iGCSE Business Edexcel

This subject is broken down into 25 topics in 5 modules:

  1. Business Activity and Influences on Business 8 topics
  2. People in Business 5 topics
  3. Business Finance 5 topics
  4. Marketing 3 topics
  5. Business Operations 4 topics
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  • 5
    modules
  • 25
    topics
  • 9,014
    words of revision content
  • 1+
    hours of audio lessons

This page was last modified on 28 September 2024.

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Business

Business Activity and Influences on Business

Business Objectives

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Business Objectives

Section 1: Understanding Business Objectives

  • Businesses are established with a set of specific goals known as business objectives. These define what a business wants to achieve.

  • Business objectives act as a guideline for the daily operations and decision-making processes within a business.

  • Often, objectives are established on the basis of the SMART principle, that is the objectives should be Specific, Measurable, Achievable, Relevant, and Time-related.

Section 2: Common Types of Business Objectives

  • Profit maximisation: Many businesses aim to increase their profits to the maximum level possible. Profit is the difference between revenues and costs.

  • Survival: New businesses and those in extremely competitive markets might focus on survival as their key objective.

  • Growth: Businesses often aim to expand their operations, which could mean increasing sales, number of employees, market share, etc.

  • Increasing market share: This objective relates to gaining dominance over competitors within a specific market.

  • Providing quality products or services: Maintaining high quality can improve reputation and boost sales.

Section 3: Importance of Business Objectives

  • Business objectives aid in planning and decision-making, helping businesses navigate towards their goals.

  • They assist in directing employees’ efforts and focus towards important areas of the operation.

  • They motivate employees by giving them something tangible to strive for.

  • They form the foundation for monitoring progress and assessing performance by providing clear and quantifiable goals.

Section 4: Modification of Business Objectives

  • Adapting objectives is essential in response to changing internal and external factors.

  • Internal changes could include new management, changes in size, technological advancements etc.

  • External changes could be changes in market trends, laws, competitor activity, economic conditions, etc.

  • Remaining flexible and able to adapt objectives is key to remaining successful in the ever-evolving business environment.

Course material for Business, module Business Activity and Influences on Business, topic Business Objectives

Business

Business Finance

Sources of Finance

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Sources of Finance

Sources of Finance

Internal Sources of Finance

  • Retained profit: Accumulated earnings over time used for reinvestment instead of paying them out as dividends.
  • Sale of assets: These can include machinery or property that the business no longer needs; the revenue generated can be directed back into the business.
  • Owner's savings: This suggests the owner using their personal savings to finance the business.

External Sources of Finance

  • Trade credit: This involves buying goods now with a promise to pay later.
  • Bank overdrafts: An agreement that allows a business to spend more than the amount of capital currently in its account.
  • Loans: Sum of money borrowed from banks or financial bodies with an agreement to pay it back along with the interest over a specified period.
  • Share capital: This includes issuing shares to public (in case of public limited companies) or to individual investors; money received from these are used for the business functions.
  • Leasing: Signed agreement where a business pays a fee to use an asset owned by the lender for a specified period.
  • Grants: Usually provided by government organisations for specific purposes like starting a new business project or creating jobs locally.
  • Venture capital: Provided by individuals or firms who invest in businesses in exchange for an equity stake.

Short-term vs Long-term Finance

  • Short-term finance: These are for immediate requirements or for periods typically less than a year. Trade credits and bank overdrafts fall in this category.
  • Long-term finance: These sources are usually geared towards capital investments and are expected to pay back over several years. Loans, share capital, and venture capital fall into this category.

Remember that the choice of finance source depends on a variety of factors such as the nature of the expenditure, cost of finance, amount needed, and the risk appetite of the business.

Course material for Business, module Business Finance, topic Sources of Finance

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