels and social groups

phsyograpic-  looking at life style , values and attitudes

Advantage

Defines a target market

Profitablity

Identifies gaps and

Disadvantages

Higher resources and l delveopment and

Promotion

It depends on accuracy of market research

Market research

Is to determine characteristics an view a consumer profile and attend wants and needs

Evaluating market research- looking  at the costs

And have relevance , accuracy , compareablity , and timining bias

METHOD OF RESEARCH

primary and secondary

Primary - the collection of firsthand data related to a firm need

Ex: focus group’s questionnaires

Quality of research

qualitative - reaseach into in depth motivation behind consumer buying behavior

quantitative-

secondary- the collection of data from second hand resources

It includes printed pay or worker best for something of commtinton

Sampling - a group of party in market research that are supposed to represent the entire market

method of sampling

Random-  each member of the target population get a chance of being selected

Stratified - a sample is collected and randomly select members

Quarter sampling - a appropriate number of which spectrum  is selected of the target population stratified

LIMITATIONS

expensive

May not represent popularity

Basic on market research

COST AFFECTS OF MARKET RESEARCH

Well designed and focused and it pays for it self

Accuracy is critical

Only translates to revenue if right segmentation done

MARKETING MIX

product , price , promotion and place

Product- customer solution

Price - cost to customer

Promotion-  communication

Place - convenience

Customers relations can improve by :

1 . Targeted marketing

1. Customer service

2. Agreeing to one offer request

3. Providing information customers

4. Social media marketing

PRODUCT

the end result of a production process

they can be good or services

They have intangible and tangible attributes and compared

Tangible attributes are those can be measured

Intangible those are subjective and can’t be compared or measured easily

PRODUCT DEVELOPMENT

THE development and sales on new products or new development of existing product existing developments

BENEFITS

It help builds brand identity

YOU can create USP on products

Set higher prices which will lead to higher profits

USP- this is a factor that defers a product from its competitors ( what have competitors don’t that’s unique)

THE PRODUCT CYCLE

The pattern of sales records buy a product from introduction to decline in a market

PRODUCT PROFILY ANALYSIS

analysis the range of different products of a business to help allocate resources effectively between them

This helps to launch a new when to make a new one or not.

Extension strategies

These are marketing plans to extend the maturity stage of a product before a brand new one is needed

( repackaging, selling in new markets, and marketing for new uses )

PRICE STATGITES

competitive pricing- changers the same of lower price then the. Competitors

penetration pricing- charge low prices high promotion and also mass marketing

Price skimming- low ped and strong USP and maximizing products

Price discrimination- charge difference prices for different consumer groups and the same

Cost - based pricing- setting a price after calculating unit cost and a fixed margin

PROMOTION

above the line and below the line promotion

Above the line - paying for communicates directly with o the consumer

Information adverting - this give information to protential customers and used for new products or substantial changes

Persuasive advertising- this try to create a distinct brand image and help with product differentiation

Below the line - not directly paid for based on short term perception to purchase

Includes

Sales promotion- this when offers incentive such as special offers or deals with direct at consumer or retails to sales increases or repeat purchases

Loyal skimming, or money

BOFGO

Personal selling - a member of sales communicates with a im of a product and establishes a long term relationship between a consumer and product

it requires well trained professionals staff for high margin items

Direct mail

Traded shares or sponsorship

Public relations- the deliberate use of free publicity products by new papers tv and other media to communicate with and achieve and understanding by the public

ROLES OF PACKAGING IN PROMOTING

it protects the product

It provides information

It supports images ( product recognition)

BRAND

Identify name , symbol, image or trade mark that differentiate of a product from its competitors

ADVANTAGES

• increase brand recognition

• Product differentiation ( family of products)

• Consumer loyalty

• Reduces prices of demand

CHANNELS OF DISTRIBUTION

this is the chain of product that passes through from produces from fail produces

it is chooses on the base es of

• geographical suspension

• Size of the market

• Level of service

• Unit value

• TYPES OF channel

• Direct selling ( producer to consumer

Internet marketing

Advertising and marketing activities that use Internet email and mobile communication to encourage direct to e-commerce

e- commerce

The buy and selling of good and service by businesses and consumers varied electronic intermediate

Internet marketing- online advertising, its worldwide and cheaper

e- commerce it’s cheaper but no direct contact with customers and it relies on costlier services may have high return

Distributions- digital products distributions digitally

Dynamic pricing- vary prices and different times

Viral marketing, using social media and text messages to increase consumer awareness and brand recognition

GENERAL concerns on marketing on the Internet

Slow internet speed

Payment security

And cuber bully

BENEFITS

cheaper

Reaches a larger audience

And accurate and record keeping ( automatic market research)

Integrated marketing mix -marketing decisions complement each other and convey a consistent message about the product

OPERATION AND PROJECT MANAGEMENT

Nature of operations

Inputs transformation and outputs

added value ( depends on design, efficiency, ability to customers to buy at a time)

Flexibility and innovation

PRODUCTION

Absent  measures-of quality. Productivity is how effectively inputs have

How do you increase productivity ?

