Q&A - Why might the objectives of stakeholders be in conflict?
Many business objectives complement each other and are acceptable to a broad range of stakeholders. For example, an objective for a business start-up of achieving survival would be supported by nearly all the stakeholders. It is in no-one’s interest for a business to fail! However, once a business becomes better established and larger, then potential conflicts begin to arise. Let’s look at two examples in a little detail:
read more...»Q&A - How can a business handle a loss?
A loss arises when total costs are more than total revenues in a period.
read more...»Q&A - How is profit used by a business?
Profit arises when total sales exceed total cost for a period. Once a profit has been made, the owners of the business have a choice:
read more...»Q&A - What is share capital
Share capital is the money invested in a company by the shareholders. Share capital is a long-term source of finance.
read more...»Q&A - Compare the advantages of trading as a sole trader versus a private limited company
The main differences between private limited companies and sole traders can be summarised as follows:
read more...»Q&A - Describe the basics of setting up a business in the UK
A checklist of things to do when starting a business can run to many pages. There are many practical issues to address in terms of setting up the administration of the business, obtaining the resources to trade and then, even harder, finding and keeping the first customers! Here is a summary of the main actions that a start-up needs to address:
read more...»Q&A - What is credit and why do businesses need it?
Credit is the lifeblood of any business - it is very difficult for a business to survive, and certainly grow without it. But what is credit?
read more...»Q&A - What are the main interests of business stakeholders?
The main interests of each main stakeholder group can be summarised as follows:
read more...»Q&A - What are stakeholders?
A stakeholder is anyone who has a vested interest in the activities and decision making of a business.
read more...»Q&A - Explain incorporation and the protection of limited liability
Incorporation is the creation of a company which then operates as a business. In the vast majority of cases, the type of company created is a “private limited company”.
read more...»Q&A - What is unlimited liability?
There is a big downside to operating as a sole trader. It occurs because, in the eyes of the law, there is no difference between the person running the business and the business itself. When it comes to chasing money owed by a business, a sole trader has to settle up.
read more...»Q&A - What is a sole trader?
Most businesses in the UK are small businesses, owned and operated by one person. In most cases, these businesses operate as a “sole trader”.
read more...»Q&A - What is a cash flow forecast?
The cash flow forecast predicts the net cash flows of the business over a future period.
read more...»Q&A - What are the main types of cash flow?
The main types of cash flow can be summarised as follows:
read more...»Q&A - What is cash flow?
Cash flow describes the movements of cash into and out of a business
read more...»Q&A - What is profit and why is it important?
Profit is a very important concept for any business – particularly a start-up. Profit is the financial return or reward that firms or entrepreneurs aim to achieve to reflect the risk that they take.
read more...»Q&A - What is meant by total costs and how are they calculated?
The total costs of a business can be calculated by simply adding together the variable costs at different levels of output to fixed costs.
read more...»Q&A - What are variable costs?
Costs which change when output changes are called “variable costs”
read more...»Q&A - What are fixed costs?
Fixed costs do not change as output varies. In other words, they are fixed even if output moves up or down from period to period.
read more...»Q&A - What is meant by repeat business and why is it important?
Repeat business is all about encouraging customers who buy for the first time to buy again and again!
read more...»Q&A - What is meant by the production process?
Businesses provide goods and services. To be able to do this, they need to be able to turn inputs into outputs. This is known as the production process.
read more...»Q&A - What are goods and services?
A business can be defined as an organisation that provides goods and services to others who want or need them. So, what are goods and services?
read more...»Q&A - What is demand?
Demand can be defined as:
The amount (quantity) that customers are prepared to buy at a given price
read more...»Q&A - What is revenue?
A business exists to provide products (goods and services). Those products are sold to customers. When a customer buys a product, that transaction becomes a sale for the business. That’s what businesses do – they make sales. The value of sales made is the revenue of the business.
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