1. Working the training

2. Motivation

3. Better machinery

4. Effective management

RESOURCES

Land

Labour

intellectual capital

Human capital ( human skills)

Structural skills

Efficiency- relation between the output and input

Effectticeness - meaning objective to by productivity to meaning input to production needs

Capital intensive and labour intensive

Production methods that require a high level investment of equipment then labour

Labour - the number of employees that require to produce products and services at an organization

OPERATION PLANNING

factor with this approach

Nature of product and image

Prices

Availability of other resources

Size of the market

Market demand and trends

FACTORS TO OPERATION

Operate decisions- decisions taking by operator manger that can hav a significant impact of the success of the business

They are influenced by market factors, availability of resources and technology

Marketing factors

There is a link between operation department and marketing department

operation mangers - require information obtaining to estimated market demand when planning future levels operate mangers try to reach supply to potential customers

Operate planning involves  provide product to meet expectations for demand

IMPORTANT ELEMENTS  IF PLANNING

reducing wastage

Producing the range of products that are focuses to the demand

Employee and keep a appropriate number Of staff

Keep sufficient inventory

Availability of resources

The production department use resources to rodice good and service. This resource includes land , labour , equipment and raw materials

Number of important operations decisions

The business must decide on the best location , nature of production

Technology

The provision of services and also the manufacturing of goods . Firms can now use technology . There are two main form that are

Engineering departments also uses card to analyze

BENEFITS IF CARDS

• low production development cost

• Increased productivity

• Improves product quality

• Good visualization of the final product and its constituent parts

• Error that it more

LIMITATION CARDS

complexity of programs( if the system that not everyone not be able to use it)

There is need If expenses training

It is very expensive that is computer software

Computer programs can be affected be virus

COMPUTER AIDED MANUFACTURING

This involves the use of computer to control machine tools and related manchiery of the comptents of late products

Processes in a cam process are controlled by computers( all the processes well on a computer) that’s high degree of precision and consistent that can be achieved then a machine controlled by man

BENEFITS IF CAM

• quality products are produced

• Faster production and increased labour productivity

• Combined with card to produce a wide range of products ( more flexible production allowing more all quick change over from one product to another )

Limitation OF CAM

• High cost of hardware and employ training .. hardware failure can be time consuming to solve

• Computer can be easily affected by virus

• Small firms can not afford it

FLEXIBILITY AND INNOVATION IN PRODUCTION

A. Opea of flexibility ( this refers to the ability of the business to vary of both the level of production and the range of products following in Changes in customers demands ( the level of demand is not constant) it may increase and decrease and the business must be able to respond  quickly to changes in demand

WAYS TO ACHIEVE OPERATIONS FLEXIBILITY

BUY MORE EQUIPMENT

construction or buy new buildings

Maintain the e

Employ part time or temporarily labour force

B. Process invasion - refer to the use of new or produced or services delivering method

ELEMENTS OF PROCESSES INVASION

• Use of robots in manufacturing

• Use of bar codes and scanner

• Use of internet to track

• Use of internet to track the exact location of packages being delivered worldwide and improve the speed of delivery

Benefits

• being able to get more accurate and reliable of the information of the performance department of variable

• being able to save time that is

• Increased professionalism

• Easily to supply customers

• Production of cost the long run that is in the short run and the cost

• Cheaper production methods makes the business more competitive

NB process innovation of the automation of robotics

Automation refers to the use of electronic and use of machinery to control an production system

Robotics - refers to the use of robots and machinery that resemble a human in the operates in a production system

PRODUCTION METHODS

Production design refers to the scheduling of production with involves organizaing the activities in the  manufacturing plant or serve this industry ensure that the product service is completed at the expected time

Four basic ways or products design

Job , batch , floor , mass production

The method Production would depend on the following factors

A nature of the product: nature of the product for the explanation you are saying unique products require job group of identical products require batch and identical product require floor production

Size of the business

Small businesses use job and batch wild large firms to use floor production. This is because floor production is expensive to set up

Size and location of the market

The form Must take into cognizance the volume of output required . If the demand is high but not in larger quantities batch is used

Mass marketing requires floor production

Demand of the product

Less frequent demand requires job while larger and fairly state demand require floor production

JOB PRODUCTION

Used when a single product or small order are completed by one or groups of people are completed by one  from start to finish to meet the individual requirements (does. The products are customized in bracket produced according to the customers)

Each order is different and it may not be repeated at all

Wedding cake wedding cow building plants is the most expensive form of production vet labour and investment ( requires few machine ) requires highly more skilled labour

Advantage

Products can be tailored to meet customers needs

Suitable for customer, benefits for example the haircuts

Involvement with the product increase job satisfaction

The requirement of the customer

Resulting  guaranteed customer satisfaction

Use of skilled staff out in the production of quality products

High employ motivation

Needs a highly skill workers

I need a high skill  for competent supervisors and management specialist closely. I mean, costly to attract and to keep a business.

This is because there is no automation or use of complex machines

It is usually done manually and special materials are required to digging are to high cost of production only quality skill is required products

BATCH PRODUCTION

A method or production where items are made in groups with similar characteristics . Each item in a groups of products passes through a stage of production at the same time

It is a production of a identical to meant a customer order and each order is called a batch

It falls job and floor production and it is commonly used by Funtime

ADVANTAGES

• it giver variety to workers because it requires different workers with different skills

• The removers bored mess for work

• It allows more variety to produce this will increase customer

• Material can be bought in bulck this will give

• Unit cost is lower than jobing

• Producing more good increases production

• Production can be easily changed from one product to another

DISADVANTAGES

no product will be completed before another lead time

Increased in cost since there is need for a variety effective control in a system planning production

Warehouse face will be in needed for stock of raw materials

FLOOR PRODUCTION

Known as mass or continuous production . It is the production of large quantities product in a continuous process. The products identical and standardized. It uses a sentence of repetitive processes.

So that on the next stage, so that each item moves on the on the next stage

As soon as the process is completed as soon as a process is completed

assembly line high degree of standardization and standardization and specialization

It is more Intensive, and requires more machines and automation than people. It is often very expensive to startt Because of the need to buy expensive machines and automation

The the following products are produced using mass production as chemical packaged food product

AD

MASS PRODUCTION ENABLE THE BUSINESS TO ENJOY THE ECONOMIES OF scales ( reduction ) WHICH LEADS TO

LOWER AUTOMATION ALLOWS FOOD TO BE PRODUCED QUICKLY

Automatic production lines can operate 24 hours a day and seven days a week right time is set thanks God move on move on. Read promotion promote specialization promote specialization repetition of the same task makes the employee more cute repetition of the same test makes employee more materials can be involved Will give discounts to the business

disadvantages. If one mission breaks down the whole production line will have to be halted another one. It is very costly because machines and automation are very expensive to buy costly because machines and automation are very expensive right repetition of the task can be boring to the week. Repetition of the same task can be boring to the wake up. It is not flexible production line as it is difficult to switch to other methods use of machines.Put out of people jobs

MASS CUSTOMIZATION

production system enabling customer specific to specify what features of a product or service they want enabling customer specify what feature of products they want this process, combines the latest technology with mouth, skilled labor for use production lines to make range of product to make a range of product this allows the business to move away from the mass marketing approach allows the business to move away. OK I’m repeating the business for now use forecast or differentiated marketing, which allows for. I higher added value. The products are made using flexible, computer aid production systems to produce items which requirements it must protection cost.

ADVTANAGES

New  introduced produced as new introduction introduced

Data quality products are produced

Disadvantages

Very expensive to set up

Technology will become outdated

STOCK MANAGEMENT

Stock management occurs when the purchase department aims to minimize cost of stock by maintaining adcate levels of stock

The purchase department mast obtain the right quantity at the right time at the right quantity

From the right source at the right time

REASONS FOR HOLDING STOCK

To met production requirements

Stock of working in progress is maintained in order to countries the production and allow greater flexibility

Stock of finished goods are maintained in order to meet customer demands on time

Stocks equipment and spares are kept in order to support sales and production

Control cash tied up in stock

Another reason to control wastage

TYPES OF STOCK

What are the types

Raw materials - the basic materials which product is made the basic materials for which a product is made, and there are usually watch from outside

Working progress- unfinished project that is still being edited. I’m finished that is still being ended true or developed partially completed goods.

Finished products - finish the group we are looking at goods that are completed that have completed the manufacturing process

COST OF HOLDING HIGH LEVEL STOCK

storage cost will be increase

Increase in spoilage

Rise in administration in finance cost for example insurance

Wasted of resources in a lower period in the market he

Risk of thief

COST OF HOLDING LOW STOCK

lost sales which are know as out of sale cost

Ideally production that machines capacity

Another one in the advantage of buying can’t no be a achieved

BENEFITS OF HOLDING HIGH LEVEL STOCK Opportunity

THE FIRM. Can enjoy the benefit of bulk buying

Production flexibility since the business will have more stock at any given time

It’s all times right enough stock will be available to support production and sales yes

Benefits of holding low level stock

Storage cost are reduce

insurance cost are  minimized

People is not unnecessarily

Minimum wages in a period of reduced demand in a period of minimum wage period

The risk of theft and spoilage easily reduced

MANGING STOCK

it involves the stock control techniques

Buffer stock - the reserves of stock kept to cater for event stock or fraternities

running out of stock, the business must have reserved stock this technique is used to avoid stock out cost which are lost production and lost contribution from lost sales

Lost of customers good mood

High unit cost associated with agent purchases

Lost of bulk buying discounts

Advantage

Reorder level- order level is referred to the level to the level of stock which a new order is placed with the supplier

the quantity of this order of the reorder quantity will be influenced by EOQ ( economic order of quantity) referred to the quantity of materials ordered at cash point to minimize the total annual stocking cost or the list cost quantity of stock  to reorder taking into account delivery cost and stock holding cost

Economic orders quantity depends on interest of capital stop cost , wastage cost , insurance cost

Optimum stock levels to held - I referred to the right quantity and quality of stock to be kept at the business to promote the stocks running of production

Total stock cost = stock holding cost + out of stock cost

STOCK chart

A tool to control stock

Maximum stock - the referred to the highest amount of stock and it is limited by space and the financial cost of holding higher levels

Calculating

EOQ + buffer stock

MINIMUM STOCK- this know as buffer stock this is the minimum number of  stock that should be held to production to continue in case of delay of inventory of raw materials

REORDER LEVEL -  this the level stock at which a new order is placed with the supplier. The quantity of the new orders will be influenced but the new order quantity

LEAD TIME - is the amount of time of purchase to be received and inspection is made to use if more time is required is ordering new stock and delivery then there is JIT

JIT -

raw material are reduced to 0 and finished goods inventory are minimized production I to demand

JIT doesn’t require any buffer stocks … the components just  the time that they are needed and the group to deliver to customers and they’re completing

JIT is a Japanese approach towards production

REQUIREMENTS FOR JIT

1. Employee flexibility

2. Flexibility of machinery

3. Excellent relationship with suppliers

4. Accurate demand forecast

5. IT equipment

BENEFITS

improvement on production quality

Improved customer services

Less stock being outdated

Less stock of being able less stock reduces the risk of wastage

Higher cost profits

DISADVANTAGES

advantages of bulk buying a lost

Administration cost raising

It’s does t work when demand is unpredictable

Redundant -  a state where the employee is no longer need foe the business

NEED OF FINANCE

Business require finance for start up capital. This the capital needed to set up a business they also require finance for working  capital and working capital needed pay for raw materials, day to day running cost and offered to customers.

The formals

Current assets- current liability

The business also require finance for expansion through capital assets and turnover . Business require finance for different susturation that the business requires finance.

Research development

CAPITAL expenditure and revenue expenditure

capital expenditure- is the purchase of assets that are expected to last for more than one year

revenue expenditure- this is expending on all cost and other assets and other then fixed costs including wages, salaries and materials bought for stock

Liquidity - ability of the business to pay it short term debts

Liquidation- this when a firm szn trading and its assets is sold for cash

Business plan -a written document giving evidence about a new or existing business and that aims to convince and invest to expand finance in the business

SOURCES OF FINANCE

internal and external finance

internal -

retained earnings( profits left after production) cloud

Sales of unwanted assets ( sales you dont longer needed in the business)

Sales and listback has non current assets ( assets that can not me convert to into cask easily)

EXAMPLES CURRENT ASSEST

stock - this can be easily converted into cash

working capital- this is the money used for day to day use of money in the business

external -

shared capital- they total value raised by shareholders through the issue of shares

Introducing new partners - they will contribute

Venture capital- this is risk capital investment in the business by individual or groups of individuals that see good profit potential but do not find it easy to to gain finance from others

overdraft - when a bank agrees to a business borrowing up to an agreed limit as and when required

leasing- Obtaining the use of equipment or vehicles by paying a rental charge over a fixed period

Higher purchase- this when an assets is sold a company that agrees to pay a fixed payment

Bank loan - this is amount borrowed for a bank that do not have to be paid for at least one year

Mortgages- this is a legal agreement by which a financed means finance by taking title of the depth company

Debentures - bonds issued by company to raise depth finance offered to raised depth finance often with a

Micro finance- this is providing financial services to low income or por individuals that don’t have access to financial services such as loans and overdraft provide by banks

Crowded funding - this is use of small amounts of capital which can from a large number of individuals to finance a new business venture .. if we do this there is lower interest for new firms.. there is use of IT and initial capital  plus interest and idea exposed

government grands - this is financial awards giving but a government to a business and it’s not expected to repaid

FACITS AFFECTING CHOICE OF FINANCE

1. Amount of capital

2. Cost

3. Size of

4. Legal structures

5. Sales of structures

6. Flexibility

UINT 5

COSTS

THE NEED OF ACCURE COST DATA

1. profit casting

2. For marketing

3. Comparison ( resources usage and decision making

TYPES OF COSTS

fixed costs - do not vary with output in the short term

Variable costs - this directly buy with output

Marginal costs- costs and extra cost of producing one more unit

Direct cost - this clearly identify with a unit of production accurately allocated to cost spent

Indirect costs- can not be identified with a unity of production

BREAK - EVEN

Margin of safety  - the amount of units by which sales reach break even point

USES OF BREAK EVEN CHARTS

Marketing decisions ( pricing increases)

Operations Management

Locations decisions

ADVANTAGES OD BREAK EVEN CHART

1. They are east to construct and interpret and a comparisons and obtain size results

DISADVANTAGE

1. Not all costs are straight lines

2. Fixed cost change in the long term

3. Difficult to classify

4. It assuming all units produced are sold

ACCOUNTING  FUNDAMENTALS

income statements

• revenue ( the total value of sales )

• Cost of sales ( direct costs of goods sold in a financial year)

• Gross profit ( cost of sales revenue - cost of sales)

• Retained

• Operating Profit ( an overdraft )

• Retained earnings ( the process that a business)

• Retained profits

Statement of financial prostions

This is also know as the balance sheet

non currents - can’t be turned into cash

L

Current assets- can be turned into cash

Current liability- debt paid in one year

\text{Working Capital} = \text{Current Assets} - \text{Current Liabilities}

Net Assets = capital

Non current liability - debt paid in more than one year

Reserves and equity

FORECASTING AND MANAGING CASHFLOW

Cash vs profit

Profit is long term of survival

Cash is long and short term for growth and paying expenses

consequences of not having enough cash in hand

• Can not pay suppliers and expenses even through its operating profitability

• It becomes insolvent ( when a business can not meant it short term debts and

• can be forced to liquidate ( firms  trading and assets are sold to pay suppliers and other creditors )

USES OF CASHFLOW FORECAST

1. Repairing of areas for cash flows

2. Planning g to reduce negative cash flow

3. Required by invests and banks

LIMITATIONS OF CASH FLOW FORECAST

• can contain mistakes

• Unexpected cost increases

• Major in accuracies

• It can be based on wrong assumptions

CAUSES OF CASHFLOW PROBLEM

• lack of planning

• Poor credit control

• Allowing long term credit periods

• Over trading ( expanding the business rapidly with out obataining )

• Unexpected events

IMPROVING CASH FLOW

• increase cash in flow

• Or reduce cash out flow

• By managing trading resiable( not expanding credit)

• Debt factoring ( this is factoring debt can’t not recover of debt value )

• It also require reference for customer to credit

OTHER METHODS

offer cash discount for prompt payment

Overdrafts

( increases short loan - interest and due dates

Reduce if cash out flows ( delay, payment suppliers)

Delay spending on capital expenditure

Reduce by cutting indirect cost ( can affect demand )

Managing creditors ( increasing range of good bought on credit

you can expand credit period (This is difficult for small businesses because they man not get based quality good or services)